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Geofencing Marketing: What Is It, How It Works, and Why Your Business Needs It.

Discover how geofence marketing can help you effectively reach your target audience with personalized content, and bettering the user experience.

6 min read
- Published on
September 20, 2023

QUICK SUMMARY

Geofencing is a location-based service using technologies like GPS and radio frequency identifiers to help businesses draw a perimeter around a location of interest, priming it for targeted marketing. Geofences allow you to build marketing campaigns that are time-sensitive, cost-effective, and personalized. It will also provide customer insights, and help boost brand awareness. Companies like Burger King and Volvo have demonstrated the revolutionary ways geofencing marketing can impact marketing campaigns. But, that's because they had right data: clean, accurate, and reliable.

TABLE OF CONTENTS

Geofencing Marketing: What Is It, How It Works, and Why Your Business Needs It.

What if you could unlock a marketing strategy that granted you the superpower to target your ideal customers right where they are, even down to the very street they’re walking? Fascinating, isn’t it?

Welcome to geofencing marketing!

As we grapple with soaring advertising costs and fragmented consumer groups that move faster than trends, geofencing has emerged as marketing’s knight in shining armor.

So, what is geofencing, and why is it something no innovative business can afford to overlook? 

Let’s start with the basics.

Imagine walking down the street, your phone buzzes, and you see a discount from the café you’re about to pass. It feels like a coincidence, doesn’t it? It’s not. You just witnessed targeted marketing via smart geofencing.

Simply put:

Geofencing is a location-based service using technologies like GPS and radio frequency identifiers to help businesses draw a perimeter around a location of interest, priming it for targeted marketing.

When a device enters or exits this area, it triggers real-time marketing actions- sending tailored notifications or delivering location-specific ads.
It’s a tool indispensable for locating & targeting your brand’s most likely customers.

 The bottom line:

  • No more missed opportunities or aggressive spending.
  • Identify and target areas of high penetration, high potential, and untapped by competition.
  • Send the right information to the right person, at the right place and time, communicating personalized and relevant messages that make every campaign accurate, and cost-effective.

Today’s consumers don’t just want products, they want experiences, and those experiences are deeply intertwined with where they are.
In the evolving labyrinth of modern marketing & AdTech, geofencing is the equivalent of having a personalized guide, leading your most ideal customers right to your door.

Intrigued? I feel you. Let’s dive in!

How are geofences created & how does geofencing marketing work?

There are three main techniques.

Centroid Radius: 

Think of this as the classic magic circle. Select a point on the map (the centroid) and draw a circular radius around it.

Based on your requirements, this radius may vary from a few meters to several kilometers. Cross into this circle, and your device lights up with messages.

Ideal for charming customers when they wander into a particular neighborhood or mall.

Isochrone

This approach considers travel time or distance from a location, rather than just a fixed radius. Perfect for that restaurant owner who wants to entice patrons within a 10-minute bike ride, rather than those a 2-hour ride away. 

Building Footprints

Now, this is precision magic! It involves creating a geofence based on the physical outline or footprint of a building, allowing precise, micro-level targeting. Retailers can leverage this to engage customers as soon as they enter their store or a specific section within a mall, delivering highly contextual and immediate discounts or offers, as if reading their minds!

How is geofencing revolutionizing the marketing landscape?

Unlock the possibilities!

1. It’s time-sensitive

Geofencing is redefining the rhythm of marketing. It puts businesses in the driver’s seat, offering control over when and where their message is delivered. No more waiting for the customer to remember an ad; with geofencing, you’re on their screen just when they’re ready to buy, boosting the odds of immediate engagement, and streamlining the path to purchase.

2. It’s targeted:

Go local! A study by Billups reveals that 71% of consumers have rediscovered the appeal of casual strolls in their neighborhoods, showing a growing enthusiasm for spontaneous visits to outdoor pop-up shops.

This unique convergence of consumer behavior and localized business opportunities makes local marketing campaigns even more important. And this is where geofencing aces with its geographic specificity.

3. It’s cost-effective:

Unlike costly mass advertising, geofencing strategically deploys campaigns in pinpointed locations. You pay only for strategic deployment area, placing your ads in places buzzing with potential customers, maximizing your ROI.

In essence, geofencing empowers marketers to invest wisely, targeting people more likely to convert into customers rather than casting a wide, less effective net.

Your resources go further, your messages hit home, and your wallet breathes a sigh of relief. Brilliant, isn’t it?

4. It’s personalized:

Step into the world of geofencing marketing and be the personal shopper who knows their visitors’ tastes to a tee, expertly morphing itself to match each consumer’s unique wants and needs.

Picture this: A dog enthusiast walks into their favorite pet store. Suddenly, they’re seeing ads for the latest chew toys and gourmet dog treats. It’s like the ads read their mind (or, in this case, their location and preferences)! With geofencing, one-size-fits-all advertising is tossed out the window. Instead, each ad is a custom-made outfit, tailored to perfection for every customer.

