The Basics of Geofencing for Advertising: A Beginner’s Guide

Sridaran Baskaran
11 Min Read
what is geofencing advertising explained in detail-min

Using Geofencing technology businesses can target ads to specific geographic locations using GPS or RFID (radio-frequency identification) and WiFi technology. In the United States, around 92% of mobile phones are compatible with GPS. Using this geofence targeting, businesses can target specific locations. So, people who are physically present in the particular location will see the advertisements. This is particularly useful for advertising to local customers and creating highly targeted campaigns.

As of 2022, around 6.65 billion smartphones are available in this world. This is nearly 86% of the global population.  These devices make it possible to track people’s location in real-time, which allows businesses to deliver highly relevant ads to potential customers at the right place and at the right time. This enables the opportunity for “Geofencing Advertising”. 

In digital advertising, showing the advertisements to the right audience is very important. Here, the right audience includes many factors like right location, specific interest, and etc. It’s very easy to track the exact location of the user through a smartphone. So, advertisers can provide more personal and engaging experience for the customer by tailoring the advertising based on their location.

How does geofence advertising work?

Geofencing uses location data to determine whether or not a device is within a specific geographic area, or “geofence.” This data can be obtained from a variety of sources, including GPS (Global Positioning System), Wi-Fi, and cellular tower triangulation. 

When a user uses a mobile application or browser from their GPS enabled smartphone, the ad request is sent to the advertising platform along with the location data. For example, if any user watches a video in youtube on their GPS enabled smartphone, youtube sends an ad request to the main ad server platform with many data points including location data. If any advertiser runs an advertising campaign to target a specific location then their ad will show to that user. 

The types of location data used for geofencing can vary depending on the specific application. GPS data is the most accurate, as it can pinpoint a device’s location to within a few meters. Wi-Fi and cellular triangulation, on the other hand, are less precise, but are still useful for creating geofences around larger areas, such as a shopping mall or an entire city.

Almost all digital advertising platforms have the ability to deliver ads based on the user’s location. So, it’s very easy to target the users based on their current location. To create geofence advertising, the business first needs to identify the location they want to target. Once identified the physical location, they need to setup the ad campaign. The ad campaign delivers the ads to the user who are physically available in a particular location.

Advantages of geofencing for advertising

One of the biggest advantages of geofencing for advertising is its ability to deliver highly relevant and targeted ads to potential customers. Because geofencing uses location data to determine who sees an ad, businesses can be sure that their ads are being delivered to people who are actually in the area and likely to be interested in their products or services. This increases the relevance of the ads, making them more likely to be acted upon.

Using geofencing technology, it can be very easy to deliver the ads to specific users. So, the conversion rate will be very high for the advertising campaign that uses geofencing. For example, a fast-food restaurant could create a geofence around a nearby office building during lunch hours and deliver ads to people who are nearby, encouraging them to come in and buy lunch. Similarly, A store can deliver an offer to people in a nearby mall while they are shopping, increasing the chances of making a purchase. Also, you can target competitor’s locations and show your offers to the users when they visit your competitor’s places. 

Examples of successful geofencing campaigns include a real-estate company using geofencing to target people who are near open houses, a clothing store targeting customers who recently visited a competitor’s store, or a car dealership targeting people who recently searched for new car online.

Geofencing can also help businesses reach their target audience more effectively. By targeting specific geographic locations, businesses can be sure that their ads are being delivered to the people who are most likely to be interested in their products or services. This helps to increase the ROI of their advertising efforts by reaching the right audience, in the right location, and at the right time.

Moreover, Geofencing can also be used for retargeting, where a business can target customers who have previously interacted with their business. This allows a business to maintain a relationship with their customers even after they have left their physical location, increasing the chances of repeat purchases or conversions.

Best Practices for Creating a Geofence Advertising Campaign

Perfect planning and execution are very important for creating an effective geofencing advertising campaign. Here are a few best practices to keep in mind when creating a geofence advertising campaign:

Define your target audience: Before creating a geofence, it’s important to know who you want to target. By defining your target audience, you can better understand where they are likely to be and which types of location data to use.

Choose the right location data: There are different types of location data available, including GPS, Wi-Fi, and cellular triangulation. Each has its own level of precision, so it’s important to choose the right one for your campaign. If you’re targeting a small area, such as a single store, then GPS data would be the best choice. However, if you’re targeting a larger area, such as a shopping mall or an entire city, then Wi-Fi or cellular triangulation data would be more appropriate.

Set a realistic radius: You can set radius on your ad campaign. So that you can target more people nearby to your targetable location. Smaller radius will be more restrictive but you can target the exact potential customers. Larger radius will be less restrictive but you can reach more customers but not many potential customers. Large count of audience availability is very important for goal optimization. So, maintain balance between both factors. 

Create a well-timed campaign: Geofencing ads can be timed according to the current location, time of day or even day of the week. So, it’s important to consider when your target audience is most likely to be in the area and schedule your ads accordingly.

Measure your campaign’s performance: It’s important to measure the performance of your geofencing campaign to see how it’s impacting your business. Metrics to track include the number of ads delivered, the number of impressions, and the number of conversions. This will allow you to adjust your campaign as needed to improve its performance.

Optimize your Campaign: Use data and insights to optimize your campaign and make improvements. Use A/B testing and different targeting criteria to find the best approach and make data-driven decisions on your targeting and messaging.

By following these best practices, you’ll be well on your way to creating an effective geofence advertising campaign that can help you reach your target audience more effectively and increase conversions.

Conclusion

In conclusion, geofencing is a powerful tool for targeted advertising that can help businesses reach their target audience more effectively and increase conversions. By creating virtual boundaries, or “geofences,” around specific locations, businesses can deliver ads to people who are physically present in that area. This allows for a more personal and engaging experience for the consumer, by tailoring the advertising to their current location, time, and context.

Throughout this blog post, we’ve covered the basics of geofencing, including how it works, the advantages it offers for advertising, and best practices for creating a geofence advertising campaign. The key takeaways are:

Measure the performance of the campaign and optimize it. With the rise of location-based services and the growing use of mobile devices, geofencing is expected to become an increasingly important aspect of digital marketing strategies in the future. Businesses of all sizes can leverage this technology to improve their advertising ROI and effectively reach their target audience. We encourage readers to explore the potential of geofencing for their own advertising efforts and to continue learning more about this exciting technology.

For readers who want to learn more about geofencing, some additional resources include, reading industry publications such as AdWeek, MediaPost, or Digiday which cover Geofencing and location-based advertising topics, or consulting with a geofencing service provider, which can help businesses to create and manage geofence advertising campaigns. Additionally, there are many tutorials and courses that could help deepen the understanding of this topic.

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