What is Geo Fencing and Its Advantages In Modern Adverting World

Geofencing is location driven digital marketing tool that allows marketers to serve ads to people based on their physical activities and places that they go. Under this method of modern marketing, advertisers can send messages to smartphone users in a defined geographic area. Technically speaking, it restricts the placement of digital ads to pre-defined geographies based on the location of the user’s IP address. For e.g., shoppers that arrive at a mall can be targeted with ads by stores located in that mall.

There is an increasing movement of consumers from traditional web browsing to mobile browsing on tablets or smartphones. Most of the advertisers are now using a new mobile marketing technique called geo-fencing when try to target their potential customers. Digital marketers can put some great strategy to Geofencing to make their online campaigns even more effective. 

Today our mobile devices are continuously transmitting its location by giving off a device ID and that is how a user can get a nearby restaurant or can use Google maps to find the way to home. The device ID can be identified by utilizing longitude and latitude and then deployed within online advertising campaigns. When users load websites or apps that accommodate advertising, advertisers can identify these devices and target those users with advertising messages, all in a privacy compliant manner. Advertisers and agencies can create custom segments based on observations of location-based consumer behavior.

 Geo-fencing also showcases the effectiveness of advertising by letting advertisers know the amount of traffic it has generated to a pre-defined location. Thus advertisers can easily judge the number of users who have clicked on the ad and then came to the location of the advertiser.

Geo-fencing is little different than Geo-focusing (Targeting) – that is, confining the arrangement of advanced promotions so they just appear to users within a predefined location of the user’s IP address. Geo-targeting makes sure that your ads are only shown to the people in the specific state, city, or even postal code that you want, ensuring that impressions aren’t wasted on people that will never visit your local business. 

Geo-fencing technology goes little further by creating a fence around advertiser’s pre-defined location or area, such as a few square miles around your store, or along a strip of highway frequented by commuters. Ads will then only be shown to people who move into this fenced area.

Even though people can buy nearly anything from anywhere with a simple click of a button, most customers still prefer to shop locally. 87% of consumers’ disposable income is spent on companies located within 10 miles of their home. This means that business owners that are able to tap into their local market have a good chance of improving conversions.

A common saying in advertising “Half of all money invested in advertising is wasted; the problem is determining which half. Geo-fencing or and Geo-targeting can reduce the waste by eliminating many of the unknown factors involved in advertising. Traditional advertising method relies on non-specific targeting, which leads to low conversion rates and high media investments. A restaurant owner looking to increase his lunch business can use geo-location marketing strategies to offer a lunch coupon to anyone using an internet search for “Good Places to eat lunch” in a given area.  

Geo-precise advertising also empowers advertisers to intercept customers from competitors. Instead of putting up a geo-fence around their own locations, business owners can set-up geo-fences around their rivals’ business location who have similar capabilities. This means when a potential customer is searching for a place to eat dinner near a competitor, the search serves mobile discounts, offers or coupons from your location.  

Many advertisers use a combination of both geo-fencing and geo-targeting to influence users of smartphones and other mobile devices. This strategy is especially popular for retail stores, restaurants, and hotels; however, it can be applied to any type of business or industry.

Geofencing can be a highly effective digital marketing tool, but only when executed correctly. Being tactical in your use of geo-fencing and keeping customers’ feelings in mind will be a big part of making geo-fencing a part of your approach to mobile marketing.