Geofencing, or the ability to use invisible boundaries to target customers with surveys and coupons, is all the rage, and rightly so. Many businesses have experienced click-through rates on geofencing campaigns that are as much as 70% higher than standard ads. But geofencing also has limitations. Here’s our take on the top four things marketing managers and researchers need to know about geofencing:
1. Content is Still King. However you make use of geofencing, you still have to offer a winning value proposition in exchange for users giving up their location privacy. It begins with the all-important opt in phase. You can set up as many geofences as you want, but if no one has agreed to participate, your efforts are in vain. This can require traditional marketing efforts to get the word out about your program or campaign, and careful attention must be paid to what you’re offering. Then there’s the content of the actual messages or ads sent via geofencing. Think of this content in terms of the action the targeted user will engage. The message needs to be brief, location-relevant and one that prompts action.
2. You Need to Integrate Bigger Data to Make the Most of Geofencing. Geofencing is great, but as a stand-alone it can fall short. What you really want to do is leverage the data that emerges from geofencing to further segment demographics in order to reach your most highly-targeted audience. To do that, however, means you need to have more data on users, such as historical behavior, demographics and user movements. It’s a good idea to mine this data into an excel spreadsheet or similar data management system. Once you have a fuller context, you can begin to link location to behavior – and that’s the Holy Grail for marketers. The good news is that several companies are working on bringing mobile, local and big data together to do just that. Companies leading the charge include PlaceIQ, Sense Networks, xAd and JiWire. David Staas, CEO of JiWire, claims the process can result in a 30-40% improvement in ad performance over standard geofencing (read a larger piece on this, Mobile & Local Join the Big Data Movement).
3. Take Privacy Concerns Seriously. Not everyone likes the idea of having their privacy invaded through geofencing and this is particularly true with the influx recent media reports related to privacy issues, and marketers need to take this into account by making sure they have permission for pushing content out to users. This is a concept known as permission marketing, which is replacing the tired old interruption-based marketing model. Customers need to know what giving permission really means, how their data will be used, why they are being asked to opt in and what they will get in return. Opting in needs to be simple and easy, and so does opting out.
4. Both Size and Location Matter. If you build a geofence that’s too large, it becomes pointless. If your aim is to draw people into a store location, then small is beautiful. One rule of thumb is that the perimeter should be less than four minutes travel time from the targeted location, whether that’s on foot (like in a mall) or driving (within blocks of the location). But you needn’t limit your geofences to tight areas around a storefront. If the point of your marketing is to reach your customers where they’re at, then they’re not always near your store. If you fish where the fish are, rather than where you want them to be, you’ll need to change your content to match. Rather than an instant deal that you might use for a geofence around your store, it may be an informational alert about an upcoming event or sale in advance, and delivered to users in a geofence that has nothing to do with store location.
We think the above takeaways are critically important to building a successful geofencing strategy for your marketing efforts. Have you identified other tips or suggestions in your geofencing experience that others might find useful? Please post them in the comments area below and share the power of mobile.