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How Geofencing Technology Works


If you recently noticed local ads and were surprised by that, then you can blame geofencing technology. Geofencing is a type of marketing strategy that has taken over most advertising for businesses.

If you want to target qualified audiences, then geofencing technology will let you do that by creating virtual boundaries. Whenever a targeted customer is inside of the boundary, push notifications or ads activated for a business. That entices potential customers in the boundary to visit the storefront.

It sounds like a bunch of science fiction, but it is real. More businesses are starting to use this technology daily, and it can be used with PPC ads and even used on Facebook.

The real question is, how does geofencing work?

This article will talk about geofencing technology and how you can make it work for your business.


What Geofencing Technology is About


Geofencing is a location-based marketing strategy that will use GPS signals to target a potential customer when they enter a specific boundary.



A business will set these boundaries up close to areas where they want to target customers near a physical location, and they can get set up anywhere.

Geofencing is a type of marketing strategy that lets you target a customer based on where they are around the business. Usually, a business will set up geofences around their business, events, or a conference. It just depends on whom you are looking to target.

An excellent example of geofencing is if a company is having a massive sale on products, and they want to let customers know about it. They can create an automated text message, and it would let people know whenever the person enters the geofence.

If certain events often attract potential customers who are in your target market, you can set up a geofence around the event and target people with text messages,  push notifications, and ads.


What are Geofences?


Whenever a company has decided to use a geofence, it means that they want to target a specific audience within a particular type of boundary.

The boundary will be invisible, and it created wit the help of GPS technology. It is easier to think of it is a fence on a map because that is what it is basically.


How Geofencing Targets Audiences


Geofencing is going to target qualified audiences by providing ads for your services or products whenever they step inside of the geofence. The ads could be PPC ads in a web browser, text messages, or even push notifications.


Push Notifications from Geofencing Examples


If you have recently opened a brand new clothing store and you have a new shopping app for it, then you can set up a geofencing campaign. Whenever a person downloads your app, and it gets equipped with geofencing, then you can provide push notifications whenever they are in the area.

Push notifications will show in the notifications on a smartphone through an app. The app does not have to be on for it to get push notifications. If you have a sale on accessories and someone who has your app is in the area, then a push notification will let them know you are having a sale.


Text Message Geofencing Examples


Suppose you have the contact information of your customers, which includes their phone numbers, then you can target them with text messages. If you are using geofencing, then you can send out an automated text message when they enter the area. It could let them know that you are having a sale or that they are close to one of your stores.


PPC Ad Geofencing Examples


A PPC campaign is an excellent way for you to reach your customers, especially when platforms like Google Ads provide location targeting, which is almost like geofencing but without all of the boundaries. The ads work similarly for geofencing, but the ads are available when a person crosses a geofence.

For example, if you have a new ice cream shop and a couple is walking down your block, and they are looking for the best place to get butter pecan ice cream in the town. You know that you are one of the few ice cream places in town, and you decide to target ice cream in your ads. Your business can use geofencing to place a block that is in a four-block radius in every single direction from your business. That means that ads will get given to people searching for keywords that target when in your area.

Yet, even though you have specific keywords for your campaigns, it does not mean that customers are going to see any of your ads automatically. You have to decide how much you are going to pay when someone clicks on your ad that targets a particular keyword. If it is less than what your competitors are paying, then your ad will not become visible to people.

Geofencing helps to target potential customers with ads inside of an invisible boundary, and that is if you have outbid your competitors for a particular keyword.


Is Geofencing Accurate?


If you want to know what makes geofence technology accurate, then it is good to know that technology will use a combination of Wi-Fi, cell data, and GPS.

In areas where Wi-Fi routers and cellphone towers are everywhere, such as an urban location, the accuracy for geofencing can be up to 200 meters.



In rural areas where there are not as many Wi-Fi routers or cell towers, the accuracy can reach around 300 meters. It would be best if you kept in mind that geofencing will work best when GPS services are activated, and Wi-Fi is enabled.


The Expense of Geofencing Technology


Most companies will adopt this form of marketing quickly, but the biggest question is just how much is it going to cost?

Geofencing is a newer type of marketing strategy, and it is hard to put a certain amount on the service. Plus, each agency will be different, and they will charge different amounts of the services they offer.

Yet, some things can help you to figure out how much a campaign like this will cost your business.


How much will you pay for each month?


If you have decided to use the PPC ad as part of your geofencing campaign, you will need to decide how much you will be spending on the ads each month. If you have decided to target specific keywords or even long-tail keywords, then you will pay less than if you use general keywords. The reason why it will be cheaper is that there is a much higher concentration of generalized keywords, which means that there is a higher cost per click and more competition.

A decent estimate for spending for monthly ads during a geofencing campaign can range between $1000 to around $10,000. That gets based on your competition and what industry you are in.


How many locations do you have?


The cost of a geofencing campaign can change depending on the number of locations that you have. If you have six locations that you are looking to target using geofencing, then you are going to end up paying for each of these locations. A campaign will be cheaper if you have only a few locations.


Do you have Geofencing tips?


Is your business new to geofencing marketing, or are you someone who has experience? If you have worked with geofencing strategies, we would love to get tips and hear about your experiences.

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