Here’s what you need to know about: what is geofencing!
Whenever you visit a retail store or use a mobile app to order something, you realize that the store gives you suggestions according to your choice. Does your mind start to shoot questions like: why does this happen to me? Does the retailer know me? Did I meet the trader earlier? All of this is possible because of technological advancements.
Here is the answer to all your questions. You get suggestions according to your preferences because geofencing technology is used to track your choices.
Geofencing is a location-based service in which an app or other software uses GPS, RFID, Wi-Fi, or cellular data to trigger a pre-programmed action when a mobile device or RFID tag enters or exits a virtual boundary set up around a geographical location known as a geofence.
What is a geofence?
A geofence is a virtual perimeter around a real-world location, like a restaurant, shopping mall, or airport. Geofences can vary in scale and size. Either you can choose a radial virtual boundary or a polygon-shaped boundary.
Location accuracy matters in geofencing. You need to know whether the customer is on your store premises or has just entered the store. Marketers need accurate geofencing, and to detect a geofence, requires a combination of GPS and WiFi.
By using geofencing, you can:
- Target an area around your market
- Send text, email, or any other notification
- Show ad of your product or service
- Use only a specific area
- Reach customers in real-time
What is RFID?
Radio Frequency Identification (RFID) refers to a wireless system with two components: tags and readers.
The reader is a device that has one or more antennas that emit radio waves and receive signals back from RFID tags.
Tags are devices that use radio waves to communicate their identity and other information to nearby readers. There are two kinds of tags, namely active and passive. The readers power passive RFID tags; they don’t have a battery in them. At the same time, the active RFID tags consist of batteries. RFID-enabled software is used for geofencing.
Difference between Geofencing and Geo-Targeting
Most of the time, people use both terms interchangeably; still, there is a difference between them.
Geofencing means drawing a virtual barrier around a location by using the IP address of the user. For example, a women’s clothing brand wants to target women consumers around their shop location. You can use geofencing technology to surround that area; whenever a women customer enters that area, she will get an email or notification about the brand.
Geotargeting is a form of targeting by the location that lets your ads appear to customers in a certain physical place, or set of places, that you specify. It is used to deliver ads to people that meet specific targeting criteria.
In simple terms, first, you create a geofence, and then you geotarget the users.
Now that you know, what is geofencing, let us see how it works.
How geofencing works?
First of all, an administrator or developer will establish a virtual boundary around a specified location in GPS or RFID-enabled software.
This can be used to draw a circle of 150 feet around a location on Google maps.
This geofence, once created, acts as a trigger or a response when a specific customer enters the area.
Is geofencing legal?
Privacy concerns are challenging companies a lot nowadays. The users have also started to question the brands when they get spam messages.
More than 80 countries have implemented digital privacy regulations. Companies using location-based ad technologies mostly generate anonymized data. Still, it’s important to take care of consumers’ personal information. Businesses that want to use geofencing should abide by the laws according to the General Data Protection Regulation (GDPR) in the EU and California Consumer Privacy Act (CCPA).
Indian states have been asked to seek the approval of their Home Secretaries under the provisions of Section 5(2) of the Indian Telegraph Act, 1885, for the specified mobile numbers to request the DoT to provide information by email or SMS.
To protect user privacy, apps should always seek location permissions, use foreground and background location access.
Why does marketing strategy need to be focused on mobile apps and mobile devices?
As the name indicates, mobile is always on the move and therefore considered best for locating and marketing the services.
Mobile is always at the consumer’s arm’s reach, but at the same time, no consumer will tolerate spam messages or emails. Thus a strategy needs to be developed for mobile users targeting location-based marketing. Geotargeted ads are useful when you want to:
- Increase foot traffic: You can use coupons, google ads to bring people to your real store. If people are visiting your website, then they will be happy to reach your nearby stores. Location-based marketing can be used to increase foot traffic.
- Engage crowd: Engagement has become significant in the online and offline world. You want people to engage with your brand, and then it’s easy to do by geofencing.
- Target competitor locations: Businesses can draw customers currently shopping in their nearby shops to visit their stores.
- Understand consumer behavior: The average consumer spends more than 5 hours on the smartphone. It becomes easy to understand and track their behavior. Suggest products based on previous in-app purchases of consumers.
3 famous brands that utilize the power of Geofencing
By now you know, what is geofencing and how it works. But do you know which famous companies are currently using this technology? If you don’t, find the answers below.
Starbucks uses geofencing extensively with its interested customers. They send push notifications to customers when users walk by their business or are in a nearby area. One example is their happy hour special, which occurs on Thursdays from 2-7 p.m. Starbucks is also known for sending personalized messages.
Starbucks sends personalized messages; they mention the customer’s name and incorporate a promo of their favorite beverage.
You cannot miss this one. Most people have received Uber notifications while passing by airports, clubs, hotels, restaurants, and more. Uber is one of those companies that relies heavily on geofencing marketing.
Whenever you get off a plane or train, you must have received a push notification from Uber to tell you that their services are available nearby.
