How Geofencing Marketing Strategies Work

Geofencing uses GPS technology to identify mobile device users that cross into a predefined zone, essentially building a “virtual fence.”

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Are you thinking about building a geofence around your business?  It sounds pretty techy, but it’s really quite simple.  Geofencing uses GPS technology to identify mobile device users that cross over into a predefined zone.  In essence, it’s building a “virtual fence” around a location. This was a really exciting marketing tool when application-based phones first became popular.

In short, a company with a mobile application can program proximity coordinates into the software.  When a person with the app loaded onto their phone enters that zone, the application generates some type of automated response.  For example, Acme Superstore could have a mobile application that notifies each customer entering one of their stores about their current sales.

There are a couple of ways the technology works.  One is by using the Global Positioning System (GPS) to triangulate specific locations.  Another is via the phone’s Bluetooth capabilities using radio waves.  Lastly, beacon technology uses the location services program within smartphone programming.

Some mobile users enjoy the convenience of geofencing technology.  By using the location tracking feature of the phone, customers can receive reminders to pick up items on their shopping lists when they are approaching their neighborhood grocery stores.  A garage door mobile application can automatically open when the owner (assuming he has his phone with him) enters the driveway.  Your home security system could turn on and off when you leave and return to your home.  Some employers use geofencing applications to log employees in and out of work zones to allocate payroll accurately. It’s also the same technology that helps you find your phone when you’ve misplaced it.

Geofencing provides highly focused marketing messages.

Notifying your own customers about sales when they enter your store is one thing, but how about sending mobile ads directly to a customer’s phone when they are at your competitor’s location?  This is known as mobile geo-conquesting, and companies are using it.  For example, one automobile lot could send targeted ads to customers who are shopping at another dealership.

Another opportunity is mobile geo-retargeting.  This isn’t as cut-throat as geo-conquesting; instead, these systems send ads or messages to customers who have researched information online about products or services relevant to your business.  It’s very similar to seeing Google or Facebook ads for a product pop up after you’ve performed an online search for that product.

What’s the future for geofencing?

Not all consumers are so keen on geofencing technologies–whether they know it’s a thing or not.  Over the years, more consumers have become sensitive to the lack of privacy they have when using mobile phones.  New regulations such as the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have become model legislation intended to protect consumers’ identities better, confidential information, and sharing of collected data.  At least 11 other states have passed digital privacy regulations, and 80 countries have some form of privacy laws.

Whether or not geofencing complies with or violates these laws depends on how the software is written and used.  For example, Google came under fire in 2018 when it was accused of violating GDPR because the user’s location was still being tracked even when the Location History function was turned off.

Apple is currently strengthening privacy controls for its consumers.  In iOS 13, Apple made changes to the way developers could use Bluetooth to collect user’s location data.  For example, before the update, tracking beacons could access devices via Bluetooth even when users had denied the app from tracking them.  Now, Apple users must give consent for the application to access Bluetooth.

If you’re considering geofencing as part of your marketing strategy, it’s essential to have a compliance professional review your software to ensure it conforms with all the applicable privacy regulations for your company.  Some common rights consumers have are:

  • The right to request disclosure about what information is being gathered and what purpose it is being used for.
  • Limitations on the use of information only for its expressed purpose.
  • The right to access data collected.
  • The ability to opt-out.

When you’re ready to change up your marketing efforts, contact Paradux Media.

The team at Paradux Media Group is continuously monitoring changes in the environment that impact marketing communications and promotions.   Whether you need a one-time promotion or you’re looking for a multi-tiered advertising campaign, let our experts guide you through the entire process.  Contact Paradux Media today to learn more about how we can help your business achieve success.


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Angela Peacor

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