Geofencing Marketing: How Geofence Marketing Works

Geofencing marketing is a strategy in which brands target a specific geographic area to display their digital advertising. This technique allows companies to serve targeted ads to populations, demographics, or attendees more likely to engage with their brand or complete a purchase. For example, companies may use geofencing marketing in a specific zip code because of people in that area’s history of buying a product or service. This allows brands to target users more effectively and get a more significant return on investment (ROI) on ad spend. Using a GPS, companies can also set a geofence or a virtual boundary that would connect to customers through mobile devices.

Geofencing is a digital marketing strategy that lets companies serve ads to users in key areas, even competitor locations. A company can tie campaigns to specific places in several ways:

1. 1. IP addresses: Companies can serve ads to users signing in to a location’s free wi-fi network before they can access the internet.
2. 2. Stores: Companies can set up a geofencing technology in their store so that when customers enter a space, they receive specific offers via push notifications on their phones. For example, if you enter a grocery store, you might get a notification about a sale on milk in aisle four.
3. 3. Virtual boundaries: Companies may create ads for potential customers within a short radius of their storefront. This invites more foot traffic, spreads brand awareness, and can lead to real-time engagement.
4. 4. Zip code: In Facebook, Google, or other digital ads, companies can serve ads by zip code, even getting as specific as targeting street address.

Geotargeting marketing efforts come with a host of competitive advantages.

1. 1. Brand awareness: Geofencing marketing campaigns get mobile ads in front of potential customers, heightening a user’s familiarity with a company’s ethos and products.
2. 2. Clear metrics: Online sales can tell you the places where customers live, helping you better determine if people in a specific area have made transactions. Before buyers go through a sale, you can ask them to create a profile to gain more customer data.
3. 3. More walk-ins: Big brands or small businesses with brick-and-mortar locations can use this marketing tool to target a geofenced area five minutes from the storefront to entice customers with special offers.
4. 4. Retargeting: After users engage with your display ads and you gain location data, you can retarget to elicit more sales later.
5. 5. Targeted optimization: Geofencing advertising allows you to more precisely target would-be buyers, creating a more substantial return on investment.

Make your geofencing work for a more successful ad campaign by following these tips:

1. 1. Create compelling ads. Test a few versions of ads to make sure your copy and design are most eye-catching to your intended audience.
2. 2. Identify a target audience. Before you put spend behind this mobile marketing tactic, identify who you are targeting clearly. Choose a demographic specific to one’s age, gender, or other traits. You then have to learn where that population lives, shops, and works so you can target accordingly.
3. 3. Include a call to action. Your call to action, or CTA for short, will help you clinch a sale or get users farther down that path, further clicking through your site and engaging with your content and products.
4. 4. Retool and optimize accordingly. Let your ads sit for a week and see how they do. You can then spice up your ads, add incentives, or change locations and times to make them more lucrative.
5. 5. Start with a small geofence. If using this marketing strategy for the first time, start with a smaller geofence to test the waters and see how it performs. Typically, companies pay a rate by CPM, or cost per thousand impressions. Include this in your marketing budget and build the fence over time.
6. 6. Target at the correct times. Try a few different time blocks to see which periods are most effective, and then put more money into those slots and less into others.

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