Have you ever wondered why you see ads for businesses near you when you're out and about? Location-based marketing is becoming increasingly popular, and for good reason - leveraging location to connect with customers can provide major benefits.
In this post, we’ll explore the power of location-based marketing and clarify the difference between two key tactics: geotargeting and geofencing.
With consumers constantly on mobile devices, location data provides valuable insight into their habits and movements. Strategic use of this data enables more relevant, timely outreach. Both methods provide key benefits for companies, especially manufacturers who sell through large dealer and retailer networks. For manufacturers, location-based marketing can increase engagement with local dealers and raise awareness of new products and promotions. For dealer network owners, it supports connecting with customers when they are nearby and most receptive to visiting your stores.
Geotargeting is a digital marketing technique that allows businesses to target their ads and content based on the geographic location of users. With geotargeting, businesses can focus their marketing efforts on specific regions, cities, zip codes, or neighborhoods. It works by using information such as GPS location and zip code to determine these locations. This allows marketers to serve localized ads and content to users based on their geographic region
For example, if you search for a hardware store, your search results will be based on your location. Most likely you will see a sponsored ad as your first result and because you are looking for a hardware store near you, this ad will most likely be successful. Here is an example of how that search result may look:
Overall, geotargeting gives businesses the ability to adjust their online marketing to be more relevant on a geographic basis. This can help increase engagement and conversions from localized audiences.
Geofencing is a location-based marketing tactic that allows companies to create virtual boundaries around specific geographic areas like stores, events, or neighborhoods. When a consumer enters or exits one of these designated zones with a mobile device, geofencing technology can trigger various actions like sending targeted messages, offering discounts, collecting data, and more. The goal is to engage with users based on their physical location
Geofencing relies on technologies like GPS, RFID, WiFi, and cellular data to accurately detect when a mobile device crosses into or out of a defined area. The virtual perimeters can be as large or small as a business wants, ranging from an entire city to specific aisles in a store. This allows for very precise and personalized marketing efforts.
As an example, imagine a coffee shop utilizing geofencing to establish a virtual boundary just 10 feet from their entrance. When a customer approaches this area, a notification could be seamlessly delivered to their mobile device offering a special discount. Perhaps the customer hadn't even considered grabbing a coffee, but this timely incentive might just be the nudge they need to step inside and make a purchase.
Geotargeting and geofencing are similar in that they both utilize location data, but they have some key differences in how they function.
Geotargeting involves targeting ads based on a user's general location. Geofencing involves creating triggers and actions when users enter or leave a precise geographic boundary. The main difference is that geotargeting casts a wide net based on location, while geofencing creates a virtual fence to target customers within a precise area.
Keep in mind that both geofencing and geotargeting can complement each other in certain scenarios, and the choice between them depends on the specific goals of a campaign or application. So when is it best to use one versus the other? Here are some key differences in how they are best utilized:
Used together, geotargeting and geofencing enable manufacturers to promote products, services, and offers to customers where and when they are most receptive. This can increase foot traffic to local dealers, boost engagement, and improve sales.