How Geofencing Advertising Can Assist Your Enterprise (Even When Your Enterprise Is On-line)
When you're trying to build an audience, there's nothing more powerful than knowing who is already interested in your product or service. And while pixelating your website visitors is a great way to keep track of your online fans, there is an entirely different segment of your potential customers that you may be missing out on.
The ones in the real world.
We talk a lot about the online spending boom. In 2019, 90% of retail purchases were still made in person in physical stores. And, for context, that's 90% of $ 6 trillion in retail spending. So if you ignore all of these "real world" buyers, you are missing out on a huge market share.
But of course, no one will be standing in front of relevant deals and counting the people who go in and out. This is archaic and creepy. We let technology do it for us. The best way to reach these people is through geofencing marketing.
To find out why this strategy is so valuable, we spoke to Dan Dillon, vice president of marketing at Reveal Mobile, a company specializing in results-driven geofencing marketing. He gave us a breakdown of what geofencing marketing is and how you can benefit from it even if you are an online business. And we're sharing his findings with you here today.
What is geofencing marketing?
Geofencing may sound like too complicated a high-tech replacement for building an online audience, but it's actually very simple (and can give you unique insights that Facebook may miss).
Here's how it works. Marketers draw a digital perimeter around the buildings of a brick and mortar company like Starbucks, Chick-Fil-A, Gap – it could be any location. Even Walmart parking lots. When someone crosses the "fence" they become part of a privacy-compliant audience that you can target with ads wherever you advertise.
It's important to remember that this is different from geolocation, which sends targeted ads based on your current location. This will not send messages to anyone. These are messages sent to people who have been in a particular store so you can get them to take the action you want (some of which will be covered later).
How is geofencing marketing better than traditional ad targeting?
The biggest difference is the intent. When you reach out to people who have already shown interest by visiting a retail location, you know they are high-intent buyers who are already warmed up to buy. You don't need nearly as much persuasiveness as a cold audience.
Plus, you know they have enough interest to go anywhere in person instead of just browsing online. This leads to a high-intent audience.
And if you target a high-skilled audience with high intent, you are more likely to get better ROI and higher conversion rates.
In fact, Dan's company conducted a study of location audience performance. Location-based target groups respond to ads with an average of 7.5 percent. In comparison, the average click rate for Facebook ads is around one percent. Improving your success rate by 750% is a clear win.
The other benefit of geofencing marketing is that certain tools allow you to look back on historical data and access audiences who have visited locations in the past. This is especially useful this year when there are less safe ways to shop in stores. If you look at the 2019 shopping data, you can get an idea of who is shopping where. If someone loved going to boutique clothing stores a year ago, chances are they still like these types of products. Same idea for the holidays. Customers visit specific stores for Christmas, Valentine's Day, Mother's Day, and all other stores, so you can reach high-intent audiences for any type of campaign. More on that later in the post.
You are also not limited by location. For physical business dealings, target people who are close enough to visit them regularly. For anyone with an online presence, the ability to see everyone's shopping habits, anywhere, is unparalleled. You can also geofence your own brick and mortar stores and then advertise them to these audiences to promote your ecommerce store.
And while you don't have purchase data for those audiences, you can see when and how often people are returning to a store. That means your leads will self-qualify. And give you a lot more insight into their habits.
What can you do with your geofence target list?
Once you have your location-based audience, you can use them like any other lead list. However, you can't just use them on a single platform. You can take them to Facebook, Instagram, or anywhere you post ads.
And if you have a physical store that you're geofencing, you can know who saw your ad and then came back to the store. Not only is the kind of precise mapping extremely valuable, but it also helps you test which ads are more effective and then use them for a wider audience.
You can also use your geolocated list and use it to create a similar audience targeting other people who have similar online behavior to those with your ideal personal shopping behavior. This is a great way to grow your audience, especially during times when in-person shopping numbers may be artificially low.
This way, you will not only know who to target, but also who to avoid wasting your time and money on.
For example, let's say you're an online housewares retailer. You have a list of people who recently went into furniture stores. And while you don't know if they actually bought furniture, you know they are in the market and may have already bought something. So it would probably be in the interests of your advertising costs not to target these people heavily.
However, you can get creative with geofencing. You could geofence U-Haul car rental locations, creating an audience of people moving around and likely in the new furniture market. However you want to find your best audience, geofencing will help you get there.
Tips for the holidays
There's never a more important time to make sure your ad targeting is right than before the holiday season. Remember there is $ 6 trillion in retail spending? An estimated $ 1 trillion of that was spent on vacation. Vacation spending has increased year on year and is only expected to continue.
Here are some tips on how to get the most out of geo-fencing this holiday season.
- Narrow your search parameters– By creating a truly specific geofence, you ensure that the most qualified buyers are the ones who will see your ads. When you're selling a high-end sports massager, you don't want to just target people who go to a sports store. You want to address people who regularly visit running and bicycle shops. This will make your advertising cheaper and more effective.
- Other household members are the target group– Once you have data on your target audience's shopping habits, send ads not only to them but to the other members of their households as well. Make sure your ads are geared towards gift giving and you are sure to get some conversions.
- Go back to last year's buyers– Instead of just focusing on the last shop visitors, extend your timing parameters to last year's holiday season. There may be more people who have bought gifts for their friends and family but may not have been to the store for themselves recently.
The ability to track consumers' personal shopping behavior and online behavior has a huge impact on the success of your marketing.
And it may be the best next step for your business if you want to get better quality leads. So make sure that you consider geofencing marketing as a possible option as you shape your marketing strategy, especially for the fast approaching holiday season.