Geofencing and its Applications in Marketing
The term Geofencing is derived from the words Geo (= geographic) and fence (= the fence). Geofencing is a technology that allows boundaries to be set within a specific geographic area. GPS coordinates or RFID signals, for example, are used for this purpose.
Geofencing System Applications include:
- Monitoring of offenders with ankle bracelets
- Enforcing school routes
- Search for individuals, e.g., by the police
- Enforcing border crossings for car rentals
- Device tracking
- Theft protection (when a geofenced area with stolen goods is left, an alarm sounds)
- Location-based advertising at the point of sale
When leaving a specific pre-defined area, an alert/notification is triggered for the user. A defined geofencing area can be very small or very large. Geofence technologies can locate devices up to 10 meters away.
Geofencing in Marketing
In marketing, geofencing is used to present a personalized offer to the target person upon leaving a “restricted area” (fencing = fencing), alert them to an event, or initiate a survey (e.g., asking for feedback after a store visit). As a company, you can set a geofencing area around each of your stores, for example, with a radius of 100 meters. When a user enters this area, they receive location-based advertising via a push notification with offers, encouraging them to make a purchase in your store.
Data Privacy Regulations for Location-Based Advertising
Location-based advertising often combines geofencing with an app that the user must download in advance on their phone. The user must first agree to the data privacy regulations so that you can send location-based push notifications to them. For the push notifications to be received, the app does not need to be constantly active. It is enough if it is installed, location services are enabled, and permission to receive messages has been granted, with the information that this consent can be withdrawn at any time.
If location is determined using GPS coordinates, data is exchanged via navigation satellites. For RFID signals, the request is made through the mobile network or with the help of Wi-Fi using an RFID chip.
Advantages of Geofencing
Geofencing makes it possible to deliver personalized advertising messages via smartphone, independent of time and place. With geofencing, potential customers can be informed about offers directly at the point of sale. The smartphone user only receives the advertisements that interest them and that they are happy to receive. You can also set up a geofencing zone around your competitor’s location and attract customers who are on their way to the competition with an incentive to visit your store instead. However, whether this constitutes unfair competition is still unresolved, and you should definitely seek legal advice before implementing this technology.
Example of Successful Geofencing
Coca-Cola provided a great example of successful geofencing. The company printed names on its soda cans, and as soon as the person involved walked past a Coca-Cola billboard, their name appeared on the digital billboard. This temporarily made the smartphone user the brand’s star, and Coca-Cola generated increased attention while also improving its brand image. Of course, this required the person to have previously downloaded the Coca-Cola app and have location services enabled.
Your Contact for Geofencing
Geofencing is especially interesting for brick-and-mortar retail, as it allows direct engagement with customers at the point of sale. Many smartphone users allow access to their location. The best way to explore the possibilities you have with geofencing technology in your mobile campaign is by consulting with our online specialist Tanja Hensler (hensler@trebbau.com, Tel.: 0221/37646 – 330).