What Exactly Is Geo-Fencing And How Can It Help My Business?

While it may sound like technological gibberish, geo-fencing is the process of stratifying who sees your marketing through location-based targeting. While it sounds reasonable that you want as many people to see your marketing content all the time, it’s not practical. The reasoning is simple: not everyone is going to be interested in your product. If I make a living selling artisanal iced coffee in Arizona, I wouldn’t want to get my marketing message across to people living outside of Arizona. In fact, I’d want to exclude them because marketing costs money; I would be paying a good amount of money to get in front of people who can’t buy my products. This is even true for some people in Arizona. If I were to own this artisanal coffee shop in North Phoenix, I wouldn’t want to get my message across to people stopping by Sedona or Flagstaff. On the flip side, if a rose enthusiast (I’m sure they’re out there) happened to be literally walking across the street from my shop, I would want to especially target them to enter my store. This is the idea behind geo-fencing: hyper-local mobile targeting.

This is exactly what geo-fencing aims to do on the digital landscape. By designating various locations by GPS or RFD, you are able to deliver hyper-local mobile targeting or computer marketing messages tailored to your market. Whether it be a mobile alert of new deals, text message triggers, or even pushing advertisements on social media, geo-fencing gets your content in front of the consumers that can best respond to your content and brand features. It is quite literally the process of fencing off areas for your marketing content to be delivered in.

It doesn’t have to just be your business either. If you compete in a saturated market, you have the opportunity to steal potential customers away from your competitors through the use of location-based targeting. Let’s say after extensive research, our rose enthusiast happened to find a bouquet of roses for $25 at Roses Roses Roses 3-4 blocks down the street. If I set a geo-fence a block around their business, I could set off a coupon to show on their Twitter feed for a bouquet of roses for $15 at my business with directions to my location. $10 cheaper for better roses? That’s a steal.

Geo-Fencing VS Geo-Targeting

They are the same thing, right? The two deliver on similar core principles. They operate by allowing you to configure the location and approximate radius of your ad delivery strategy and deliver location-based targeting to offer ads that are optimal for your prospective customers. The main difference between geo fencing vs geo-targeting is that geo-targeting narrows in on your audience and target market more. It is a form of hyper-local mobile targeting where consumers receive advertisements if they meet certain targeting criteria.

When considering to choose between geo-fencing vs geo-targeting, you have to consider the strategy you want to employ. Geo-fencing is a great way to target everyone who passes within a certain radius. This is ideal if the people passing by are roughly similar in their needs and ability to engage with your brand. In other words, geo-fencing is a location-based targeting method that allows you to tighten and narrow in on the location. On the other hand, geo-targeting affords you the opportunity to offer hyper-local mobile targeting by identifying which consumers match what your brand is looking for and reaches out to them. While this is great for reaching out to ideal prospective customers, this can raise an issue with cutting out consumers you didn’t know you were reaching out to or could reach out to. Additionally, because you are cutting down the audience size, you would aim to increase the size of your geo-targeting fence to make up for the loss. This, however, broadens the minimum size of your geo-fence, resulting in less specified and less narrowed decisions on your marketing efforts. While they each have benefits and drawbacks, they are both useful for different strategies and should be considered in your marketing strategies.

For the sake of argument, however, let’s further explore the intricacies of geo-fencing as it pertains to hyper-local mobile targeting and location-based targeting.

Consumer Perceptions

Back in 2017, research indicated that 53% of respondents had a positive experience with geo-fencing content. And when that same study was conducted in 2018, the percentage rose 19% to 72% of consumers with a positive experience with geo-fencing. Compare that to those who have had a negative experience (8%), it is clear that geo-fencing is growing to become a cornerstone of digital marketing, to the point where this form of hyper-local mobile targeting is welcomed in cases where consumers perceive benefits from the marketing efforts. As such, it is not enough to simply display located-based targeting ads to consumers. There has to be a benefit to the ads for the prospective customer.

With 53% of respondents saying that the mobile alerts have been sometimes proven useful, there is a growing market of consumers more than willing to allow limited tracking and the use of geo-fence for the sake of convenience. The operative word, however, is convenience. If you are looking to pursue hyper-local mobile marketing, you need to consider how your location-based targeting efforts aim to improve the lives of your customers.

Geo-Fencing Benefits

Geo-fencing specifically designates who you talk to and how. As such, your communication methods are better customized on a person-by-person basis. As such, a benefit of geo-fencing is tailored language that better resonates with your consumer.

Additionally, you have the benefit of cutting through the noise. If notifications are enabled on the customer side, you have the ability to send consumers specialized emails, text alerts, or app alerts that they directly see and interact with. As such, hyper-local mobile targeting gets in front of your customers in one of the most organic ways possible.

Because everything is mobile and digital, your ability to track consumer behavior and generate analytic reports offer you better insight into how your consumers interact with your content. Remember there may always be a disconnect between what you want to tell consumers, and how they react to it. Better analytics from geo-fencing can drive insights to better adapt your message delivery to better tone your content.

Finally, you achieve higher sales and profits. Local optimization (which occurs when you set geo-fences to better prioritize your content to the consumer over other competitors during a search query) wins you customers. Plain and simple. It makes sense that if you deliver what your customers want when they want it, a better relationship is built between you and your customers. Hyper-local mobile targeting or computer targeting via geo-fencing and setting geo-fences is the means to get there.

Geo-Fencing Limitations

As much as we’d love for this to be the ultimate solution to all your problems, that’s not reality. One of the biggest limitations is the late adopters: the laggards. Even now while a lot of communication is shifting to digital, there are always some bound to not buy into the digital landscape. And that’s just for getting on the platforms. Imagine the impossibility of getting those same people to allow for app tracking.

While becoming more popular both in practice and in market outreach, geo-fencing suffers from people restricting app access at all times. Sometimes these issues are not rooted in privacy but perceived concerns with battery, cellular data, and more. Without authorized tracking, you may not be able to reach everyone you’d like to with just geo-fencing. As such, the use of hyper-local mobile targeting from setting up geo-fences should not be a cornerstone of your strategy but rather one of many strategies.

Additionally, this doesn’t solve the issue with message resonance. If you’re not saying the right things and offering the right services for your consumers, it doesn’t matter how impressive the geo-fences you set up are. Geo-fencing in-and-of-itself is not your marketing content. It is one of many ways to get your message delivered, whether or not your message is good. Therefore, it’s important to always remember to prioritize what it is you want to get across, what you want to say when your message is delivered, and then finally consider where you want your message delivered.