What is Geofencing?
First, let’s define what geofencing is. Geofencing is placing a digital parameter around a physical location and generating an audience of people attending that location.
It allows advertisers to show ads to a very targeted audience. Ads can range from targeted display ads you see on websites to television commercials.
It takes advantage of the very simple premise of where people go is the strongest indicator of their buying intent. If someone is at an auto dealership, they are probably in the market for a new car.
Geofencing Target Zones
Target zones are the places being geofenced. Examples include:
- Trade Shows
- Competitor Locations
- Residential Households
- Business Addresses
- Sporting Events
- Office Buildings
Geofencing Conversion Zones
Conversion zones are the advertiser’s place of business. Geofencing can track when someone receiving ads physically visits an advertiser’s place of business. This allows for a precise ROI on marketing spending.
How are Geofencing Ads Delivered?
Most ads are delivered programmatically. This means the ads can be delivered to almost any website on the internet or placed on any channel or show with OTT or connected television. It’s important to note, that programmatic delivery of ads targets the user, not a specific website or platform
Programmatic Ad Delivery
The way this works is based on algorithms bidding on available advertising inventory. When someone is picked up from a geofenced location, then surfs the internet, they will start seeing ads showing up on their feed.
When the person in an active audience requests a website, there is a 100-millisecond delay from when they request it to when the website appears on their screen. In the 100-millisecond delay, algorithms bid on the available advertising inventory on the site.
The best uses of geofencing for revenue production are brick and mortar businesses. As stated earlier, the places people go are the strongest indicator of their buying intent. If someone goes to a restaurant, they dine out locally. If someone is at a car lot, they are probably looking to buy a car. Examples of businesses that respond well to geo-fencing include:
- Car Dealerships
- Pet Supplies
- Furniture Shops
- Jewelry Stores
- Hair Salons
- Retail Stores
- Gyms/Yoga Studios/Fitness Centers
Any business that does a direct mailer should use an addressable geofencing campaign on top of it. Case studies have shown increased lift rates from 25% to 40%.
Political campaigns have recently started using geofence technology. With data, local audiences can be curated with political preferences.
Geofencing trade shows have worked very well. Businesses have a very targeted audience and can serve ads to them up to 30 days after the trade show is over. Additionally, geofencing is a very cost-effective channel to engage the targeted audience.
Geofencing is great for generating brand awareness and top-of-the-funnel marketing. It starts the process of a targeted audience becoming familiar with an advertiser’s brand.
Objectives that are not Good for Geofencing:
If you are doing lead generation, geo-fencing needs to be a component in a multi-channel approach. From my experience, geofencing will not work as a stand-alone for lead generation. But if it is included with other marketing campaigns like direct mail, it will be powerful.
Once again, geofencing is great for brand awareness and driving traffic, but other marketing channels need to be used for conversion. Remember 98% of traffic does not convert on the first visit to a website.