Many of our clients serve their customers and clients in a specific geographic area, such as construction contractors, stores, restaurants, and more. So a question we’ve been getting asked a lot recently is, “What is geofencing vs geotargeting?”
Geofencing typically refers to detecting a person’s geographic location and then serving them ads or services while they are in that location or after they leave. Geotargeting typically refers to advertising to an audience that has visited a geographic region and that also meets other criteria including specific interests, behaviors, and more.
If you serve people or businesses in a defined geographic area and you are looking to advertise your products or services to them, it’s important to know which type of geographic-based marketing is best for you. Keep reading to learn more about each option and to get help deciding which option your business would benefit from the most.
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What Is Geofencing Used For?
Some of the most common use cases for geofencing include:
- Facilitating order pickups at grocery stores, retail stores, restaurants, etc.
- Tracking business-owned vehicles in a fleet
- Location-based reminders in smartphone apps (for example, “remind me to take out the trash when I get home”)
- Delivering special deals or coupons within an app when someone enters a store (requires smartphone user to grant permission for this feature to work)
As you may notice, many of the practical applications of geofencing are not related to marketing. And in most cases, people are required to give permission in order for the geofencing service to work. For example, in order to pick up an order from the parking lot at a retail store, some retail stores may require you to download their app and grant the app permission to track your location so that when you enter their parking lot you can be given the option to notify the store that you have arrived.
We see a lot of confusion arise when business owners hear about geofencing and confuse it with geotargeting, when in fact they are two very different things.
While it is certainly possible in some cases to use geofencing to define a target audience and then show advertisements to them, this type of use case is often reserved for large corporations like retail stores, restaurant chains, hardware stores, etc.
In most cases, small local businesses that want to target their audience within their service area are best off using geotargeting, which leads to the next question…
What Is Geotargeting Used For?
Geotargeting is most commonly used in advertising campaigns on Google, Bing, Facebook, etc. when a business wants to target a group of people within in a large region such as a county or a group of cities who also have specific interests or behaviors that indicate they may be a good match for the business’ product or services.
For example, a dental office may want to target anyone within their entire service area (often covering a radius that spans many miles) who has recently shown an interest in or has researched tooth care, cavities, fillings, crowns, etc.
What Are The Biggest Differences Between Geofencing vs Geotargeting?
The one similarity that geofencing and geotargeting share is that both use a person’s geographic location as part of their targeting process. Their biggest differences typically lie in the size of the geographic area that is targeted and in the additional criteria that may or may not be used in ad-based targeting.
Geofencing is typically best used in situations where a very tight geographic region is required, such as the retail store pickup service mentioned earlier. In that scenario, the retail store would likely use some sort of localized technology that allows them to better detect when a customer has arrived at their store. Additionally, the customer would need to grant the store permission to detect their location via the store’s app on their mobile phone.
While many people feel uncomfortable sharing their location with a person or company, most people would feel comfortable giving the store permission to see their location because they’re receiving a benefit in exchange – the ability to have an associate deliver their order to their car in the parking lot.
On the other hand, geotargeting is best used in situations where geographic targeting does not have to be restricted to a very small area, and where additional targeting criteria are preferred. Depending on the advertising platform used, using geotargeting can allow a business to target people in a geographic area without each person having to give the business explicit permission to advertise to them. Using Facebook’s geotargeting in an ad campaign is an example of this.
Does Facebook Use Geofencing?
The simple answer is no, Facebook uses geotargeting, not geofencing.
Geofencing is often confused with geotargeting because it could be argued that in order for any type of geographic-based targeting to work, there must be a defined “line” or “fence” around a certain area. Some would argue that targeting anyone in a state (such as the entire state of Pennsylvania) is technically made possible through the virtual geographic “fence” that runs along the state line of Pennsylvania. Thus the confusion with the term “fence” in geofencing.
However, geofencing typically refers to targeting a very small geographic area, such as a store or shop. Facebook (and many other online advertising platforms) has a minimum geographic targeting radius of 1 mile. In other words, you cannot target anyone within a 1/2 mile or 1/4 mile radius on Facebook. Because of this, we believe it’s more accurate to call Facebook’s geographic targeting “geotargeting” and not “geofencing.”
Why Is Geotargeting Typically Better Than Geofencing For Small Local Businesses?
Many of the local businesses we serve care more about getting their message in front of their ideal audience than they care about whether or not someone has entered a specific store or building. This is why geotargeting combined with interest-based or behavior-based targeting is one of the best ways to get in front of your ideal audience.
While it may be alluring to use geofencing creatively, such as to target anyone who has visited your local competitors’ offices, that type of campaign has a much lower chance of succeeding than a properly executed campaign that uses a combination of geotargeting and interest-based targeting.
Most people do not realize that defining a geo “fence” around a competitors’ location is often not as precise as you’d hope. For example, you may want to target anyone who visited a competitor, but the competitor’s building is located right beside a busy road. Even though you may define a fence just around the building and parking lot, in the real world, it may actually pick up the large volume of people who are driving by the building or who are stopping at a stoplight or stop sign in front of the competitor’s building. Of course, many of those people who got close to your competitor’s building but didn’t visit your competitor have no actual interest in the competitors’ business and thus are not likely to be your ideal audience either.
While geotargeting is much less precise geographically than geofencing, it is often sufficient enough when used in combination with interest-based and behavior-based targeting. Would you rather show your message to someone who never visited your competitors but is a perfect candidate for your service (geotargeting + interest & behavior targeting) or someone who drove by your competitor’s building (geofencing) but has no interest in your product or service?
What If I Want To Start A Geofencing or Geotargeting Campaign For My Business?
The first step we recommend is to speak with a marketing consultant who will learn more about your business’ needs and your campaign goals. They will then be able to recommend a type of campaign that would be best suited for your business.
We offer free consultations to businesses who need help deciding what type of marketing or advertising is best for them. Schedule a free consultation today!