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The Benefits of Geo-Fencing Digital Ads for Local Businesses

young woman walking and using a smart phone in an airport with an actual fence around her to symbolize the marketing technique called geo-fencing

Geo-Fencing

With the increasing movement of consumers from traditional web browsing (i.e. laptop and desktop computers) to mobile browsing on tablets or smartphones, advertisers are now using a new mobile marketing technique called geo-fencing when trying to target potential customers.

Geo-fencing is a variation on the more commonly known geo-targeting – that is, restricting the placement of digital ads so that they only show up to users within a predefined set based around the location of the user’s IP address.

map of the U.S. with a bulls eye target on it and statistic showing 58% of marketers are using geo-precise targeting.

Fifty-eight percent use geo-precise targeting.

Geo-targeting can make sure that your ads are only shown to the people in the specific state, city, or even ZIP code that you want, ensuring that impressions aren’t wasted on people that will never visit your local business. Geo-fencing takes this concept one step further by creating a “fence” around your defined area, such as a few square miles around your store, or along a strip of highway frequented by commuters. Ads will then only be shown to people who move into this fenced area.

map of the U.S. with a bulls eye target on it and statistic showing 40% of marketers are only using basic geo-targeting.

Forty percent use basic geo-targeting.

Fifty-eight percent of national ad campaigns in Q1 2013 used some kind of geo-precise targeting; another 40 percent used basic geo-targeting. [1] Geo-precision, in combination with things like special offers or event-based marketing, can help you get maximum return on your digital ad spend.

Take Advantage of Mobile Online Traffic

Nearly two-thirds of the American public now owns a smartphone of some sort.

In today’s age of instant information, almost any customer who goes to a restaurant, store, hotel or any place of business has already looked it up on a smartphone to do some quick research. Being that nearly two-thirds of the American public now owns a smartphone of some sort, it’s crucial that business owners make efforts to target potential customers through their mobile searches. [2]

Harness The Power of Mobile Searches

  • 81 percent of shoppers conduct online research before buying. [3]
  • 78 percent of mobile searches for local business information results in a purchase. [4]
  • 90 percent of all American adults own a cell phone.
  • 75 percent of mobile shoppers have used a mobile coupon.
  • 42 percent of American adults own a tablet computer.
  • 32 percent of American adults own an e-reader. [5]
  • 74 percent of adult smartphone owners use their phone to get directions or other information based on their current location.
  • The average cell phone user checks their phone 150 times per day. [6]
  • 10 percent of Americans own a smartphone but do not have any other form of high-speed Internet access other than their data plan.

Despite the fact that people can buy nearly anything from anywhere with a simple click of a button, most customers still prefer to shop locally. Eighty percent of consumers’ disposable income is spent on company’s located within 10 miles of their home. [7] This means that business owners that are able to tap into their local market have a good chance of improving conversions.

Reduce Wasteful Spending on Advertising

same woman walking through the airport with red symbol denoting the use of geo-targeting

Geo-Targeting

By putting ads, specials and coupons in front of the people who actually need it, business owners can reduce their advertising waste and increase conversions.A common saying in advertising is that “half of all money spent on advertising is wasted; the problem is determining which half.” Geo-targeting and geo-fencing help reduce this waste by eliminating many of the unknown factors involved in advertising. Traditional advertising relies on non-specific targeting, which leads to low conversion rates. Geo-targeting and geo-fencing is all about getting the right products, in front of the right people, at the right time and location.

If you run a hotel in a big city, it may be advantageous to use geo-targeting or geo-fencing to make it so people searching for a hotel within 10 miles of the nearest airport find an online special from you. Likewise, a restaurant looking to drum up lunch business may want to use geo-location marketing strategies to offer a lunch coupon to anyone using an Internet search for “places to eat lunch” in a given area.

By putting ads, specials and coupons in front of the people who actually need it, business owners can reduce their advertising waste and increase conversions. What good is an ad impression for a person who is not likely to take action on it?

Geo-Fencing to Intercept Potential Customers from Competitors

young woman walking and using a smart phone in an airport

Woman walking and using a smart phone in an airport

In addition to catering ads to reach customers in a certain location based on general Internet searches, geo-precise advertising also allows advertisers to intercept customers from competitors. Similar to competing retailers or gas stations using store displays, price cuts and other things to entice customers away from their competitors, geo-conquesting provides digital advertisers with similar capabilities.

Instead of putting up a geofence around their own locations, business owners can set up geofences around their rivals’ and competitors’ locations. This means when a potential customer is searching for a place to eat dinner near a competitor, the search triggers mobile discounts or offers from your location. Some research has shown that this tactic can lead to an increase in click-through rates as high as 30 percent. [8]

Many advertisers use a combination of both geo-fencing and geo-conquesting to influence users of smartphones and other mobile devices. This strategy is especially popular for retail stores, restaurants and hotels; however, it can be applied in any type of business or industry.

Learn More About Your Advertising OptionsIn our ever-changing world, it can be difficult to keep up with all of the new developments and strategies in advertising. It can also be challenging for an inexperienced business owner to determine which advertising medium and strategy would be most effective. What works for one business may not be as effective for another.

Mary Pomerantz Advertising is a nationally renowned advertising agency that has worked with hundreds of clients over the last two decades. We rely on our experience and expertise to guide clients in understanding which advertising strategies will garner the greatest results.

Allow us to work with you in determining your target audience and creating an advertising campaign that will suit your needs. We have designed and written thousands of advertisements and have spearheaded countless marketing campaigns. If you’re a business owner who wants to bring in more customers and revenue, but are unsure of how to reach them, contact us today to begin working on your advertising strategy. Contact us today at 732-214-9600 to get started.

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