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What is Geofencing? Let's Locate Some Answers!

Geofencing has set the digital world ablaze with possibilities. When done properly, it can be scalable, affordable, super accurate, and even fun! Well, fun for a digital advertising nerd like myself.

What is this geofencing I speak of?

Put simply, geofencing is defining a geographical area and showing advertising to people who enter the parameters of that area. The areas being designated are called Target Zones. If you have your location services enabled on your smartphone, there’s a good chance you’ve been geofenced a time or two, whether you may have realized it or not. Some call this creepy – I call it cool!

So, what’s a good geofencing scenario?

A car dealership is a great example of a business for which it makes sense to use geofencing.  Say our client is Oak Knoll Auto Group. We put geofences around their competition’s car lots to show Oak Knoll Auto Group ads to people who are kickin’ it with the competitors. Since we know people are physically shopping for a vehicle, it makes sense to show an ad for Oak Knoll. Here’s how my nerd mind narrates for these shoppers: “Hey, I’m not seeing anything that floats my boat here – I just saw an ad on my phone for Oak Knoll that said they have a ton of inventory. Let’s pop on over there!” And a converter is born!

Are there different ways to geofence?

Oh yes! Currently, we geofence using 3 different methods.

Target Geofencing

The first and most basic geofencing strategy is described in the example above. We call this Target Geofencing. Use scenario: You’re an HVAC company wanting to target a neighborhood in which the houses are old enough to be needing a new furnace, air conditioner, or another big-ticket service. Creating awareness for your expertise in all things HVAC to people who are likely to start experiencing issues with their HVAC stuff could be part of a great overall strategy.

We would likely supplement this Target Geofencing campaign by incorporating our additional targeting tactics to make sure to also create awareness to people whose computer behavior is indicating they’re reading about, searching for, or otherwise interested in aspects of HVAC services.

Conversion Geofencing

This starts out as Target Geofencing, but we add in another layer by setting up our client’s location as a ‘conversion zone’.  This enables us to see if someone has entered a target zone, was served an ad and subsequently visited our client’s location within the next 30 days. This elevates our car dealership scenario exponentially! Using Conversion Geofencing, here’s what we can tell our car dealers:

  • How many people went to a competitor lot & were then served their ad (Campaign Users)
  • How many Campaign Users subsequently stepped onto our client’s car lot, making them Campaign Converters.
  • How many Campaign Converters were brand new or hadn’t been to our client’s lot in at least the last 30 days. This effectively weeds out the UPS guy – how cool is that?

Even in this scenario, we almost always incorporate other tactics that help identify and show client ads to people who are clearly in or about to be in the market to buy a vehicle.

Addressable Geofencing

Addressable Geofencing is setting up target zones around individual households. This strategy blows IP targeting out of the water with its accuracy and super-high match rate. Foot traffic can also be attributed from this tactic as with Conversion Geofencing. A fantastic application for Addressable Geofencing would be using it as a replacement for or supplement to a mailing list. Not only are we able to utilize a client’s own mailing list, we could also curate a lookalike list of addresses based on behavior and target those too. A great case scenario here could be a carpet & duct cleaning business with a list of addresses of high-end homes. The success of this strategy is predicated on the assumption that people with super nice homes are interested in keeping them that way.

In some cases, we can be ok with doing Addressable Geofencing as a standalone, but again it’s likely we would add in our behavior-based arsenal as well to make sure we have a robust campaign that covers every angle of identifying our target audience.

As you can see, there are a lot of possibilities with geofencing! A fantastic geofencing stunt was pulled off by Burger King in their ‘Whopper Detour’ promotion in December 2018, targeting their biggest competitor: McDonald’s. It was a great use of effective geofencing… and hilarious marketing!

While geofencing is powerful, there are two things you need to keep in mind when starting a campaign using geofencing as a tactic:  1) It doesn’t target people based on anything other than their physical location, and 2) a user needs to have their location services enabled on their phone, and use an app that our inventory is delivered on.

That’s why the most effective campaign strategies often also include other targeting tactics that take a person’s online behaviors into account. At FDS, we strive to build a customized strategy for each client that includes a full suite of targeting tactics that can include geofencing. Please contact us to discover more about how we can help you!

Contact Us | Federated Digital Solutions

Heather Riley

Written by Heather Riley

Heather Riley is Director of the Campaign Team for Federated Digital Solutions. She has been in the advertising industry for over 15 years and is fortunate enough to be able to leverage that experience into helping maximize the ROI for clients by implementing processes for campaign optimization and monitoring, as well as helping develop customized advertising strategies to help clients move forward in a way that aligns with their business goals.

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