What Buisnesses Should Know About Geofencing
Like fashion, sports, news, and politics, digital marketing so too has "trends." And one of the coolest (although admittedly not newest, but more on that later) new targeting technique to really come into its own recently in digital marketing is hyper-targeting technique called "geofencing".
What is geofencing?
Geofencing is a location-based technology that establishes virtual borders in the physical world. Geofencing can use either GPS or radio frequency identification (RFID) to determine the location of a given smartphone, and marketers can deliver messaging to smartphones based on when they enter a predefined area, or geofence. This geofence can be either a circular radius stemming from out from a given point, or can be a polygon.
How is this different from geotargeting?
While it technically is a kind of geotargeting, think of geofencing as the next generation of traditional geotargeting. As an umbrella term, geotargeting is simply specifying a geographical location/area, and only serving ads to that physical area. Geotargeting can be done on desktops, laptops, and mobile devices and can target based on areas geographic of focus like country, state, city/town, zip code, and even IP address. Geofencing takes geotargeting to the next level, in that it allows for extremely specific geographic targeting.
How does this relate to marketers?
Geofencing is a powerful tool for marketers because it allows for far more specific- and geographic targeting. For instance, imagine a shoe repair shop wanted to announce his opening to people who lived near his shop. A "traditional" geotargeted campaign may only be able to get as granular as a zip code. While this may work in a rural area where there aren't likely to be many cobblers and so people will travel from a distance for this niche service, New Yorkers are used to having all of their primary shops and services with just a few blocks walk. So with traditional geotargeting, the cobbler may still only reach people who live within a one mile radius of the new shoe repair shop, it's very unlikely someone who lives way Uptown- or across the river- will travel to this shop. In essence, this shop is wasting money advertising to people who will never come to his store.
However, with geofencing, targeting can get MUCH more geographically precise, thus enhancing not only the response rate and effectiveness of the campaign, but also decrease the costs of wasted ad dollars.
We'll get into this more in the next section, but using the example above, the shoe repair shop could employ geofencing (vs geotargeting) and only reach people who live within 2,000 feet of his shop, and/or people who work in the area, as well as people who are customers of his COMPETITORS in the area.
What kinds of business can, should use it?
Geofencing campaigns are a great option for many businesses/advertisers, but those that tend to particularly benefit are local businesses. The reason for this is multi-fold. First off, the large "corporate" advertisers that seem to be on every billboard, TV commercial, and website in town have huge budgets to reach everyone- with the idea of simply enhancing awareness. However, most smaller/independent businesses- especially brick and mortar ones-, simply don't have this luxury and need to see a measurable uptick in sales their advertising generates. A digital marketing campaign with geofencing is a great option, for this very reason.
Geofenced campaigns allow advertisers to spend their limited advertising budget reaching only the people in the area who are most likely to become customers. For instance, a restaurant may only want to advertise to people in a 5 mile range, between 3p and 6p, as they're deciding what to do for dinner. A dry cleaner might want to reach workers in a 2 mile radius and let them know about their convenient hours for pick up/drop off and how they're a trusted choice of other neighborhood professionals. In short, geofencing allows an advertiser to be super-specific about where their ads are shown (as well as when and to whom, but more on that in a minute), thus reducing wasted spend in reaching folks who are extremely unlikely to ever become a customer.
MAYBE: examples of a few other businesses who could use this?
An added- and EXTREMELY valuable- feature of geofencing is the ability to actively target- and hopefully "steal away"- your competitors customers.
What's "conquesting" and how does it relate?
The term "conquesting" has had various applications in advertising and marketing over the years, but in this instance, we're using the term geofencing conquesting in reference to how a business could explicitly target the customers of their direct competitors with a series of digital ads.
Geofencing conquesting allows advertisers/ businesses to serve ads specifically to consumers who already patronize similar- but competitive- local businesses. For instance, if a car wash- Super Car Wash- wanted to grow their business, the most obvious pool of new customers would be people regularly get their car washed at OTHER car washes in town. Super Car Wash could use both real-time and historical location-data to serve ads (display ads on local sites, ads on social media, etc) to their competitors' customers to entice them to use Super Car Wash instead. And geofencing conquesting is far more effective and cost-efficient than a broader-targeted ad campaign, because a given advertiser is only speaking to those most likely to become customers vs everyone in a given are (including those who don't own cars, etc).
Why geofencing without an app is awesome, and how LS Media can help
While geofencing may seem like a fairly new concept, it's been technically available for many years. The difference- and opportunity now- lies in how advertisers/ marketers no longer need to have a proprietary app to take advantage of the capability.
For years, apps have effectively been able to geofence users by leveraging the backend framework- also known as the SDK- to leverage real-time, GPS-based location data that could be used to send the app user push alerts and other forms of messaging/ advertising. The limitations of the capability, however, are clearly limited. In order for a business, advertiser, or marketer to take advantage of this ability, they had to have an app, and could only reach the users who'd not only downloaded the app, but also enabled GPS-based communication. This is of particular note, as many users shut off the GPS setting within apps, as GPS tracking uses a ton of both battery and data. Additionally, building an app is often extremely expensive and time consuming, then the marketing costs of growing the download count (you can only deliver geofenced messages to those with your app) can be astronomical- and therefore completely unattainable for your average business owner.
These challenges, coupled with the fact that most people stop using- or even delete- apps shortly after download (most people only consistently use a few of their apps) make the upside of app-based geofencing limited at best. Thankfully, a few companies- including LS Media- now offer true, non-app based geofencing for businesses.
LS Media leverages data from tens of thousands of wifi access points, cell phone towers, IP addresses, GPS signals, beacons, and more to be able to confidently identify user location both historically and in real-time. We can then target these users across the web- including social- with sequential messaging about our clients' businesses and offerings. Geofencing is a great way for small and local businesses to execute a highly focused, highly targeted advertising campaign and reach only the people who are most likely to become customers.
What will it cost?
Geofencing campaigns start start at $300/mo and go up from there. With a low starting point there's a way for almost anyone to use it.
How can I start using geofencing for my business?
If you're interested in launching a geofencing campaign for your business, please contact the team at LS Media today! We'll be happy to have a no-pressure discussion to see how we'd be able to help.