This brand uses geofencing technology along with Snapchat filters to drive people towards their stores. The moment one of its customers reaches a geofence area, Dunkin sends an app notification stating its exclusive deals for drinks and food from Dunkin.
How Geofencing Creates ads for Mobile apps
Smartphone users make two-thirds of digital ad spending, and the numbers will keep increasing in 2021. Geofencing technology is now being used actively by more number to brands to create more effective ads.
The objective of geofencing is to target specific customers by sending them text messages classified under mobile advertising. The messages will be useful to the consumers to purchase the products or services.
Cellular data, WiFi, and GPS alert marketers when a mobile device enters the defined perimeter. The location data signals then trigger an email, text message, or app notification. It acts as a prompt for the consumer to visit nearby shops or order something.
To track your specific perimeter, Google maps are being useful. Here are four ways discussed to get started with Geofencing.
- Your existing app strategy needs to meet the requirements of geofencing.
- Once you choose a good geofencing software, test the software on your app. Many times software comes with a dummy app for testing.
- Take help from app development to implement the software.
- Make good ad campaigns, notifications to attract customers.
What is geofencing for marketers?
You have just started your restaurant, and you want people to visit your restaurant. The easiest thing that you can do is to enable a geofence in that area.
You can use geofencing to run ad campaigns regarding your business. When consumers enter the virtual perimeter, you can send them mobile push notifications or a mobile ad along with your address. Other than that, the advertisement includes discounts, new menu items, exclusive offers, or a happy customer experience.
Geofencing for competitor’s locations
Location-based marketing can be done easily by geofencing. Geofencing helps you to do mobile marketing in a very economical way. Geofencing not only recognizes your business to your potential customers, it also gives information regarding your competitor’s location.
Suppose a customer is there in the nearby store, then you can send promo coupons about your shop. This will act as a reminder to them that your shop is just a few steps away.
Geofencing by using Radial targeting
In radial targeting, customers are targeted around a specific circular radius from your store. Radial targeting is most commonly used, and it works best when your geographical location is accurately shown on google maps.
Geofencing using Polygonal geofences
Not every time a radial virtual boundary set is used. For example, in airports, if you use circular virtual geofence, you may use nearby locations that are of no use to you. Polygon geofences are used in more complex places.
5 things to consider when using geofencing in your specific location
You are still wondering how to use location services, targeted messages, mobile alerts to your consumers. You are not sure whether to hire a tech team to build accurate geofence to market your services in a specified location. Or it’s just that you want an off-the-shelf solution to check geofencing capabilities.
If that’s the case, here are a few things to consider:
- Deciding the number of geofences you need for your ad campaign is the most crucial step. While Androids work for 100 geofences per application, iOS only takes 20. Find the ideal size of your geofence. A bigger geofence will drain money, and maybe you will not convert those people into your loyal customers.
- Battery drain is for real, so while selecting a geofencing software, keep in mind that GPS is being used to monitor the physical location constantly, so it’s important to choose a good software or tell your tech team to consider battery drain. The software should be optimized for battery saving.
- Mobile is easier for location-based marketing data and advertisement, though smartphone users dislike spam messages. Your messages to the users should be relevant and promising. Know your audience, identify their ages, genders, and shopping behaviors to make your ads work. Use call-to-action to close the deal.
- Send good personalized, relevant messages to your customers. Make a team of good marketing experts to build high-converting campaigns. While implementing geofencing, one aspect is that companies forget to add a human touch to their targeted advertisements. So focus on creating good personalized ads rather than spam messages.
- When you target your buyers around a specific location, communicating your ads on triggered geofences uses a lot of bandwidth. For that end-user has to pay. Better to use a proper virtual fence and geofencing that uses less bandwidth. You cannot always be dependent on GPS.
Are you still not sure whether to use geofencing or not? Here are the top 3 reasons to use them:
- Most people love to shop near the place they live. Geofencing helps with local marketing. Targeting people as they make their way past shops is a good marketing strategy.
- Geotargeted ads help understand the behavior of your consumers. It collects data about consumers who purchase more in real-time. The data can also be used to know which other stores your consumers are visiting, billboards, and roads they frequently use. One thing to be noted is brands use Anonymous location-based data, not any personal information.
- It helps to increase brand attention and promotion of your online presence. Very similar to what ‘Dunkin’ did for the promotion of their brand. These ads provide the opportunity to remind customers about your brand. The moment customers receive the notification, they realize that their favorite brand is giving a discount or coupons.
The Future of Geofencing for Marketers
Till now, you read what is geofencing, how is it used, its advantages and disadvantages, and whether it’s legal or not. Now, let’s see what geofencing holds in the future.
The geofencing industry is expected to grow over by 27% by the year 2022. Geofencing gives a personalized touch to mobile ads. It has given a different meaning to location-based marketing. When the consumer crosses the virtual boundary, brands get an opportunity to personalize ads for them.
This works as a call-to-action for your customers, and the better your advertisements are, the better will be your brand loyalty. So, a technology like this will never get out of action. Geofencing is the right way for marketers to reach their goals and stand out from the crowd.
I hope this article on “what is geofencing” was informative and interesting, and hopefully, it helps with your future plans if you are into marketing and business.
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