Businesses always look for innovative ways to connect with customers, bolster brand recognition, and drive sales. In digital marketing, geotargeting and geofencing are powerful tools to achieve these objectives by tailoring advertisements to specific customers based on location. For marketers, comprehending these advertising strategies can prove instrumental in making informed decisions that yield leads and increased sales.
In this article, we demystify the concepts of geofencing and geotargeting, highlighting their distinctions, suggesting scenarios for their application, and outlining the specific marketing advantages each brings.
Getting familiar with your audience is the cornerstone of crafting effective ad campaigns. Knowing potential customers' age, educational background, interests, preferred locales, and related details often distinguishes between success and less-than-desired outcomes. Knowing this, marketers can customize their messaging to resonate with the intended recipients.
A method gaining traction for achieving this level of personalization is leveraging location data, allowing ads to be displayed to individuals within specific geographical areas. Though often interchangeably and inaccurately referred to as geotargeting or geofencing, these two terms signify distinct concepts.
Let's dive right in to understand these two techniques better.
Geotargeting involves customizing advertisements for a specific audience based on their geographic location and other relevant criteria such as demographics, interests, and behavior.
Imagine delivering tailored content exclusively to users who meet specific criteria within a designated geographical zone. This is the essence of geotargeting. This approach relies on inputting precise location parameters into your ad platform, allowing you to fine-tune your audience based on location and other relevant factors.
Imagine a beer brand that wants to increase sales of its craft IPAs at the Zurich Beer Festival. The beer brand can use geotargeting to target adult festival goers aged 21–40 who have a history of buying craft beer or going to similar beer festivals. The beer brand can show them customized content, such as special offers or deals, only to this specific audience within the festival’s location. This way, the beer brand can appeal to IPA lovers and boost sales of its craft beers during the event.
To ensure the effectiveness of your geotargeting campaigns, consider the following practical tips:
Now that we’ve seen what geotargeting is and how it works, let’s explore some of its advantages and disadvantages.
While geofencing and geotargeting might often appear interchangeable, the reality is that they have distinct attributes that set them apart. Geofencing falls under the umbrella of geotargeting but distinguishes itself through a few key differences.
Geofencing refers to a particular kind of location-based advertising where you can target all users within a specific zone by defining a virtual geographic boundary, or "fence," around it.
This targeting method doesn't necessarily require additional criteria, though you can refine your audience further. As users cross into the predetermined area, your ads are triggered automatically.
Geofencing can continue to work even after users leave the geofenced area, a practice known as retargeting.
To make the most of geofencing, consider these strategies:
Another example is Dunkin', which utilized personalized geo-filters on Snapchat, available only in-store or via code scan, leading to a tenfold increase in their Snapchat followers on US National Donut Day.
Geofencing offers several advantages but also some challenges for businesses.
Whole Foods implemented geofencing and geo-conquesting to target customers near their or their competitors' stores. They offered special discounts to entice customers to visit Whole Foods. The campaign yielded a 4.69% post-click conversion rate, more than three times the national average.
Uber utilizes geofencing to connect drivers with potential customers. By creating virtual boundaries around airports, nightclubs, and hotels, Uber notifies users of nearby drivers upon landing, resulting in increased rides and earnings.
A prime example of successful geotargeting comes from the clothing brand UNIQLO. They utilized geotargeting to promote their new AIRism line of breathable fabrics. By identifying areas with high temperatures and humidity, they targeted nearby customers with ads highlighting the benefits of AIRism. The results? A 25% increase in sales, a 35% increase in in-store visits, and a 15% boost in brand awareness.
Similarly, Hyundai employed geotargeting to launch its IONIQ 5 electric vehicle. By segmenting customers based on driving habits, preferences, and environmental awareness, they delivered personalized ads showcasing the features of the IONIQ 5. With customized geotargeting, they have a 30% increase in leads, 20% higher conversions, and a 10% rise in customer satisfaction.
As we've seen, while geotargeting and geofencing share certain commonalities, they diverge fundamentally. Geotargeting focuses on specific customer attributes within a defined area. Geofencing targets all users within a predetermined virtual boundary, irrespective of behavioral data. Mastering the intricacies of both tools empowers businesses to forge potent marketing strategies that authentically connect with their audience, resulting in heightened engagement, amplified sales, and strengthened brand loyalty. By strategically using these techniques, brands can stay ahead of the competition, ensuring their messages reach the right people at the right time and place.
