How Does Geofencing Work?

Geofencing works by using a combination of technologies like cellular data, GPS, and Wi-Fi to determine the exact location of your targeted customer. 

Who Uses Geofencing?

Geofencing is not only used by retailers looking to drive traffic into their locations. Businesses like Amazon use them for their drones. Uber uses geofencing to maintain perimeters at airports and other locations. Honeywell uses it as well to know when no one is home and it can reduce energy usage.

What is geofenceing

What is Geofencing?

Geofencing involves setting up a virtual boundary around a specific location so that when users with mobile devices cross that boundary, they receive a pre-programmed notification or ad. Mobile ads can be programmed to respond to consumers’ physical locations. Customers movement through specific areas can also trigger automated, location-based messages.

Geofencing offers some of the most targeted marketing campaigns for your business since it capitalizes off users’ physical locations. In fact, over half of customers who received a location-based notification ended up visiting the business that sent it. Ads with geofencing lead to more than double the click-through rate. 71% of customers indicate that they prefer personalized ads, making mobile ads with geofencing particularly effective.

Common actions that can trigger a geofencing ad prompt include: 

  • Push notifications on users’ mobile devices;
  • Relevant mobile social media ads;
  • Text messages or alerts to grab customer attention 

Geofencing also allows you to access location-based consumer data that can help you determine how customers interact with your business.

Ultimately, geofencing gives your business the opportunity to physically target your ads and messaging to reach audiences that are the most likely to engage.

How Geofencing Works

The first step of geofencing is determining your preferred virtual geographic boundary. You’ll have to define the physical perimeter that will trigger alerts when users cross it. For example, you could select a 100-foot radius around your business’s physical location according to GPS or RFID software.

Retailers can designate a specific boundary around their store that will trigger a social media ad for users who enter the perimeter. Geofencing is often programmed into mobile applications, as well, as long as users have enabled their location services. That means if a user has a specific retailer’s app, they can receive a personalized message from the app if they cross the geofencing virtual boundary.

Geofencing relies on GPS, Wi-Fi data, and cellular data to accurately pinpoint potential customers based on their location. You can then automatically deliver targeted messages to your preferred audience, meaning you have a better chance of drawing in local customers.

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Geofencing Applications

We carry our mobile devices everywhere. The average user spends, on average, 5 hours every day on their mobile device, meaning mobile devices are an important new marketing channel. Many of them also keep their location services on, which allows local retailers to track which users are nearby at a given moment. Businesses are starting to catch on to how powerful targeted messaging, notifications, and mobile ads can be. That’s where geofencing comes in handy.

Geofencing gives your business the opportunity to craft highly specific and targeted ad campaigns and to reach out to the most likely potential customers. With geofencing, much of this marketing work is automated, without losing the personalized touch customers crave.

You can set up automated messages and programmatic ads that will help draw more attention to your business while giving you the time to focus on other aspects of your business.

Here are some of the top applications of geofencing technology:

top applications of geofencing technology

Social media is a goldmine for businesses looking to get a message out to potential customers. Location-based filters and public stories are key ways businesses can encourage customers to share promotional content when they are physically near the business.

Ads are most effective when they are reaching a target audience. Geofencing allows you to target your ads to nearby customers who are then more likely to walk into your store or check out your business if they view a relevant ad. You can push promotional, location-based ads on the web or social media to advertise to the most likely customers.

Geofencing isn’t just limited to businesses and events. You can also use geofencing technology around your house with smart devices. You can set up routines to control your smart appliances, manage the thermostat, and save energy all based on whether you’re in the geofence or not.

When you’re in a big crowd at an event, geofencing can help get messages quickly out to everyone in attendance. Geofencing is a handy way to reach everybody in a crowd automatically.

Geofencing also has implications for employees. Geofences can help monitor employees and streamline the process of clocking and clocking out so that employee time cards can be automated.

Geofencing has important applications for telematics, as well. With geofencing, you can more easily track people, vehicles, mobile devices, and packages so that when they enter a predetermined geographical area, it will trigger alerts.

Although many people worry about geofencing and privacy, geofences can also enhance the security of your home or business—all based on alerts that show up on your mobile device. You can connect your home security system to your mobile device. Examples of geofencing and security include alerts about intruders in your home.

Future of geofencing

The Future of Geofencing

While some people critique geofencing as a possible privacy concern, most businesses and marketers are eager to jump on the new technology. Most companies are always looking to target their ad campaigns and messaging to the most relevant audiences. Geofencing gives businesses the power to automatically target highly specific, location-based consumers.

More and more businesses are starting to invest in geofencing technology for their marketing campaigns. Although digital marketing tends to evolve rapidly, signs point to geofencing being an important marketing tactic as we move into the future.

How do I Setup Geofencing?

To set up geofencing for your business, you should start with a GPS or RFID-enabled software that will allow you to designate a virtual boundary around your physical store or location. Be sure to set up a boundary that is wide enough to attract a high volume of users, but not so large that you’re notifying people who are miles away. You can define your boundary based on where the most foot traffic is or where your prospective customers are most likely to be.

Mobile apps can also be programmed with geofences that can easily track users’ locations and offer targeted messaging to those nearby. Your geofences can automatically detect if customers enter your parking lot or are walking around a neighboring area. That means if your store or site has a mobile app, you can send promotional reminders about sales, loyalty points, or ads that bring more customers through your doors.

How Effective is Geofencing?

Compared to other forms of marketing, geofencing is incredibly effective. Geofencing offers customers a more personalized ad experience based on their location, which always leads to more successful campaigns.

The data shows that customers are more likely to click through ads with geofencing and will often visit the physical location being advertised with geofencing. Nearly 75% of customers follow the steps of a marketing call-to-action when they receive one near a retailer’s store.

Traditional advertising often means putting up ads and not knowing who will see them. Instead, mobile geofencing is a powerfully selective tool that can start bringing more customers into your business right away. With geofencing, you don’t have to waste your advertising budget on unlikely customers. You can more effectively manage your marketing campaigns to the users most likely to engage.

For best results, geofencing notifications, messages, and ads should have a clear call to action that encourages customers to stop by the store right away or take advantage of a last-minute sale. Targeting people when they’re right by your store can remind them about your best deals and more effectively use your marketing dollars.

Geofencing can even give your business a competitive advantage against the competition. Some marketers use it to target customers while they are near other businesses. You can set up geofences around competing businesses to draw customers away from some of your key competitors. When customers are near your competition, you can send well-timed coupons, promotional deals, or loyalty point reminders that bring customer attention back to your business.

With all these different options, mobile geofencing technology offers a large variety of benefits to help you refine your marketing campaign and reach a wider audience.

Geofencing and SEO Design Chicago

Geofencing is a powerful way to connect with more potential customers to get them stopping into your store. But managing your own geofencing data and automated triggered messages can be time-consuming. That’s where SEO Design Chicago can help. Our digital marketing professionals are ready to set up geofencing for your business and manage the automated messages that your prospective customers will see. We know the best strategies to maximize the value of your marketing budget. If you want to start targeting the best audience for your company, SEO Design Chicago will work with you to start using geofencing to your business’s advantage. Contact us today to get started!

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