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What is geofencing?

What is geofencing? -Types, Functionality, and Applications

Ever-present smartphones are constantly tracking our location data, turning us into walking beacons. This has led to the development of geofencing technology, allowing businesses to create virtual boundaries and target specific groups within specific zones. This technology, similar to drawing an invisible fence around a store or event, sends personalized messages only to those crossing it.

What is geofencing?

Geofencing is a marketing strategy that uses GPS technology to target people based on their location. Businesses create virtual boundaries around specific areas, like their store or park, using Wi-Fi or cellular data. When a smartphone crosses these boundaries, it triggers a message or action, such as a discount offer or an ad. This is like drawing a digital fence around a place, prompting something on the device. The goal is to reach people when they are most likely to be interested, based on their current location. This clever marketing tactic allows businesses to reach people when they are most likely to be interested.

How Does Geofencing Work?

Building the fence: Businesses define a virtual area using GPS, Wi-Fi, or cellular data. This could be around a store, an event, a rival competitor’s location, or even your own neighborhood.

The trigger: When your phone enters or exits the fence, it acts like a tripwire, sending a signal to the business.

The message: Based on that signal, the business can send you various things, like:

Targeted ads: Imagine walking past a sporting goods store and getting a notification about a basketball shoe sale.

Special offers: A nearby coffee shop might send you a coupon for a latte when you’re close by.

Automated greetings: Entering a store could trigger a welcome message on your phone, making you feel valued.

Geofencing is a powerful marketing tool that can be utilized in various scenarios, including event marketing, competitor conquesting, real estate, and restaurant marketing. By setting up geofences around competitors’ locations, businesses can create awareness and potentially lead to sales. This approach can also be used in real estate to send relevant information and offers to potential buyers or renters. In addition, geofencing can be used to send special offers to potential customers within a specific vicinity, attracting them to dine at the right time.

Different types of geofences

1. Active vs. Passive:

Active Geofences: These require users to opt-in to location services and have a specific app open. Think of entering a museum and receiving an audio guide notification because you have the museum app active.

Passive Geofences: These work silently in the background, leveraging Wi-Fi and cellular data. Imagine walking past a clothing store and getting a text message about a sale, even without having their app open.

2. Shape and Size:

Circular Geofences: Simple circles drawn around a central point, like a store or park. Think of walking into the “discount zone” around a supermarket.

Polygonal Geofences: More complex shapes defined by multiple points, allowing for precise targeting. Imagine receiving a notification about a specific product aisle within a large store.

Linear Geofences: Defined along paths or routes, often used for tracking deliveries or monitoring restricted areas. Imagine getting an alert when your pizza delivery enters your neighborhood.

3. Trigger-based:

Entry/Exit Triggers: Actions happen when you enter or leave the geofence, like receiving a welcome message upon entering a store or a goodbye coupon upon leaving.

Time-based Triggers: Actions are triggered based on specific times within the geofence, like a lunchtime discount notification only when you’re near a restaurant during lunch hours.

Action-based Triggers: Triggers based on specific actions within the geofence, like receiving a reminder to buy milk when you enter a grocery store.

What are some benefits of geofencing?

Geofencing is a powerful marketing tool that allows businesses to target prospects with engaging messages and attractive offers. This method enhances customer engagement by targeting specific demographics within a defined geographical area, resulting in improved engagement numbers and ad spend effectiveness. 

Geofencing also provides valuable data for marketers, such as foot traffic, stay durations, conversions, and online activities, which can be combined with user behaviour to personalize campaigns and improve user experiences. 

It also enables businesses to create omnichannel marketing campaigns, further boosting sales and revenues. Geofencing’s mobile-centric nature allows companies to deploy it on various mobile devices for various applications, including marketing, advertising, tracking, security management, and law enforcement.

Geomarketing Solutions: How To Run Targeted Messaging

Know Your Local Audience: Instead of blasting out messages to everyone nearby, take time to understand who actually lives around your business. This means looking into demographics to tailor your messages effectively.

Keep Your Geofence Small: Don’t cast too wide a net. Stick to a small area around your business, like a four to five-minute walk or drive. This ensures you’re targeting people who are actually likely to be interested.

Timing Matters: Sending out messages at the right time is key. Use data to understand when people are most likely to be around and receptive to your offers. Consider seasonal trends and adjust your messaging accordingly.

Clear Call to Action: Keep your messages simple and to the point. Don’t clutter them with unnecessary words. Be clear about what you want people to do, whether it’s trying a new product or taking advantage of a limited-time offer. Avoid sounding pushy or spammy; instead, make your offers inviting and approachable.

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1. What is the function of geofencing?

With geofencing, users can be aware of both their current location and their proximity to potentially interesting sites. A location of interest is marked by providing its latitude and longitude. You add a radius to change the proximity for that particular site.

2. Which geofencing app is in use?

Your privacy-conscious location monitoring app is called Locative. Use Geofences or Beacons to set up places, and send webhooks (HTTP requests) each time you enter or exit a space. You’ll be notified whether a location event is successful or unsuccessful as soon as it is triggered.

3. What are the two types of geofencing?

Active and passive geofencing are the two main varieties. For geofencing to be active, the user’s mobile app must be open. Usually, this software utilizes the user’s GPS service. For example, operators using active geofencing can send customized messages or push advertisements to a customer directly.

4. How do you block geofencing?

Most geofencing instances can be avoided by users by disabling location services on their mobile devices. Since most geofences are connected to mobile apps, the best protection against most geofences is to either disable location services on the device or restrict location rights for certain apps.

5. How much does geofencing cost?

Geofencing costs between $5 to $8.50 per thousand ads shown (CPM). Geofencing campaign pricing starts at $1,495/month.