Geofencing vs. Geotargeting: The Difference Between the Two

By Momentum |

geofencing vs geolocation

Marketing that involves geolocation is becoming more and more popular as business owners work to improve client outreach. With the help of geofencing and geotargeting, marketing is much more personalized to the customer and their current location and needs. While these terms are often (and incorrectly) used interchangeably, geofencing and geotargeting are different marketing strategies that accomplish different things. Understanding the distinction between geofencing and geotargeting can help you make smart marketing choices that result in increased business.

An Overview of Geolocation Marketing

Before delving into the details about what differentiates geofencing and geotargeting, it is important to first understand what geolocation is. Geolocation uses your mobile phone or internet-connected device to estimate your geographical location. Geolocation is a data set that utilizes information from users who opt to make online information available and real-time data about the physical location of the device being targeted. Applying this information in a b2c or b2b setting allows companies to zero in on clients that are in the area and likely interested in their product or services. Users in the area could receive a coupon or promo offer just in time to make a purchase while in the area. Geolocation is key to marketing to the right audience at the right time.

Geofencing in Action

When using geofencing, ads are triggered when users cross an imaginary boundary created by the company doing the marketing. For example, if a rideshare company wants to increase business, they can geofence the area surrounding the airport or sports stadiums or other areas that draw crowds. A geofence can be big or small depending on your marketing goals. If you want to push ads to everyone within a certain city you can do that or if your goal is more specific you can geo-fence a building or neighborhood.

Keep in mind, geofencing isn’t only good for b2c marketing. B2b geofencing is also a successful marketing strategy. Geofencing in a downtown area with a lot of restaurants would be a great way for a restaurant supply provider to show ads for items that those business owners might be in need of. A company that provides automated payroll services can use geofencing to target downtown business centers. Companies that service electronics can target a convention center where local businesses meet.

Geotargeting in Action

For those companies that want an even more specific audience, geotargeting is the next step in location-marketing. Geotargeting looks at location but also filters users by incorporating data that includes the person’s interests, behaviors, and demographics. Ads that are tailored to users who fit a specific demographic can be set to display while those people are at a specific geographic location. Geotargeting should result in a smaller, more customized group of users that will find your ads more relevant than the larger population.

Geotargeting is a valuable tool when you are experimenting with your target audience. you can vary the ad copy and images to see what attracts customers the most. This can help you develop future marketing campaigns that get results.

When to Use One or the Other

The key difference to understand when comparing geofencing and geotargeting is that geofencing sets up a boundary that triggers certain ads to display when users cross over, whereas geotargeting is more focused on a specific set of users who are in the vicinity of a geolocation point. While geotargeting can apply a more personalized message that fits the user’s potential needs, geofencing can do a better job at pointing out opportunities for those who are moving through the target area that they may not otherwise see. If you want potential clients to see your targeted message when they come into town for a conference, you would set up a geofence that triggers to send them the appropriate content once they pass that boundary. If you want to reach specific individuals who are already attending a conference and staying around for a few days, you could set up geotargeting based on the location where the conference is being held.

Practical Applications for Geofencing and Geotargeting

  • There are a lot of situations where location-based marketing technology can come in handy, but what are some of the ways that it can actually be applied?
  • When the data has been analyzed, it may become clear that certain locations are more desirable than others. You can tailor your bidding for ads to bid higher on the best spots.
  • Using location data, you can bid lower on the less desirable locations to keep a broad reach while saving money on your investment.
  • Geofencing works when users exit the perimeter as well. The user’s phone ID is stored for the next 30 days, at which point it will be stored in a retargeting folder. Until that time limit is reached, they will still be able to see the same ad from the geolocation they were previously in.
  • You could speak to users in the context of their current locations. You might, for example, run an ad telling potential clients that you are scheduling walk-in consultations at your office that is located a few blocks away from the hotel they are staying at.
  • Another feature of this technology is timing your ads to show at specific times of the day. You might, for example, want to run an ad that shows only when someone gets off work for the day and goes to run his or her errands.

A geofencing campaign can be set up in a specific neighborhood or event location, or on a smaller scale, like for a university or stadium. A geotargeting campaign could, instead of targeting everyone who enters a neighborhood, target a specific demographic of people living in that neighborhood.

B2B Applications for Geofencing and Geotargeting

A typical concept for utilizing location-based ad services is in reaching a particular consumer base in order to provide information about deals or products. However, this technology is a great way to step up b2b relations as well. One great advantage of geotargeting is the way it takes user data into account. Suppose you are a distributor who provides supplies to hotels, hospitals, restaurants, and grocery stores. You could have a geofences set up at different locations around town where conventions are held for these different customer bases. By anticipating when the hospitality convention is held versus when the conference for healthcare providers takes place, you could market the right products to the right people, exactly when they are at the most opportune location.

If you are aiming to market to specific people, you could track when they are in the town where your main office is located. While they are staying there, they would see your content describing the advantages you have to offer them. This would be the best time for them to be given that incentive, as they are not too far away from where they can make an appointment and come to talk to you in-person. By using geotargeting and geofencing, all of this and more becomes possible.

What Are Beacons and How Do They Come Into the Picture?

You may have heard of the use of beacons for location-based ad services. Beacons do not pinpoint users on the map as geolocations do. Instead, what a beacon does is produce a Bluetooth signal that detects when users are within the vicinity of the signal, but only if they are using an app that enables that signal. An example for a b2b setting would be if a beacon was set near a maintenance supply store where contractors and carpenters often go to restock on tools and materials, triggering to show them an ad for a 10% off discount on a particular line of wholesale products available for a limited time.

Can Beacons Work with Geofencing and Geotargeting?

Combining the use of beacons with a geolocation marketing strategy can provide an even stronger impact. To use the above example, a beacon outside of a maintenance supply store could be tailored to show specific ads based on whether the person entering the signal range is a painter, carpenter, plumber or something else. It is even possible to collect data on the product quantity that someone normally purchases. By utilizing the data collected on users in a geotargeting campaign, it becomes possible to refine your campaign for a b2b application, saving you the money on running ads for people who are not in your typical group of clientele.

Optimizing Effective Content for a Successful Campaign

Geolocation-based marketing services allow you to seize the moment and give them a chance to reach out. When this technology is paired with content that gets your message across and shows your expertise, new doors can be opened. Our team of experts at Momentum can provide a comprehensive digital marketing strategy that can get your company the results you need. To reach our sales team and discuss how we can help you make this happen, call 586-265-2562.

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