How Does Geofencing Work?

Geofencing is a new technology that improves advertising. It is extremely helpful to local businesses that want to target users, a narrow audience in their geographic area.

Geofencing technology uses virtual boundaries. When potential customers get into these geographic boundaries, they get ads that are very likely to convert. It’s is available with Facebook Ads and PPC ads, so it is already for all the marketers.

But how does Geofencing work? You will discover it below. This post will answer all the questions you may have about this new technology.

What Is Geofencing Technology?

The boundaries of the businesses are around their physical locations. Then, they target customers that enter these boundaries. Geofencing technology uses signals from GPS to determine the location of a potential customer.

Geofencing marketing is a local marketing strategy that focuses on a specific target audience. Businesses set up geofences around their stores or events. For example, when a business has an offer, the potential customers that enter their boundaries get an ad about this offer.

The same applies to the events or any other promotion. The customers can also get push notifications and text messages, depending on the targeting options.

What Is A Geofence?

A geofence is not physical, but you can imagine it as a virtual fence. When businesses target an audience, they use GPS technology to create boundaries. Geofences are the term they use to describe the virtual boundaries that activate the target audience’s ads.

How Does Geofencing Target A Specific Audience?

It targets your audience in three ways once they step inside your geofence:

1. Push Notifications:

Push notifications are simple messages that appear on the screen of a smartphone. However, your customers need a mobile app even if the app is not open when entering your geofences. So, this option can work for businesses that already have an app, and enough people have downloaded it. Your marketing efforts will get paid off. 

2. Text Messages

In this method, you need to have the contact details of your target audience. When you know the phone number of your customers, you can enable your geo-fence strategy.

Your customers will receive a message that informs them about your business. You can mention new products and make special offers. These offers have more chances to get their attention and get more foot traffic because your audience is already close to your store.

3. PPC Ads

Geofencing can activate highly targeted PPC ads when potential customers are in your area and search for specific terms. They don’t get a notification but will see your ads if they use their mobile devices.

If you own a restaurant that uses this technology, you can show your ads to people who search for restaurants in your area. However, you need to bid for these ads. PPC ads show higher bidders above the organic results. If your bids are low, your target audience will not see the ads.

How Accurate Is Geofencing?

Geofencing technology uses GPS and Wi-Fi signals to determine the location of your potential customers. In most large cities, they are very accurate and can reach from 100 to 200 meters.

If you are in a location with fewer cell phone towers and Wi-Fi routers, the accuracy will be a little longer. In both cases, you can be sure that your target audience is close to your store.

How Expensive Is Geofencing Technology?

The cost of geofencing advertising depends on your business and your competition like any other advertising method. If you set up a few PPC ads, you will need to target some keywords.

These keywords have an average cost per click based on your location, competition, and your industry. If you have plenty of competitors that use geofencing, you can expect to pay more money for location based marketing.

The number of business locations can increase costs. If you target your audience in multiple locations, the total cost will go up. You will still need to choose a budget and create a strategy like most advertising campaigns.

Conclusion

Geofences work with virtual boundaries that activate text messages, PPC ads, and push notifications. The process is quite simple and effective for advertisers. It is a very targeted local marketing strategy. So, it can bring great results for your business and give you another way to promote your products.

Looking for geofencing services? We can support your business goals. Contact us today.