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Geofencing Marketing: What Is It and How Can You Get Started?

Geofencing marketing is a type of location-based marketing strategy that enables companies to advertise to potential customers within a specific geographic radius or area.

This strategy uses a combination of technology, including GPS and radio frequency identifiers, to construct a virtual boundary around your company’s location to promote your products or services to individuals in that area.

You can use geofencing to market to your target audience while they’re shopping with your competitor, browsing your offline or online store, or even as they’re preparing to use your service.

Want to learn more about geofencing advertising? Just keep reading! Here’s everything we’ll cover:

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What is geofencing marketing?

Geofencing marketing is a location-based marketing strategy that allows you to advertise your products or services to potential customers in your company’s geographic location.

How does geofencing marketing work?

So now that you know the answer to the question, “what is geofencing marketing,” you might wonder how it works in practice.

A geofencing advertising strategy works by setting up virtual boundaries around a specific location, like the location of your business. Then, this boundary will track whenever someone with a mobile device enters it.

As soon as someone enters the virtual boundary around your business, your geofencing advertising campaign will send a notification or mobile ad to that person’s phone that advertises your local store, service, or product.

Geofencing is a location-based technology that relies on several technologies, including Wi-Fi, GPS, radio-frequency identification (RFID), and Bluetooth.

3 significant geofencing marketing benefits

There are several benefits of geofencing marketing that your business can enjoy. Let’s take a look at three key geofencing advertising benefits below:

1. Boost local foot traffic and sales

Geofencing can help you improve your local search engine optimization (SEO) strategy by giving your company more opportunities to show up in local searches when your audience is looking for your products or services in their area.

The result? You can help more local customers discover your business, boosting your foot traffic and sales in the process.

2. Drive better marketing results with data-driven campaigns

A core part of geofencing marketing is analytics. It runs on data, giving your marketing team or provider actionable information for your next campaign. Geofencing also provides your team with that data in real-time.

Some factors you can measure include:

  • Ad impressions or views
  • Conversion zone visits

Another benefit of geofencing marketing is that you can modify your campaigns on the go. If you notice users aren’t responding to your promotions, for instance, you can investigate what’s not working in your campaign. Maybe you’re targeting the wrong area or timeframe, for example.

3. Personalize audience experiences

Perhaps one of the best geofencing marketing benefits is that it allows you to use data to personalize experiences for your audience.

Your geofencing advertising campaign will give you detailed insight into the local population’s demographics and which offers generate interest in your local business. You can leverage this data to personalize your messaging to resonate with your target audience.

For example, if you notice one of your products is more popular among a certain age group, you can alter your messaging and targeting accordingly to generate more sales.

How to implement geofencing into your marketing strategy

Wondering how to implement geofencing into your marketing strategy? We’ve got you covered! All you need to get started with geofencing is an app and GPS coordinates.

Then, you can follow these simple steps for incorporating geofencing into your marketing strategy:

  1. Research your target audience
  2. Keep your geofencing boundary small
  3. Make your call to action (CTA) actionable and clear
  4. Use all your targeting techniques

1. Research your target audience

Your target audience is essential to geofencing marketing.

If you understand who your audience is, as well as what they want, you can create a target area that’ll drive results. Plus, you can develop ads that will engage shoppers and encourage them to purchase. If you’re unsure of who makes up your target audience — or are revamping your target audience — look at the data you already have available.

If you’re active on social media, for example, interact with your customers and see what they’re saying about your business, services, or products.

2. Keep your geofencing boundary small

In most cases, you’ll want to keep your geofencing area to a four to five-minute radius around your local business. Making your boundary too large could result in you promoting your brand to uninterested people.

It’s also a good idea to consider whether most people in your city walk or drive. If they tend to walk more, you’ll want to keep your boundary to a four to five-minute walking radius. And if they drive, a four to five minutes driving distance will do.

3. Make your call to action (CTA) actionable and clear

Which is more actionable — “Buy an entrée and get one free, today only!” or “Come in for our dinner special!” Sure, you’re inviting users with each, but you’re much more specific and to the point in the first call-to-action (CTA).

