Geofencing and How It Relates To Your Business

Geofencing allows businesses and organizations to send ads to users within a specified geographical area. It is widely utilized as a marketing tool to directly engage potential customers in a specified local area. Because local businesses are typically less well known by consumers than big brands, geofencing is a particularly useful tool to help grow a local business.

How Does Geofencing Work?

Geofencing allows us to draw a virtual perimeter around actual geographic places. This geographic “fencing” can be custom drawn so that it is around the perimeter of a business or within a preset square mile perimeter of a business, landmark or location. This technology uses location-based services to track when someone enters or exits a specific perimeter you have set for your geofencing campaign. This, in turn, triggers an ad to the user’s device.

Click-Through Rates Are Higher

Geofencing click-through rates are 2x times higher than other forms of mobile marketing. This means that geofencing ads are proven to increase the amount of people who actually click on your advertisement. Because big brand-name businesses have an advantage of being well-known to consumers, geofencing can provide a significant advantage to lesser known businesses and organizations looking to increase consumer awareness.

Cost Efficiency

Not only does geofencing provide a business with near perfect ad timing, but it is also an incredibly cost efficient advertising model. Most local businesses don’t have a huge budget for marketing and advertising, yet still need these tools in order to grow their business. Using geofencing allows local businesses to directly compete with big businesses for a fraction of the price. Whatever the budget is, there is a wide range of options that any local business can afford.

Geofencing Targeting ExampleCreative Strategies

Here’s the trick: you are not limited to using your own location when setting up a geofencing area.

This allows local businesses and organizations to target users in creative locations that relate to their business. For example, a local co-working location could setup geofencing around specific hotels which could trigger ads for the co-work space when business travelers are staying and need a short-term location to work. Additionally, you could even set up a geofencing area around your competitor’s business. When users move near your competitor, they’ll receive your ad, which could drive traffic away from your competitor and directly towards your own business.

Because geofencing possibilities are endless, small businesses can get creative to open up a wealth of new advertising opportunities.

Geofencing Advertising Costs

Geofencing ads don’t cost anything more than other PPC campaigns. Bid pricing depends on the competition and targeting options near the locations you’re targeting or “geofencing”.

Geofencing advertising techniques can help organizations to individually target users in strategic geographical areas of interest. Geofencing can be a beneficial advertising method for local businesses looking to increase customer awareness because of ad budget flexibility and precise user targeting.