What is geofencing?
Geo-fencing (geofencing) uses the global positioning system (GPS) or radio frequency identification (RFID) to create a virtual geographic boundary, enabling software to trigger a response when a mobile device enters or leaves a particular area. Geofencing advertising uses the ‘boundary’ as a trigger for delivering an ad message.
Geofences can be configured in multiple ways. They can prompt mobile push notifications, trigger text messages or alerts, deliver targeted ads on social media, or deliver location-based marketing data. For example, a local cafe might send a message offering a half-priced beverage to a customer as soon as they enter a previously demarcated neighborhood.
Setting boundaries with geofencing
To use geofencing, a virtual boundary must first be drawn around a specified location in GPS- or RFID-enabled software. This might be something simple like a square drawn one block around a storefront on Google Maps. This can be pre-specified using APIs when developers create mobile apps.
The geofence will trigger a response when a device using the app enters or exits that area. The geographic area of the boundary itself can also be altered at any time. You might do this in order to focus on a new location, take advantage of a changing neighborhood demographic, or simply expand the reach of a successful campaign.
A geofence can also be set up by mobile phone users. This is common with apps that use “if this, then that” commands where an app is programmed to trigger an action based off another action. For example, “If I’m driving up to my garage, open it up.”
Geofencing platforms have utility beyond smartphones
Geofencing isn’t just for mobile apps. It is often used to control and track vehicles. Nearly every commercial drone is pre-programmed with geofencing that protects locations like airports. Some can actually disable the device when it gets close to restricted airspace.
Pet owners are also able to use geofencing effectively. GPS enabled collars can alert owners when their pets leave their property (or enter somewhere they aren’t supposed to be). Farmers are using similar systems to help monitor the behavior of grazing animals.
Geofencing advertising is a smart tool for business
With the ubiquity of mobile devices, geofencing has become a standard practice for many businesses. Once a geographic area has been defined, the marketing opportunities are almost endless. It is especially popular in social media. Businesses can create extremely relevant and targeted messages for customers in a particular area.
Creative uses of geofence-based marketing
It’s also possible to set up geofences around competition, so when customers approach the boundary they get a push notification with a compelling offer to visit. Imagine the possibilities for competing restaurants set up across the street from each other. A timely prompt for a free appetizer or beverage could swing the decision.
There are some cautions, especially when it comes to privacy. Massachusetts was one of the first states to pass a consumer protection law that objected to the use of location-based advertising. However, it doesn’t seem that geofencing will lose its popularity any time soon. According to BusinessWire, the geofencing market is expected to grow 24% over the next five years.