In today’s digital-first world, it might seem counterintuitive that physical location remains a crucial factor in marketing success. Yet the intersection of digital technology and geographic location has created powerful new opportunities for businesses to connect with their target audience. Understanding the distinction between geofencing and geotargeting can help marketers leverage these technologies effectively.
Geography Still Matters in Digital Marketing
Despite the rise of e-commerce, physical location continues to play a vital role in consumer behavior. For brick-and-mortar businesses, the ability to drive foot traffic remains essential to success. Even for purely digital businesses, geographic targeting helps control advertising spend and optimize marketing efforts by focusing on regions with the highest potential return on investment.
What is Geotargeting?
Geotargeting is simply a setting available in most digital and social ad campaigns that allows the marketer to limit the geography where the campaign is active. It directs content to consumers based on their geographic location. This can include targeting by country, state, city, zip code, or even IP address. Marketers can combine geographic data with other demographic and behavioral factors to create highly targeted campaigns. For example, a winter clothing retailer might target consumers in cold-weather states with specific product advertisements during the fall season.
Which Digital Channels Allow for Geotargeting?
Most major digital advertising platforms support geotargeting capabilities, including:
– Text ads campaigns associated with search platforms (Google, Bing)
– Social media ads platforms (Facebook, Instagram, LinkedIn)
– Display advertising campaigns
– Email marketing platforms
What is Geofencing?
Geofencing, by contrast, takes location-based marketing to a more precise level by creating a virtual boundary around a hyper-specific location. It is most often used in conjunction with mobile conquesting campaigns. The defined space could be a building, a park or a stadium—often to a level of precision of just a few meters around the perimeter of the location.
The campaigns usually break out into two main types: evergreen and event-specific. Evergreen campaign might target, say, 50 competitor locations to try to conquest their customers and get them to give your brand a try instead. Event-based campaign involve setting up a perimeter around a trade show or other event for a few days, then retargeting the users for the next 30-60 days after the event has ended.
How Does Geofencing Work?
When a mobile device enters or exits this defined space, its owner can receive your targeted ad within their phone apps or mobile browsers. They may also be retargeted with additional ad impressions later via their mobile or desktop device for days or weeks after they’ve left the geofencing target location.
Does Geofencing Work on All Mobile Devices?
Modern geofencing technology is remarkably precise, thanks to advances in GPS, cellular, and Wi-Fi positioning systems. With compatibility across 92% of smartphones, geofencing can pinpoint users’ locations within a few meters. This accuracy enables marketers to create highly targeted campaigns for specific locations like stores, events, or even competitors’ locations.
Geofencing Trackability and Metrics
Geofencing campaigns provide rich data for measuring success:
Impressions: Track how many people received your message within the geofenced area
Click-through rates: Measure engagement with your marketing messages
Conversion tracking: Monitor actions taken after receiving geofenced content
Foot traffic attribution: Connect digital marketing efforts to physical store visits
Did You Know? 5 Geofencing Facts and Statistics
* Mobile ads using geofencing achieve double the click-through rate of traditional mobile advertising, demonstrating the power of hyper-local targeting
* An impressive 77% of customers complete purchases when campaigns include clear calls-to-action, highlighting the importance of strong messaging in geofenced advertisements
* With 80% of shoppers using mobile devices while in physical stores, geofencing provides a crucial opportunity to influence purchase decisions at the point of sale
* Three out of four consumers take action after receiving a location-based message, showing the effectiveness of contextually relevant marketing
* The average consumer spends 5 hours daily on their mobile device, creating multiple opportunities for geofenced engagement
Use Cases for Geofencing
Competitor Targeting: Set up geofences around competitors’ locations to reach potential customers when they’re actively shopping in your market
Account-Based Marketing: Target specific business locations to reach decision-makers and key stakeholders within your ideal customer profile
Event Marketing: Create temporary geofences around trade shows, conferences, or other events to engage attendees with timely, relevant content
Retail Enhancement: Target shoppers within your store with special offers, product information, or loyalty rewards to enhance the shopping experience
Conclusion
While geotargeting and geofencing share some common elements, they serve different purposes in a comprehensive location-based marketing strategy. Geotargeting provides broad geographic segmentation for your digital and email marketing efforts, while geofencing offers precise, real-time engagement opportunities by targeting hyper-specific locations. Understanding and implementing both approaches can significantly enhance your marketing effectiveness and drive better results for your business.
As mobile device usage continues to grow and location-based technology becomes more sophisticated, the opportunities for geographic-based digital marketing will only expand. Businesses that master these tools now will be well-positioned to connect with their audiences in increasingly relevant and meaningful ways.
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