How Geofencing Marketing Can Help Your Business (Even if Your Business is Online)

When you are trying to build an audience, there is nothing more powerful than knowing who is already interested in your product or service. And while pixeling your website visitors is a really great way to track your online fans, there is a whole other segment of your potential customers you may be missing out on.

The ones in the real world.

We talk a lot about the boom in online spending. But in 2019, 90% of retail purchases were still being made in-person in physical stores. And for context, that’s 90% of $6 trillion in retail spending. So by ignoring all of those “real world” buyers, you are missing out on a huge market share.

But clearly, nobody is going to stand outside relevant stores counting the people who go in and out. That’s archaic, and creepy. We let technology take care of that for us. The best way to reach those people is by using geofencing marketing.

To break down why this strategy is so valuable, we talked to Dan Dillon, VP of marketing at Reveal Mobile, a company that specializes in results-driven geofencing marketing. He gave us a breakdown of what geofencing marketing is and how you can benefit from it, even if you are an online business. And we are sharing his insights with you here today.

What is Geofencing Marketing?

Geofencing may sound like a high-tech, overly complicated replacement to building audiences online, but it’s actually very straightforward (and it can give you unique insights that Facebook may leave out).

Here’s how it works. Marketers draw a digital perimeter around the buildings of a brick-and-mortar business like Starbucks, Chick-fil-A, Gap—it could be any place. Even Walmart parking lots. Then, whenever someone crosses the “fence,” they become part of a privacy-compliant audience you are able to target with ads wherever you advertise.

It’s important to remember that this is different from geotargeting, which sends people targeted ads based on their current location. This is not messaging people in store. This is messaging people who have been in a specific store so that you can get them to take a desired action (we will cover some of those later).

How is Geofencing Marketing Better Than Traditional Ad Targeting?

The biggest difference is intent. By targeting people who have already shown interest by visiting a retail location, you know that these are high intent buyers, and are already warmed up to the purchase. They don’t need nearly as much convincing as a cold audience.

On top of that, you know that they have enough interest to actually go somewhere in person rather than just browsing online. This comes back to having an audience that is high intent.

And when you target a high intent, highly-qualified audience, you are way more likely to get better ROI and higher conversion rates.

In fact, Dan’s company did a study on how location-based audiences perform. Location-based audiences take action on ads at an average of 7.5 percent. By comparison, the average CTR for Facebook ads is around one percent. Improving your success rate 750% is a clear win.

The other advantage of geofencing marketing is that certain tools let you look back at historical data, giving you access to audiences who visited locations in the past. This is super useful this year in particular, when there are fewer safe ways to shop in stores. If you look through the shopping data of 2019, you can get a good idea of who is shopping where. If someone liked to go to boutique clothing stores a year ago, chances are good that they still like those kinds of products. Same idea for the holidays. Shoppers visit certain stores for Christmas, Valentine’s Day, Mother’s Day, and all the rest, so you can get high-intent audiences for any kind of campaign. More on that later in the post.

You also aren’t limited in location. For physical stores, you will want to target people close enough to you to visit regularly. But for anyone with an online presence, the ability to see the shopping habits of anyone, anywhere, is unprecedented. You can also geofence your own brick-and-mortar stores and then advertise to those audiences, promoting your ecommerce store.

And while you won’t have any purchase data on these audiences, you will be able to see when people return to a store, and how frequently. That means your leads are qualifying themselves. And giving you way more insights on their habits.

What Can You Do with Your Geofence Targeted List?

Once you have your location-based audience, you then get to use them like you would any other lead list. But you aren’t limited to just using them within one single platform. You can take them to Facebook, Instagram, or anywhere that you run ads.

And if you have a physical store you are geofencing, you can know who saw your ad and then came back to the store. Not only is the sort of precise attribution hugely valuable, this will help you test which ads are more effective, and then use those with a broader audience.

You can also take your geotargeted list and build a lookalike audience from it, targeting other people who have similar online behaviors to those with your ideal in-person shopping behaviors. This is a great way to expand your audience, particularly in times when in-person shopping numbers may be artificially low.  

And not only does this help you know who you should be targeting, but this helps you know who you shouldn’t waste your time and money on.

Let’s say you are an online home goods retailer. You have a list of people who have gone to furniture stores recently. And while you don’t know if they have actually purchased furniture, you know they are in the market and may have already bought something. So it would probably be in the interest of your ad cost not to heavily target those people.

But geofencing lets you get creative. You could geofence U-Haul rental truck locations, creating an audience of people who are moving and likely in-market for new furniture. However you want to find your best audience, geofencing will help you get there.

Tips for the Holidays

There is never a more important time to make sure that your ad targeting is right than before the holiday season. Remember that $6 trillion in retail spending? An estimated $1 trillion of that was spent over the holidays. Holiday spending has been growing every year, and it is only expected to continue.

So here are a few tips for how you can use geo-fencing to your best advantage this holiday season.

1. Narrow your search parameters—by making a really specific geofence, you make sure that the MOST qualified shoppers are the ones seeing your ads. If you sell a high-end sports massager, you don’t want to just target people going to a sporting goods store. You want to target people who regularly visit specialty running and cycling stores. This will make your advertising cheaper and more effective.
2. Target other members of the household—once you have data on the shopping habits of your target audience, send ads not only to them, but to the other members of their households. Make sure to frame your ads around gift giving, and you’ll be sure to make some conversions.
3. Go back to last year’s shoppers—instead of only focusing on recent store visitors, extend your timing parameters to last year’s holiday season. You may get more people who were buying gifts for their friends and family, but who may not have been to the store for themselves recently.

Wrap Up

The ability to track in-person consumer shopping behavior as well as online behavior has huge implications for the success of your marketing.

And it may just be the best next step for your business if you want to get better quality leads. So while you’re building out your marketing strategy, especially if it’s for the rapidly approaching holiday season, make sure you’re considering geofencing marketing as a potential option.

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