It’s also worth noting that you should develop ads that aren’t spammy or self-serving. If you’re promoting a new product, for example, invite users to try it versus telling them to buy it. With this approach, you’re guiding them through the buying funnel in a natural way.

4. Use all your targeting techniques

In geofencing marketing, you can use several outside marketing techniques, including:

  • Context targeting: A targeting option that shows an ad that’s relevant to the content on the page, such as an ad beside a news article about local restaurants.
  • Content targeting: A targeting tool that targets keywords used in searches, as well as the intention of those keywords. If you have content for the keyword, “restaurants with private dining areas,” you’d ensure the content discusses your private dining area and options.
  • Retargeting: targeting strategy for marketing that shows an ad to users that have viewed a product on your website, such as after visiting your storefront.
  • Dayparting: A targeting technique that targets users at certain times of day, better known as ad scheduling. If you have a target audience that’s active on the weekdays, for instance, you may only run your promotions Monday through Friday.

Like many digital marketing tools, geofencing marketing will support and complement your digital marketing strategy. It’ll inform your team, for example, about when your target audience is active, as well as how to market to them after a store visit.

5 geofencing marketing examples

Ready for a few geofencing marketing examples to inspire your campaign? Here are five to start:

  1. Taco Bell
  2. History Channel
  3. Burger King
  4. BMW
  5. American Eagle

1. How Taco Bell amplified annual sales

Taco Bell, a fast-food giant for Mexican dishes, leveraged its mobile app for geofencing advertising. The marketing team at Taco Bell wanted to target users under the age of 30 that had enabled push notifications for the Taco Bell app. The goal? For users to say, “Yo quiero Taco Bell.”

By creating well-defined geofences in areas near Taco Bell locations, the team improved the company’s annual profits by six percent. For reference, the company recently posted $10 billion in annual sales — that means the campaign generated close to $600 million in additional profits.

2. How the History Channel raised brand awareness

The History Channel, a television network for all-things history, improved awareness for its brand by partnering with Foursquare, a mobile app for finding local restaurants, entertainment, museums, and more.

If users opted to check-in to a historical location, such as the White House, they’d see additional information on the location.

For the White House, for example, they may see an overview of its construction dates, as well as notable historical events. While the companies didn’t release numbers on the campaign, industry insiders view it as a success.

3. How Burger King detoured customers away from competitors

Burger King’s Whopper Detour campaign is an excellent example of geofencing marketing. More specifically, it’s an example of geoconquesting — a geofence marketing strategy designed to draw customers away from competitors.

Here’s how the campaign worked. Burger King set up geofences around McDonald’s locations. When users entered those geofences, they received a notification offering a Whopper burger for one cent if they bought it through Burger King’s recently redesigned app. The app then provided directions from the McDonald’s to the nearest Burger King where the customer could pick up their order.

The stunt drove more than 1 million app downloads in just a few days and earned Burger King quite a bit of attention.

4. How BMW made geofencing a service

Many companies focus on geofencing as a marketing tool — and BMW did too — but as a unique selling point. How? With their BMW Trackstar and BMW Trackstar Advance services, which track the position of your vehicle to ensure its security.

If your vehicle moves without your car keys, BMW notifies you. For BMW, the decision to bring geofencing into its marketing and business plan worked. The service not only offers an advantage to consumers but also offers a continued source of revenue for the company.

BMW Trackstar and BMW Trackstar Advance have an annual subscription fee.

5. How American Eagle increased in-store purchases

American Eagle, an apparel company, also found success with geofencing marketing. It focused on targeting mall locations, which often house American Eagle stores. The company also wanted to persuade its competitors’ customers to choose American Eagle.

By creating ads with special offers, as well as incentives for trying on clothes, the company accomplished its goals. In fact, its in-store sales increased three times over, generating new revenue for the business.

See more geofencing examples here

Want to learn how to start a geofencing marketing strategy?

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