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When first introduced to the word geofencing, you might think of an especially large picket fence or an international sword fighting competition. Geofencing, however, is neither of these.
Delve into how to use geofencing marketing to optimize UX or simply jump to our infographic below.
Geofencing is a cutting-edge technology that leverages precise location data to establish virtual boundaries around specific physical locations. When a user crosses into these predefined boundaries, it triggers personalized notifications or messages, such as push notifications, in-app messages, or SMS texts, tailored to their location.
Consider this scenario: Imagine a customer approaching a retail store in a bustling mall. As they enter the company’s designated geofence, they receive a timely push notification offering a limited-time discount. This targeted approach to location-based marketing enables businesses to engage potential customers when they are most likely to make a purchase, whether they are near a retail outlet or inside an airport terminal.
Mobile app marketers can establish a geofence using parameters including latitude, longitude, radius, and duration within a mapping service like Google Maps.1 When creating a geofence, it’s also common to include specifications for monitoring behavior such as entering, dwelling, and exiting the geofenced area.
Once the geofence has been “built,” the app can take action when an installed device enters the perimeter, initiating a message or sequence of messages to deliver information, offers, or reminders of the business or service. When implementing a geofencing strategy, it is important to consider the time-sensitive nature of a customer’s presence within a geofenced area.
The goal of geofencing is to provide useful and valuable messages that will enhance the user’s experience in real-time. If uninterested, overwhelmed, or otherwise prompted, the user can disable location-based services or uninstall the application entirely.
One of the key advantages of geofencing is its ability to precisely target customers based on their proximity to a specific physical location. This hyper-targeted marketing tactic can significantly boost foot traffic and drive sales by enticing customers with relevant offers or promotions.
Moreover, geofencing allows businesses to gain valuable insights into customer behavior. By tracking when and where users receive messages within the geofence, companies can better understand customer receptiveness and engagement patterns. This data not only indicates when a user enters or leaves the geofenced area but also provides insights into their dwell time within the location.
Geofences are typically enabled in areas of high commercial intent such as malls, shopping centers, and airports. Retailers can utilize their geofence strategy, among other location-based marketing tactics, to send special offers to customers within the designated area and drive more traffic to their brick and mortar storefronts.
Geofencing can also be implemented within a residential neighborhood. For example, a real estate application sends neighborhood-specific information directly to a potential buyer while they are still within the area.
Marketing teams can also use geofence data to signal when a particular user visited or patronized a particular location. This data allows for relevant retargeting, known as retro-fencing.
Other use cases of geofencing are business intelligence, analytics, research, and even emergency alert systems. If a restaurant or cafe is interested to know how often customers come back and how long they stay, geofencing offers a way to track these metrics without interrupting the customer with a notification.
Don’t get confused with geofencing vs geotargeting. They’re two different location-based advertising techniques. In contrast to geofencing and its virtual “fences” around physical locations, geotargeting is the delivery of targeted ads to users based on their current location regardless of physical boundaries.
Geotargeting uses various technologies such as GPS, wifi, or IP addresses to determine a user’s location. It then enables marketers to reach a wider audience across different locations. A global ecommerce platform could use geotargeting to show country-specific offers to users who access their app from different regions.
A few more differences: geotargeting doesn’t store a user’s location data. Meanwhile geofencing does collect user location data as well as location history. While geotargeting is used by almost every kind of business. Geofencing is used by specifically event agencies, advertisers, and business owners.
Quick answer: no. While not the same, it can be easy to confuse these terms since geolocation is actually used within geofencing — it’s a geo-inception.
Geolocation is the process of identifying the geographic location of an object, such as a mobile device. Since geofences are built with the goal of utilizing mobile device geolocation data, it is a rather important term in the grand scheme of geofencing.
Geolocation returns exact longitudinal and latitudinal coordinates, often using global positioning systems (GPS). Geolocation data can also be extracted from other sources, including internet protocol (IP) address and even the Exchangeable Image File Format (EXIF), among other wireless positioning systems.2
When implemented properly, a geofencing strategy can offer a unique user experience that makes a lasting impression. With the highly targeted approach to marketing that geofencing offers, marketers can provide more relevant messages to users at the ideal time.
Many brick and mortar retail stores have struggled to see a return on investment from their digital marketing efforts. Geofencing is perhaps one of the most effective digital marketing strategies to actually bring customers through the door of a physical location.
Geofencing can also be implemented to divert potential customers of a competitor and convert them into customers. Geo-conquesting, as this is known, is an effective strategy for bringing in traffic that would otherwise be lost to a rival.
Airports
A travel app creates a geofence within the airport terminal to alert passengers with relevant gate changes, delays, and boarding passes. The relevance of these notifications and information may increase engagement with the app and relieve stress for the user.
Restaurants
A restaurant utilizes geofence targeting in their mobile strategy to message customers in the area when happy hour ends and dinner specials begin. The restaurant can also implement a retro-fencing campaign to target previous patrons of happy hour, increasing the chances of a return visit.
Theaters
The local theater employs geofencing marketing to fill empty seats by updating patrons in the area with movies starting soon and last minute offers. The theater can also geofence another movie theater in the area with special offers for customers who choose to make the trip between the two theaters.
Museums
Museums are limited by the amount of information a visitor can and will read before moving on to the next exhibit. A museum can utilize geofences to provide supplemental audio and visual information that extends beyond the physical display.
Whole Foods
The grocery chain implemented a geo-conquesting campaign to target mobile ads to users near competitor grocery stores. Geofences were also established around health-oriented stores, while not direct competitors of Whole Foods, increasing relevance. Whole Foods saw a 4.69% post-click conversion rate which is triple the industry average.
Florida Tourism
The department of tourism in Florida utilized geofencing to target local patrons for major league baseball games at home and retro-fencing to target previous attendees over the last year. The campaign saw a 0.30% click-through rate, which is more than 3X the tourism industry average CTR of 0.08%.4
Scion
The auto dealer established a geofencing campaign to target mobile users in the market for a new car. Scion combined location data with mobile search to reach the most relevant prospective customers. The geofencing methods increased engagement with the scion landing page by 120%.5
Geofencing is a mobile marketing strategy that has a real impact on the physical world. By implementing location-based proximity marketing into your mobile marketing strategy, it’s possible to see usage of your product grow in real time or increase in-person visits to your physical location. 
