Is Geofencing Marketing Effective?
Geofencing in your app can increase brand loyalty, in-store visits, and repeat business through precise audience targeting.
One morning, as you walk past your neighborhood coffee shop, a message appears on your phone. Your favorite seasonal beverage is now available! A 20% discount coupon is immediately waiting for you.
This is an example of geofencing marketing, often called proximity marketing or location-based marketing. It can work incredibly effectively, as evidenced by the expansion of the geofencing business, which is expected to increase from $1.87 billion to approximately $9.6 billion by 2032. Is geofencing marketing genuinely effective? We’ll go over the most essential use cases, benefits, and data points to assist answer that question.
What is Geofencing Marketing vs Geo-targeted Advertising?
Before we go any further, let’s define geofencing marketing. Geofencing marketing differs from geolocation advertising, despite its similarities. Here’s a brief overview of each:
Geolocation (or geo-targeted) advertising is the practice of sending targeted ads to potential customers based on their smartphone’s location (usually via GPS, IP address, or cell tower signals).
Geofencing marketing is defining virtual boundaries around stores or other points of interest and then embedding location technology to send push notifications, in-app messages, or SMS based on the user’s proximity.
Starbucks used geofencing to send personalized app notifications, offering consumers their favorite drinks when they were near a location.
According to a survey conducted by Upland Software, 42% of mobile device users spend more time on an app that knows their location and uses it for content or push notifications. Not only will you spend more time with the software, but there are other advantages. According to the same study, 36% of shoppers reported that a location-based push notification influenced their in-store purchase.
Does Geofence Marketing Really Get Results for Audience Targeting?
Various strategies will produce various results. For example, integrating location to provide a personalized experience helps strengthen brand ties. According to Adobe’s 2022 Trust Report, 72% of consumers believe relevant content delivered at the correct time and location increases their trust.
Personalization
Advertising is everywhere, and consumers frequently tune it out. But adding a personal touch alters the situation. According to one survey, 90% of customers find marketing personalization intriguing. According to the same report, 80% of people prefer to buy from a brand that provides a personalized experience. Geofencing enables you to create that type of consumer experience.
Understanding a customer’s preferences and tailoring them to their specific location is the ideal technique for marketers to provide compelling messaging. Alternatively, brands can filter messages based on physical location to keep them relevant; for example, if Jayden is out of town, sending a reminder to visit his local coffee shop would be a negative customized experience. Location makes it simple to avoid blunders like that.
Gathering first-party data
A geofencing campaign can provide valuable first-party data that no other source can match. It displays how frequently mobile users visit their preferred destinations, the direction they go from, and the length of their stay. It’s simple to combine such data with purchasing habits to build a comprehensive client profile. According to eMarketer, 65% of Canadian marketers think that mapping the offline customer experience gives actionable information about customer behavior, intent, and brand affinity.
In other words, location data is required for an effective mobile marketing approach!
Some organizations purchase target customer data from third-party sources. However, this typically makes people uneasy. According to a 2021 study, 70% of consumers prefer personalized experiences as long as firms use first-party data rather than purchasing it.
Boosting in-store traffic
While foot traffic has recovered since the epidemic, brick-and-mortar retailers continue to compete with e-commerce. What are the most effective techniques to stimulate in-store visits? Raydiant discovered some solutions in the 2022 State of Consumer Behavior survey, which highlighted the top three things people want retailers to offer:
- Fun experiences
- exclusive products
- Exclusive discounts
You can accomplish all of these tasks with geofencing. It’s simple to construct a geofenced area and give special discounts to passersby. If each store sells distinct goods (coffee mugs, stickers), use the location to assist visitors in collecting them all. Stores can also use location to create exciting, gamified experiences that attract repeat customers.