* By Sarah Cornelisse
When scrolling through while traveling, perhaps visiting family or attending a conference away from home, have you noticed ads for businesses or events in the city or region that you are visiting? This is how geofencing works.
Imagine entering a building, and at every entrance, someone is there handing out fliers advertising the businesses with offices in the building or specials offered by one of those businesses. Now, rather than individuals passing out fliers at each entryway, notifications appear on your phone with the same information.
This is how geofencing works. Using locational information such as buildings, city blocks, or distance from a location such as your farm market, you can create a virtual “fence” to target people as they enter the fenced-in area.
Geofencing uses GPS, wi-fi, cellular data, Bluetooth, or radio-frequency identification (RFID) technology. The accuracy of geofencing is dependent on several factors. These include the technology used, size of the geofence, type of device and device quality, update frequency, signal interference, user location, and geographic features (GeoPlugin, n.d. and Redshark, n.d.).
Unlike geofencing, geotargeting does not rely upon the movements of people and their devices. When you geotarget an audience on a social media platform, you select locations (states, cities, zip codes) and location radius for your target audience. How people move about within that targeted location does not affect whether they receive your ads.
To illustrate with an example, if you have a space at the local farmers market and you want to offer a special to market visitors, geofencing would be the more accurate tool since only people who enter the area you set as the market space would receive the ad in their social media feed.
If you were to geotarget your ad using either the city or zip code the market is in, people on the other side of town with no intention of attending the market would also see the ad in their feed. Geofencing allows for more precise targeting. For direct marketers, geofencing marketing offers several benefits.
These include:
» Well-timed content delivery. Geofencing lets you deliver content to customers or visitors at the right time. People value and want to know about special offers, events, and activities before or during their visit, not after.
» Increase visitor/customer numbers. The ability to target people when they are near your location can result in increased foot traffic. With individuals receiving advertising and offer posts or notifications once they are within the geofence, they are more likely to already be in the mood to visit or purchase.
» Increase sales and revenue. Because you can send notifications and ads to prospective customers either already at your location or with a high likelihood of visiting, you can also send special offers, encouraging them to purchase.
» Market directly to customers of competing or complementary businesses. Not only does geofencing allow you to target people in proximity to your farm or location, but you can also target the customers of competitors or complementary businesses.
» Optimize advertising campaigns. Geofenced marketing optimizes your advertising through hyper-targeted and personalized ads to customers and visitors who are most likely to visit and purchase. Marketing already requires you to know your target audience – through values, behaviors, and demographics – but before geofencing, you could not deliver ads based on an audience member’s current physical location or interests.
You can also enhance the personalization of geofenced ads with focused messages based on immediate customer needs or interests. With geofencing, you can better utilize your marketing dollars through targeted ad campaigns, potentially improving sales and visitor conversion rates.
While geofencing marketing has several benefits, there are also challenges to be aware of. Namely, geofencing relies on people having location services active on their smartphones or other mobile device. As people become savvier about how advertisers use their location data, they may turn off that feature. Additionally, smartphone users may have privacy concerns about being tracked.
As described previously, geofencing is different from geotargeting. Therefore, you need to approach geofencing marketing slightly differently than marketing efforts to reach broad audiences or with a brand exposure goal. Tips for successful geofencing marketing include:
» Select the size and number of the geofences appropriate for your goal.
» Create high-quality personalized content.
» Have a clear and compelling call to action (CTA).
» Analyze the results of geofencing advertising campaigns.
Numerous platforms and tools provide geofencing capabilities. Google, Apple, Facebook, and Snapchat are some of the more recognizable names. On Facebook, geofencing is limited to the radius around a dropped pin; if you want to fence a specific building or city block, you will need to work through a slightly more complex process of excluding areas within the target pin radius but outside your target fence area. If you work with a marketing consultant, they may be able to assist with selecting a geofencing tool and setting it up.
The cost to adopt geofencing is variable, as many online marketing tools are. There is no cost for geofencing beyond what is incurred for an advertising campaign on Facebook. Third-party geofencing tools offer subscription plans, from free trials to complex business plans that may include marketing consultation. As technology evolves, new tools will be developed that can be implemented for marketing. Geofencing is just one of those tools. When adopting any new tool, take the time to clearly outline your marketing goals to ensure that the tool will help you achieve those goals.
Disclaimer: Where individual or trade names appear, no discrimination is intended, and no endorsement by Penn State Extension is implied. References and sources consulted by the author on the elaboration of this article are available under previous request to our editorial staff.
* Sarah Cornelisse is a Senior Extension Associate of agricultural entrepreneurship and business management at Penn State University in the Department of Agricultural Economics, Sociology and Education. Sarah has expertise in direct marketing, value-added dairy entrepreneurship and marketing, the use of digital and social media for agricultural farm and food business marketing, and business and marketing planning and decision making. Originally from New York State, she has a B.A in Mathematics from the State University of New York at Geneseo, and M.S. degrees in Agricultural Economics and Animal Science, both from Penn State University. Correspondence email: sar243@psu.edu