It’s a strategy that brings ‘right place, right time’ to a whole new level, by adding ‘right person’ into the mix.

5. It provides consumer insights:

With geofencing marketing, go beyond just delivering ads, and take a deep dive into a treasure trove of real-time consumer behavior data. This isn’t just about who’s walking by but unearthing valuable patterns: the billboards catching their eyes, the roads they tread, even your business rivals that share their attention.

It’s about gaining insights into traffic patterns, dwell times, billboard hotspots, and message resonance. This goldmine of data helps refine your strategy, optimize user experience, and supercharge engagement.

In essence, geofencing not only helps you reach consumers; it reveals their world to you, fueling smarter, more impactful marketing decisions.

 6. It boosts brand awareness:

Consider geofencing marketing as your brand’s personal ambassador, guiding potential customers to your doorstep. It introduces your brand to consumers, creating a memorable presence.

Imagine receiving a timely ad on your phone as you pass Starbucks. It’s a nudge saying, “Hey, we’re here, ready to serve your favorite latte!” The immediate connection between the physical location and the digital ad etches the brand deeper into your memory. So even if you don’t stop by today, Starbucks has secured a spot in your awareness. It’s this powerful intersection of timely ads and physical proximity that makes geofencing a secret recipe for raising brand awareness.

Now that we know how geofencing works and how it could supercharge your marketing game, let’s get some inspiration to get us started.

Gear up!

1. Burger King: A Game-Changer in Rivalry

Remember when Burger King had everyone flocking to McDonald’s? Sounds odd, right?

Well, in an audacious twist of geo-conquesting, Burger King geofenced all McDonald’s locations, triggering a promo through their app that offered their Whopper for just 1 cent.

The catch? Customers had to be at a McDonald’s to unlock the offer. Result? An epic influx of Burger King’s app downloads, a swarm of customers poached from their arch-nemesis, and a whole lot of buzz.

2. Sephora: Baiting Shoppers with the Perfect Lure

“Free stuff!” The two words guaranteed to grab anyone’s attention. Sephora leveraged geofencing to lure app users within a specific radius into their stores with the promise of free goodies. Not just driving footfall, but enticing customers to shop more. The strategy? A simple, concise message highlighting the benefits of a store visit: convenience and freebies. In short, knowing your customer’s desires and nudging them at the right place and time can work wonders.

3. Uber: Be the Solution, Instantly

When curbside pick-ups were banned at Los Angeles International Airport, Uber used geofencing to swoop in and save the day. As soon as customers deplaned, their app pinged with notifications about nearby Uber cars. Customers had to walk to a designated area for their ride— a hassle-free solution right when they needed it. The takeaway? Strategic geofencing can not just increase sales, but also be an instant answer to customers’ needs.

4. Volvo: Precision Targeting for Maximum Returns

No geofencing marvels list would be complete without mentioning Volvo’s dealership in New York. By crafting geofences around competitor locations and areas with a high density of potential car buyers, they drove 500 fresh prospects to their website and lured 132 visitors to their showroom in just a month. Banner ads were their weapon, targeting shoppers seeking luxury vehicles. Tracking those who visited their dealership was the cherry on top, demonstrating how geofencing can supercharge conversions and awareness while pinpointing the exact customer location.

When we study these unique implementations of geofencing, one thing becomes crystal clear—geofencing is more than a tool; it’s a game-changer.

With clever use, it can not only upend the competition but also create personalized, instant solutions for customers, revolutionizing the advertising landscape.

Whether you’re a restaurant, a retail giant, a service provider, or a luxury car dealership, geofencing can be your winning secret weapon in the marketing arsenal.

There’s a “catch,” though.

Focus on the words, “With clever use…”. It’s crucial to bear in mind that a geofence is only as good as the data that defines it. Yes, geofencing marketing is revolutionary, but given you have the right data: clean, accurate, and reliable.

That’s where Echo Analytics steps in.

Raw, unprocessed data requires a lot of work from data science teams to be usable. At Echo, we do the heavy lifting, so you don’t have to.

We aggregate terabytes of up-to-date data into light & powerful data files, so you have meticulously clean, verified, and updated location intelligence data on any area of your choice, ready to champion your geotargeted marketing and advertising efforts.

Why Echo?

  • Access ready-to-use geospatial data, prepped for insights. 
  • Effortlessly integrate Echo datasets into your existing ones. 
  • Enjoy a hassle-free switch from a different provider. 
  • Expand Your Reach. 
  • Opt for Quality.
  • Skip to Insights.
  • Data is Non-PII and GDPR-compliant.

Reach out today to request a free data sample and discover the power of marketing precision.

Author
Shibanti Banerjee
Content Manager
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