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Clueless about how geofencing can be an effective tool for location-based targeting? This comprehensive guide will help you understand Geofencing, how it works, its applications, and everything in between. 

Consider a scenario. A shopper enters a mall and instantly receives a text message or a push notification informing that a newly opened restaurant is offering free drinks after lunch. A promising marketing tactic is to lure in nearby customers. 

But what made it possible to target the shoppers based on their location? Geofencing is the answer. So, what exactly does the term geofencing imply? 

Geofencing is a powerful location-based technology that empowers any business or e-commerce application to utilize communication-based services like radio frequency identification (RFID), Wi-Fi, or GPS, and set up a virtual perimeter or fence around the target area and execute a programmed action when a mobile device enters or exits a virtual geographic boundary.  

Targeting users based on their current location is an incredible way to make marketing campaigns a success, and geofencing is the tool that lets you carry out location-based targeting. But that’s not all that geofencing helps you, as a business, achieve. Curious to know more? Stay with us as we walk you through the article.

How does Geofencing work?

Geofencing wields communication technologies like GPS, RFID, Wi-Fi, cellular data, and the IP address range to put up a virtual fence. Firstly, a developer or marketer uses GPS or RFID-powered software to set up a virtual geofence around a geographical location such as a building, store, restaurant, or even a city or state.

A polygonal geofencing software is also required to mark points on the map, which acts as a geofence to track the location.

Generally, virtual geofences are created as a circle around the targeted location on Google Maps, integrated during the app development. It serves as a boundary that automatically triggers a correlated response, such as sending a text, or email, serving a social media advertisement, or delivering an app notification, whenever a user or a mobile device enters or leaves the geofenced area. 

The triggered response is assigned by an admin or a marketer, depending on where the technology is being implemented. Interestingly, it is possible to track different activities, such as entry and exit in each geofence, and specify a distinct response for each trigger. 

Geofencing allows the developers to set up and monitor multiple geofences at a given time, and the upper limit is 100 geofences per app per device user. 

Uses and Applications of Geofencing 

Geofencing can be implemented in various scenarios ranging from marketing and advertising to location tracking, and it can also help enforce the law. Let’s take a closer look at the most popular applications of geofencing. 

Better Marketing Results

Businesses can leverage geofencing technology to target customers based on location and offer exclusive deals to capture their attention and outperform their competitors. Geofencing can be a valuable marketing tool to show ads to users crossing the geofence and deliver push notifications

Asset Management and Vehicle Tracking

Geofencing makes it possible to track valuable assets like computers and vehicles and triggers alerts whenever they are taken outside the geofenced location.

Workplace and Employee time tracking

Companies are rapidly implementing geofencing technology to know when an employee enters the geofencing working location and automatically clock them in.

Likewise, the managers get notified instantly when the employee clocks out or exits the on-site location. It also helps determine whether or not the employee has left the job location after clocking out. 

Identify criminals 

Law enforcement bodies implement geofences to track citizens who may have committed a crime. It also makes it clear whether the alleged criminal was present during the given time. 

Deliver Personalized Results 

Companies can implement geofencing to enhance the customer experience and deliver personalized results. They can target users currently present in the event location and request them to write a quick review on social media platforms. 

Social Media Advertising 

Social Media platforms like Facebook, Instagram, Snapchat, and Twitter have inbuilt geofencing technology. These ad platforms enable you to set up a geofence and target the people currently in that area. 

Benefits of Geofencing

Now that we have a good idea of how geofencing works and where you can implement geofencing, proceed to check out the benefits of using Geofencing technology. 

Target customers at the perfect time and place

Marketers can advertise their products and flash their sales to the target customers after geofencing their competitors. This way, they can capture customers’ attention when they want to make a purchase.  

Improve productivity

Employers can remotely manage the workforce, use geofencing to improve team collaboration and make data-driven decisions to transfer employees from one site to another based on geofencing.

Ensures the safety of information

Geofencing facilitates accountability and helps restrict employee access to devices and applications, protecting their valuable data. 

Improves accuracy

Geofencing-powered alerts and reminders streamline daily work and make it easier to track time. 

Boost Local Sales

Geofencing-abled promotional campaigns offering exclusive discounts and several other perks to the local buyers bring huge crowds to the store more than traditional advertising can. 

Improved Data Analytics

Geofencing allows better tracking and analysis of customer data based on different metrics like impressions, engagements, views, and conversion. 

Prevents theft

Geofencing helps organizations protect assets and avoid thefts by alerting the officials when it trespasses the fenced location. 

Beat your competitors 

Geofencing your competitor’s brand to offer promising deals is an effective marketing strategy to introduce your brand and capture the attention of the shoppers. 

Boost Sales and Revenues 

Geofencing-based omnichannel marketing campaigns boost the sales and revenues of the business as they can target the audience based on location. 

Types of Geofencing 

Depending on the purpose of the application it is used for, geofencing mainly is of two types viz. Active and Passive. 

#1. Active Geofencing

In this geofencing type, the app is opened on the customer’s smartphone, and the GPS services keep running for the entire time. This enables businesses to track individual customers by latitude and longitude. There is high battery consumption in the active geofencing technique owing to the fact that GPS is always on during the entire time of app usage. 

#2. Passive Geofencing 

Passive geofencing, in contrast to active geofencing, does not need the application to be in a constant active state because it is designed to keep running in the background. Passive geofencing does not depend on GPS technology; instead, they rely on Wi-Fi or cellular data.

Passive Geofencing cannot function in real-time, and thus it is incompetent to push immediate ads and notifications on the user’s devices. This geofencing type is primarily used to collect user data because it cannot perform real-time action.

Challenges of Geofencing technology

Geofencing offers heaps of benefits but similar to other technologies, it too has its share of challenges. Following are the challenges that Geofencing is struggling to overcome. 

The technology needs maintenance which seems monotonous after some time, and not to forget is buggy, although users have stated that it delivers pretty accurate results most of the time. 

Geofencing is known to cause concerns about personal privacy. Employees and customers might be hesitant to share their location data which is the core factor behind geofencing-based marketing and business-related tactics.

Geofences heavily rely on the positioning technologies such as GPS, cellular, and Wi-Fi which can only deliver precise results in a short parameter.

Geofencing leads to high power consumption and battery drain, which can be worrisome for employees using their smartphones.

Geofencing Future Scope

Helping businesses to set up virtual geographical boundaries and monitoring the employees in real-time, geofencing is widely catching up with popularity. In the upcoming years, geofencing, combined with technologies like GPS, Wi-Fi, and RFID, will help businesses achieve many goals.

According to the research Geofencing Market by Solution, Technology, Industry & Region – Forecast 2022 – 2032, the Geofencing market is anticipated to achieve a valuation of US$ 9,596.6 Million by 2032 from US$ 1,867.2 Million in 2022. 

This accelerated growth will be fueled by technological advancement, which will help businesses embrace geofencing to provide a better user experience, improve client retention and boost overall sales. The introduction of 5G technology will offer high-speed data and location accuracy, which will further boom the use of geofencing in location-based marketing scenarios. 

Summing Up

That’s pretty much everything you need to know about Geofencing, which is slowly becoming an innate part of our virtual world. Geofencing enables businesses to harness communication services for geotargeting potential users to attain several important goals. Needless to say, geofencing envisions a promising future ahead.

You may also apply Guerrilla marketing with target-based marketing to grab customer attention and viral exposure.

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  • Taiba Hasan
    A postgraduate in Computer Applications with over three years of experience as a technical writer, she loves to craft content revolving around Windows, Android, and trendy technologies like SaaS and AI. Focused on writing in-depth research…

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