How does geofencing advertising work?


how does geofencing advertising work

If you’ve used any type of digital device, you’ve probably been served a digital ad. You may have noticed that those ads can be very specific. Take this example: you’re passing your favorite coffee shop and get a notification on your phone. It’s a push notification for 50% off a beverage at the exact coffee shop you’re walking by. Coincidence? Or geofencing advertising magic?

There are many tactics marketers use to target the right audiences. We’ve gone over retargeting, where people visit a site but don’t take the desired action. These people are put into a retargeting group and are served ads to remind them to come back. Today, we’re going over another strategy marketers use to target the right people: geofencing. Geofencing advertising is a strategy where advertisers create virtual parameters and send targeted ads to people within that area. Our example above is exactly this. As you walked by the coffee shop, you were in their marketing geofence.

geofencing ad on phone

How does geofencing advertising work?

Geofencing advertising is a type of location-based marketing that allows companies to target consumers on a more personal level based on their physical location. It works by utilizing a combination of GPS, Bluetooth, Wi-Fi, and radio-frequency identification (RFID).

Marketers can set up a designated geofence by zip code, city, county, state, country, and more. They can be miles wide or narrowed down to a few blocks. Once a geofence is in place, promotions can be sent to users as they enter it.

Let’s break geofencing advertising down:

  1. Advertisers develop a digital campaign that is specifically targeted for a geofenced area.
  2. The advertiser creates a virtual “fence” around a location, such as a store.
  3. A potential customer, along with their smartphone, enters this geofenced location.
  4. The ad is triggered when the prospective customer enters the geofenced area and is displayed on their smartphone. This advertisement may be delivered to the user via display ads, search ads, in-app ads, or notifications.
  5. The potential customer sees the ad and decides whether to take action. Once they leave the geofence, they will not receive that ad anymore.

Best of all? Geofencing is compatible with 92% of smartphones – meaning your message will reach a huge percentage of your audience.


Geofencing advertising best practices

Geofencing doesn’t work for everyone or every campaign. However, geofencing can be an excellent tool if your goals are to:

  • show your offers or product listing near your retail locations
  • run custom offers to different neighborhoods, schools, or venues
  • tailor your message based on user location
  • target shoppers at a competitor’s location
  • show a message to people attending a particular event
  • drive more local traffic to your door

To get the most out of a geofencing campaign, follow these best practices.

targeted geofencing advertising pin

Target the right place

This seems like a no-brainer, but we’ll say it anyway: to have an effective geofence campaign, you need to choose the right location for your geofences. If your fence is in an area irrelevant to your audience, they won’t see your ads. Determine where your audience spends their time and use that data to create your geofence. 
finding the right audience size

Find the right audience size

Your geofence needs to be just the right size to work effectively. If it is too small, you can limit your audience. If it’s too large, you’ll capture people who are too far away.

So, what’s the ideal size? If you’re looking to increase foot traffic, a rule of thumb is an area within a 5-minute walk to your location. For potential customers who are driving, an area within a 10-minute drive. This may seem like a small perimeter but remember: the geofence is for customers who are literally minutes away from your business.
a person clicking on a Shop Now CTA button

Drive action with an inspiring CTA

All ads need a CTA, but if you’re relying on local traffic, you’ll need a very compelling CTA to get people to take action. Generic CTAs like Click Here, Submit, and Confirm aren’t inspiring. CTAs like Claim your coupon! and Save now! are compelling enough to make people pay attention, and hopefully, encourage them to stop by.

adding behavioral targeting to advertising

Add behavioral targeting

Of course, every person who enters a geofence isn’t going to be your ideal customer. Marketers can target the right people by layering behavioral data with location data. If you’re not sure who your target market is, our article tells you how to find them.

Creating targeted geofencing advertising campaigns based on time, buying habits, interests, browsing behavior, and more ensures your marketing dollars aren’t wasted on the wrong people.

optimizing a geofencing advertising campaign

Optimize your geofencing campaign

Like any ad campaign, analyze and optimize your geofence campaigns for the best results. Are you achieving your goals? Measure how customers respond to each message and figure out what works best for your target market. Review ad performance and consider updating creative, running A/B tests, or adjusting other things where needed.  

Where can geofence campaigns run?

Now that you know how geofencing works and some best practices to follow, what platforms support geofence campaigns?

geofencing ads can run on social media

Geofencing on social media

Most major social media platforms like Facebook, Instagram, Snapchat, LinkedIn, and Twitter have geofencing capabilities.

Google ads support geofencing campaigns

Geofencing on Google

Google Ads supports geofencing on search results, display, and YouTube.

geofencing ads on OTT/CTV

Geofencing on OTT/CTV

Target audiences on both big and small screens through CTV and OTT devices. Your geofenced video ads can run on Xbox, PlayStation, Roku, Amazon Fire TV, and other streaming devices.


Is geofencing advertising right for you?

Now that you know how geofencing advertising works, does it have a place in your marketing strategy? Geofencing technology can help brands win more business and boost relationships with their customers. Because geofencing advertising is based on customer location and behaviors, it offers a more personalized experience, resulting in greater campaign engagement.

Using experienced geofencing experts can help determine the best way to set up a geofence campaign and implement best practices.

Post wrap up

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