Using Geofencing Advertising to Target Customers at Exactly The Right Place

By Raubi Perilli

      Oct 11, 2020     Solutions    

On the MyArea Network blog, we recently talked about how you can use location as a way to target potential customers based on their city, region, or zip code. The location-based marketing tactic is called geotargeting.

Now, we want to look at another way that you can find and connect with customers based on their exact location.

This location-based marketing tactic is called geofencing, and it's just, if not more powerful than geotargeting.

What Is Geofencing Advertising?

Geofencing advertising is the process of creating a virtual boundary and then pushing display ads to people who move into that virtual boundary. The ads, which show across a variety of display ad networks on websites and in apps, are delivered immediately or set to show to people up to 30 days after visiting the location.

Geofencing uses GPS technology to create a precise virtual boundary around a business or location.

Unlike geotargeting advertising which uses a specific zip code or region to target customers, geofencing advertising creates a border that is defined by a range around a specific location. It is more targeted than geotargeting because it reaches customers based on a very small defined area such as in, around, or near a specific business, event, conference center, or building.

The Benefits of Geofencing Advertising

Geofencing advertising has a variety of benefits for small business and local marketers.

  • Highly Targeted Audiences: One of the biggest benefits of geofencing advertising is the ability to target and reach a very defined audience. You can choose who you want to reach based on what business or location they will visit.
  • Highly Targeted Messaging: When you know exactly who you are reaching, you can create more targeted marketing messages. You can create messaging that is directly related to what the audience is doing or experiencing.
  • Concrete Performance Data: Geofencing produces concrete metrics for impressions, click-through-rates, and clicks so you can easily gauge what is working and improve your campaigns based on performance.
  • Target Mobile Devices: Customers almost always have their mobile devices and phones on them, and they frequently use them even when out shopping. Geofencing advertises to customers on the platforms they use most.
  • No Wasted Ad Spend: Through geofencing, you only advertise to a select audience you know you want to target, and you can use conversion zone tracking to stop showing ads to customers once the perform a desired conversion.

Examples of Geofencing Advertising

To visualize how you can use this advertising tactic, consider these example geofencing campaigns.

Drive Nearby Foot Traffic To Your Business

A business may set a geofence around their business so when customers walk past, they are targeted with ads that encourage them to visit. For example, a restaurant in a mall food court may create a geofence around the mall and create an ad with a 25% off coupon. The ad drives shoppers to visit the restaurant while they're at the mall.

Advertise at Events That Attract Your Ideal Customers

Events often attract attendees that share a similar demographic or psychographic. The theme of the event draws in a certain type of person. If an event is attracting a brand's target audience, it's a great place for them to connect with potential customers. For example, a Mercedes-Benz car dealership could geofence a local auto show to advertise to their target audience while they are all gathered in the same building.

Catch Attention During the Buyer's Journey

A brand can look at the journey a customer takes on their way to doing business with them and find places to advertise based on that process. For example, a lawyer who represents people in auto accidents may choose to geofence an auto body shop or an urgent care. The law office's target audience is likely to visit those locations before they need legal services, so it's a smart way to connect with them during the buyer's journey.

Target Your Competitor's Customers

Through geofence advertising, you can target competitor locations and put your advertisements in front of people who you know would be potential customers for your business. For example, a bar that has a great happy hour may put a geofence around other nearby bars that have popular happy hours. The bar can promote their specials to drive customers who like happy hours to their business for their next evening out.

Support Location-Based Signage

Geofencing advertising is a digital marketing tactic that can support traditional marketing tactics like physical signage. A business can place a geofence around a static sign (such as a billboard, bench advertisement, or sandwich board) and send ads to people who just saw the sign to reinforce the messaging. For example, a spa that advertises on a sign in an apartment building can also send digital ads to people who walk past the signage.

