Geofencing: The future of Targeted Marketing

Geofencing is a type of marketing or advertising strategy that targets a specific set of people
from a defined geographical area within specified barriers. In other words, we can say it is a
location-based marketing tool that lets us connect to users through websites, applications, etc.
This technique majorly focuses on the local customer segment for any business. It would not
have been possible 20 years back. Still, with the advancement and availability of GPS, high-
speed Wi-Fi, Bluetooth, radiofrequency, and other technical aids, geofencing seems like a
cakewalk today. Geofencing is widely practiced in the United States but is yet to be explored
in developing countries like India. Considering the example of India, several local shops or
brands are striving to grow day in and day out. Although they target the limited local
population but establishing their reach is quite tricky. Here comes the role of geofencing that
helps us to market to our target audience by analyzing their browsing, shopping activities,
etc. Applications like Instagram, Snapchat, etc., earn significantly through geofencing
campaigns.
Let us now understand how geofencing works, why we should use it, and where somebody
should place the geofence. Initially, we create a geofence (an invisible barrier) for the target
area. We make a digital ad and campaign it to the audience. Any user that enters into our
geofence boundaries gets added to our target audience, and then we start serving ads to the
customer through notifications, in-app engagements, etc. The functioning of a geofence may
seem complex from the outside but is pretty direct. Now the question arises why we should
use geofencing. As we know, geofencing is an entrant in targeted marketing; implementing it
will give us a leg up over our competitors. As the number of smartphone users has drastically
increased, it provides one of the best ways to reach the target audience. Customer data
integrity is also not breached as customers decide whether or not to share the location. A
recent study suggests that 70% of users are willing to do so. The various places where a
geofence can be placed include – our business location, nearby marketplaces, streets,
industrial hubs, competitor’s location, other locations depending on our target customers.
Suppose I want to open a burger outlet that serves both dine-in and delivery purposes. Now I
need to establish a customer base and let people know about the eatery. As our strategy, we
need to set a target audience and a precise geofencing area. Our customer base would include
people close to the diner, people near hotels who can order pizza for delivery, student-centric
areas like colleges, universities, hostels, etc. The digital ads would be broadcasted to
everyone’s mobile phones, and once someone goes through it, various food ordering and
delivery options would be available. Hence, geofencing plays a significant role in attracting a
vast customer base.
Moving forward, let’s understand the benefits and strategies that can be used for efficient
geofencing. The various benefits of geofencing include –
 Stronger User Engagement – Geofencing effectively helps in engaging the targeted
audience. The message/ad is getting delivered to the customer searching for a
particular product or service.
 Optimization of data and analytics – Being entirely data-driven, geofencing gives the
analytics team a tremendous amount of user data to improvise marketing strategies
and campaigns.
  Return on Investment – As the marketing is customer-specific, i.e., we already have a
defined target base; hence it is believed to be the most efficient.
 User Data Integrity – Since location is the only user information required for
geofencing to operate, the user willingly gives this information. Hence we can say it is
a very safe way of targeting marketing. As user data concerns are increasing every
day, it will be the future of targeted marketing.
Many successful companies like American Eagle, Taco Bell, BMW, Domino’s, Volkswagen,
etc., have adopted Geofencing as one of the primary strategies to boost their sales. Various
geofencing strategies adopted by the prominent companies include –
 Research your audience – Study your target audience and create ads that encourage
them to buy your product and keep them engaged.
 Review your data at regular intervals – This helps in conducting successful campaigns
and optimizing the ad results.
 Use right-size geofence – Create fences with small, compact boundaries to drive
correct results.
 Use several targeting techniques – Several tools like content targeting, retargeting,
context targeting, etc., are available for the best results.
To conclude the article, we can say geofencing is an excellent way of digital marketing that
focuses on the right set of audiences at the right time.