Geofencing is a kind of location-based marketing and advertising. When a device enters or leaves a virtual geographic boundary, a mobile app or programme uses radio frequency identification (RFID), Wi-Fi, cellular data, or the Global Positioning System (GPS) to define the boundary and initiate a targeted marketing campaign. We refer to this boundary as a geofence.

Another feature of geofencing—also spelled geo-fencing—is the ability to configure triggers. These allow a user to receive an alert when a device, like a smartphone with an internet connection, crosses a predefined geographic boundary. They may also start a particular action directed at that device.

When a working professional and a student happen to pass by a computer store, for instance, and they both get a text message that reads, "Today only! Get a free e-reader when you purchase a laptop!"

The users receive the text message because they are in close proximity to a store with a geofence, which initiates a targeted marketing campaign. Users may also be geotargeted by the store through emails, push notifications, social media ads, in-app notifications, etc.

Geofences, or virtual barriers, can be either passive or active. For active geofences to function, a mobile app must be open, and the end user must consent to location services. Passive geofences operate in the background and are always activated. They depend on cellular and Wi-Fi data.

How is geofencing implemented?

Communication technologies like GPS, RFID, Wi-Fi, or cellular data are necessary for geofencing. After a marketer creates a geofence and an RFID tag or mobile device enters or leaves the geofence, a preprogrammed action is automatically started. A virtual boundary can be drawn around a specific geographic area, no matter how big or small—a building, shop, or mall, for example—a ZIP code, city, or state.

In GPS- or RFID-enabled software, a virtual border is first established by an administrator or developer around a specific place. They can locate spots on a map by using polygonal geofencing software. These markers indicate the perimeter inside which they hope to apprehend individuals or gadgets.

The most popular way to define a geofence is to use the application programming interfaces, or APIs, developed during app development to draw a circle around the desired area on Google Maps. When a device with permission enters or leaves the designated area, the circle signifies the activation of the geofence. The administrator or developer has preprogrammed the response.

User-defined geofencing: what is it?

Companies and marketers frequently use geofencing, but private individuals can also incorporate it into their mobile apps. With these apps, users can choose the address or location at which they wish to receive a particular alert or push notification.

Here, geofencing makes use of an "if this, then that" command, which enables the application to start a process in response to another process. An instance of a command that the user can programme into the app is, "If I lock the front door, turn on the porch light." In a similar vein, customers can set up a reminder app to notify them when they arrive at a specific spot. For instance, "When I approach the office building, remind me to wear my ID card."

What advantages does geofencing offer?

Marketers may target potential customers with compelling communications and alluring offers thanks to geofencing. Geofencing can enhance consumer engagement by targeting a specific population within a defined geographic area that is further filtered. This kind of tailored advertising enhances ad spend effectiveness and engagement rates.

Businesses can increase their own traffic and sales by using geofencing to entice customers away from their rivals. Additionally, geofencing offers useful data that enhances marketing campaigns. This comprises information on foot traffic, lengths of stay, conversions, and so forth. To improve user experiences and personalise advertising, marketers can merge this data with information about users' online activities, purchasing patterns, and web browsing habits.

Creating multichannel marketing campaigns to increase sales and revenue is another benefit of geofencing for organisations.

Geofencing's mobile focus gives it additional uses outside of marketing. Any business can use geofencing for marketing, advertising, tracking, security management, law enforcement, and more on a variety of mobile devices, such as smartphones, tablets, and smartwatches.

What scenarios can you use geofencing for?

Geofencing, a widely used marketing and advertising strategy, aims to increase foot traffic to physical businesses, such as retail establishments. For instance, when a user of a company's app on their device enters a geofenced area, the app can send in-app alerts.

Businesses can target users of other apps by using geofencing. One instance might be a restaurant, movie theatre, or hair salon offering coupons via an app to customers who enter a geofenced region. Some companies use social media apps like Facebook and Instagram's geofencing features to target customers who visit a geofenced area with advertisements. Additionally, they can send customised advertisements to individuals who enter a predetermined geographic area by using search engines like Google.

Certain marketers use geofencing as a tool to attract customers to their competitors' establishments. In this case, company X places a geofence around company Y so that customers entering the boundary get a push notice or SMS message from Short Message Service telling them to go to business X instead of business Y.