Bring Customers Back

Because geofencing targeting can advertise to customers after they leave a location, you can use this tactic as a remarketing strategy. A retailer can tag customers when they come to their store and then deliver ads two weeks later to highlight a new in-store sale that encourages customers to come back

Launch a Geofencing Campaign

Now that you can see why geofencing marketing is so powerful and have a few ideas of how you can use it for your brand, it's time to develop a strategy for your business.

To get started:

  • Identify your goals. What type of conversion are you trying to achieve? Drive new in-store customers? Drive people to your website? Increase brand awareness?
  • Define your audience. Who do you specifically want to target?
  • Identify your zones. Where does your target audience spend time? What places do they visit on their buyer's journey?
  • Design your creative. Create ads that speak directly to the audience you want to reach.
  • Launch your ads. Use a geofencing ad network or work with an agency (like MyArea Network) to launch your campaigns. 
  • Track your results. Monitor your campaigns by unique targeting zones and creative to rate performance.
  • Adjust and refine. Review your data and improve campaigns that work and stop campaigns that didn't produce optimal results.

Optimize Geofencing Advertising Campaigns

Advertising with geofencing is one of the most effective marketing tactics. Gaining the best return on investment with geofencing advertising comes from constantly optimizing the campaigns.

Ways to Optimize Geofencing

Some example ways to optimize for increasing your ROI with geofencing include:

  • Creative Messaging and Design: Utilizing multiple creative ad sets provide insight into which ad perform better.  Then serve more impressions to the ads that have a higher performance.
  • Optimize Targets Zones: Each of the target zones, the geofences you are using to target audiences, should be monitored and optimized.  Turning off zones that are bottom performers and launching new geofencing targets will help improve overall campaign performance. 
  • Optimize Frequency: Ensure you have the optimal frequency of impressions being served to an audience. Often times, increasing of budgets or optimizing the number of targets is needed to achieve the best ad frequency.
  • Optimize Ad Serving Times: Serve as during the most optimal days of the week and time of day. Review metrics to make adjustments to the campaign to increase overall geofence performance.

Key Performance Indicators to Optimize

In order to increase overall performance of geofencing campaigns, there are several key metrics to monitor and optimize.

  • Total Visit Rate (TVR): Display ads are primarily a brand awareness tactic and should be measured as such. Total visit rate is a measurement of number of visits of people that have seen the ads. If a campaign serves 250,000 impressions, and 250 people visit a store, the TVR would be 0.1%.  The higher a TVR, the more optimized the campaign is at delivering on ad spend.
  • Click Thru Rate (CTR): While we measure more for total visits with geofencing advertising campaigns, click thru rates help determine if the ads are served to an optimal audience or at the optimal time. Typically campaigns with higher CTRs generally have higher TVRs; however, not always.
  • Cost per Conversion: As the campaigns are driving conversions or store visits, the cost of these conversions help determine if the campaign is effective in driving higher ROI.  The lower the cost per acquisition, the more optimized the geofencing campaign is from a return on investment standpoint.  Total campaign cost / number of conversions will provide the cost per conversion metric.  Campaigns that are ongoing or run for longer periods of time can be further optimized as there continues to be more data available.

Does Geofencing Advertising Really Work?

Yes. Geofencing advertising does work and the data is there to prove it as well.  The reality though, it is not easy to do geofencing advertising and it should be an ongoing part of the marketing strategy so that it can be optimized consistently.

Similar to a search marketing strategy, a geofencing marketing strategy is one that should be ongoing.  It is one of the most cost effective programs to increase brand lift with your most likely to convert target audience.

Related: Drive More Customers to Your Local Business Using Addressable Geofencing

Launch a Geofencing Campaign with MyArea Network

MyArea Network knows what works in location-based marketing. We've successfully used geofence advertising to help our customers get in front of the audiences most likely to convert into leads and prospects. And, we'd love to do the same for you. 

Whether you need help launching your ads or designing your full campaign from strategy to creative to analytics, our experts are here to help. Contact us today to learn more about our geofencing services and how we've used this location-based marketing strategy to create results for other local businesses.