What is Geofencing? And Who Can Benefit from this Marketing Strategy?

As technology advances and evolves, marketing strategies adapt to fit the times. With 85% of the U.S. population having a smartphone in 2021, digital marketing campaigns are becoming increasingly important to hit one's target audience, and as such new forms of advertising are becoming progressively more important. New forms of marketing to draw in potential customers are the way of the future for any business, and in that sense geofencing technology is paving the way forward.

What is Geofencing?

Not to be confused with geo-targeting, another form of location-based marketing which targets a particular zip code or area, geofencing uses both GPS and IP addresses technology to track both prospective customers and existing customers within a certain area that the business creates.

When using geofencing marketing, one will create a virtual boundary around any location that one would want, whether that is your own business, a competitor, or separate area completely, that all depends on the geofencing strategy. These virtual boundaries are set, and then whenever anyone with location services turned on, or with your app downloaded, set's foot in that area, they can be sent either push notifications, promotional offers, or even just used to display ads on their mobile device. Not to be confused with beacon technology, which requires you to place beacons in physical locations, geofencing utilizes a digital boundary through tracking technology.

How is Geofencing Better than Other Forms of Online Marketing?

There is a wide range of online marketing strategies that you can use for your business, so why should you invest in geofencing?

Personalization and User Experience

Geofencing is powerful tool to use for personalizing each potential and existing customer experience. Different forms of advertising campaigns can be pushed out using geofencing, all targeting a different array of customers. Users who have downloaded your app can receive special offers in a specific location. New customers may receive information about your store when they enter a specific block of the city or town they are in. The opportunities are endless for your geofencing campaign, only limited by one's own creativity.

Reliability With Location Services

Due to the fact that geofencing is based on location services and people who have it enabled, the odds of geofencing notifications actually being seen by customers is much higher than relying on billboards or physical advertisements for a business. Using marketing messages based on location in regards to your stores, competitor's locations and other variables, geofencing is one of the best forms of mobile marketing to drive up foot traffic to your business.

Great Return on Investment

According to a survey from February 2021, 50% of respondents stated that they spent 5 to 6 hours on their phone, and another 22% stated that they spent 3 to 4 hours. People are spending a lot of time on their phones already, mobile marketing is a premier marketing strategy of the future. As with reliability, there is no guarantee that people will see physical advertisements, but a geofencing notification will be seen by far more people. Tracking marketing data and information gathered from your geofencing, one can get a fantastic ROI.

How is Geofencing Useful for Your Business?

Geofencing is an incredibly cost-effective marketing strategy for any business looking to draw in potential customers, promote audience engagement, or keep current customer retention high. Geofencing is an excellent way to promote and create new marketing strategies for mobile users.

Examples of Geofencing

Is Geofencing Effective for a Small Business?

The marketing and advertising budget for many small businesses is not very large, yet in order for a business to grow, it requires some form of marketing in order to reach potential customers. While using a marketing or advertising agency for geofencing is an option, small businesses can opt to create their own marketing channels for geofencing, allowing smaller businesses to compete at an incredibly affordable price.

Geofencing technology is fairly simple to set up yourself, and there are quite a few guides, such as the one from Zipline, to help you set it up yourself if you would like to do self-service. While it may be easy to set up, the cost of geofence marketing is not incredibly high, especially as a small business. Thumbvista estimates geofence cost in terms of costs-per-impression, with their pricing being about $4-$14 CPI. The larger the scale of your marketing, the more expensive it will be for a geofencing or marketing company to advertise for you. Although it is an additional marketing cost, geofencing is a great way to improve click-through rate on your ads!

Geofencing Platforms for Small Businesses

Reachlocal

From everything to SEO optimization to Geofencing Marketing Campaigns, Reachlocal is a fairly affordable marketing service for both small and large businesses alike.

Simpli.fi

A tool for marketing, accounting, media management and more, Simpli.fi gives you the tools to to implement your digital advertising strategy and increase your online presence.

Phunware

Another online marketing tool that aims to engage customers and promote customer engagement with your business.

Geofencing, Marketing of the Future?

Geofencing is just one digital marketing strategy in an increasingly digital age, so the question is: is it worth it as a small business?

According to USA Today, the average person is exposed to anywhere between 3,000 to 5,000 ads every single day, so what makes geofencing ads stand out from all the others? Not only are they extremely cost effective for every type of business, but they can be personalized for each and every user, are useful to drive customers away from competitors and towards you, and only interact with customers within a reasonable distance of your services.

Geofencing an excellent way to prioritize marketing towards your customers, but is a tool that any business owner should be aware of!