Targeting High-Traffic Areas with Geo-Fencing

Friday, September 23, 2016

Geo-fencing is a hyper-localized digital marketing method that can use a combination of location and timing to execute highly successful campaigns that generate more foot traffic. Here’s how you can effectively employ geo-fencing in your advertising.  

Advertising a business can be a shot in the dark: even if the advertiser is getting a lot of impressions, they don’t know how much traffic their ads will generate. This can present challenges for local businesses that depend on foot traffic in their immediate vicinity.

Of all the local marketing methods out there, geo-fencing could be the most effective strategy: click-through rates can be up to 70% higher through geo-fencing campaigns than standard pay-per-click ads1. Unlike simply using local SEO and techniques like contextual and behavioral targeting in PPC ad campaigns, geo-fencing uses GPS technology to set a boundary in a small area. The advertiser then uses a combination of push notifications and displaying ads on prospects’ mobile devices that wouldn’t make sense outside of the boundary.

Timing can be a crucial factor in successful geo-fencing campaigns. For instance, if a restaurant is near a major convention center, they can set a boundary around the immediate area where convention attendees are likely to be hanging around looking for a place to eat. Nearby phones then display ads specially designed for this demographic or fine-tuned for the demographics of each individual convention. Convention attendees and anyone who just walks past the convention center will receive those push notifications and see the ads, and it’s an opportunity to make those ads as targeted as possible to these groups.

Large gatherings of people like concerts and sporting events also present a gold mine of opportunities for advertisers effectively using geo-fencing. A campaign can be just one day for a concert or perhaps a whole week, month, or season for a museum exhibit or seasonal local attraction. While many businesses can only utilize geo-fencing during a special event, there are some that can reap the rewards of geo-fencing year-round, such as businesses located near major tourist attractions or other perpetually high-traffic areas.

The boundary doesn’t have to be set in a neighborhood, it can be as localized as just one street or a few storefronts. The immediate surroundings of a stadium or event venue or just one block can be efficient areas to put up a geo-fence.

What Sets Geo-Fencing Apart From Geo-Targeting

One drawback to geo-fencing is that unlike geo-targeting, it doesn’t employ demographic or behavioral data like interests and past purchases. These simple limitations make it impossible to provide the personalization that geo-targeted efforts are likely to have. However, the hyper-localized aspect makes it ideal for businesses that can take advantage of crowded events and high-traffic areas2.

To turn this drawback into a positive thing, geo-fencing can be easier to implement than geo-targeting and be an excellent opportunity for the advertiser to scope out the demand for their product. Since geo-fencing also relies purely on location and no other data that geo-targeting is able to pick up and use, it’s also a very efficient method for discerning which demographics to target if the advertiser hasn’t firmed up this aspect of their marketing strategy yet.

Geo-fencing can efficiently make use of local attractions, timely events, and temporary large crowds for campaigns lasting as short as one day or as long as year-round. While not as highly-targeted as geo-targeting, geo-fencing is a versatile tool for validating local demand of a product or service and determining which demographics to market to. Geo-fencing has both inbound and outbound marketing aspects using a combination of display ads and push notifications.