What is Geofence Advertising?

Ever since you walked into that boutique clothing store, all you see now are ads for that dress, either from that store, or a competitor. Is that a coincidence? No. Most likely, you are being solicited using Geofence Advertising Technology. Geofence advertising has emerged as one of the top advertising strategies in the country. Statistics show that the average person spends 5+ hours a day on their smartphone, and geofencing is compatible with over 90% of mobile devices. Plus, over 70% of individuals say they prefer a personalized ad experience!

Ethic Advertising Agency has run geofence advertising campaigns in-house since 2018. We are the official geofencing provider of geofencing.com and geoconquesting.com, as well as a preferred beta tester of new technology with our Demand Side Platform (DSP). We are a strategic partner to many advertising agencies and strive to be at the cutting edge of hyper-targeted geographic ad targeting everyday.

What is Geofence Advertising?

There are a few forms for geofencing advertising, but I’m going to go over the form we use and believe to be to be most accurate and hyper-targeted available. Geofence advertising (AKA geo-fence advertising, geofencing advertising, geofence marketing, and geofencing marketing) is a form of hyper-specific location-based digital targeting that allows advertisers to serve display/banner, video pre-roll, OTT, CTV, and/or digital audio ads to devices that have been located in a small geofenced location for up to 30 days after the device entered a geofence.


What are the advertising mediums that can be used with geofence advertising?

There are five primary forms of advertising that we can effectively and confidentially use geofence targeting for as of 3/10/22. I include a date at this point because digital advertising is constantly evolving, and more mediums are on the horizon for us to use geofencing for.

  1. Display Ads (AKA Banner Ads): Static and Animated
  2. Video In-Banner Ads
  3. Video Pre-Roll Ads
  4. OTT (Over The Top) and CTV (Connected TV) Ads
  5. Digital Audio Ads

How does geofence advertising technology work?

Some geofence targeting uses radio-frequency identification (RFID), beacons, Wi-fi, and Bluetooth technology, but we use and found the most accurate technology to hyper-target people who have been to a specific location is GPS based.  We use GPS technology to identify that a device has entered into one of our geofences as the primary tracking source, but we also cross match this data with any Wi-fi data available as an extra layer of accuracy.  In the United States, approximately 90% of mobile devices have GPS turned on in the background at all times.  The accuracy of this technology is about 4.9 meters (16 feet), but an easier way to think of it is that it’s just as accurate as the map you use to navigate on your mobile device.

Does geofence advertising only appear on the mobile device that enter a geofence?

Nope…we can serve ads on many different devices when using geofence targeting. Mobile devices make up the majority of our initially collected devices, but we also use cross device matching technology that allows us to identify other devices (smart TVs, tablets, computers, and other mobile devices) to the initial device and begin serving ads on those devices as well. This means that you can serve digital ads to an individual on their mobile device, and also on their tablet, smart TV, home computer, etc… allowing you to maintain top of mind awareness to the customer!

How do you create geofences?

There are four core forms of geofences that we create.

  1. Traditional Geofences: This is when we set up geofence locations that we manually draw a polygonal share around the specific area(s) we want to target.  This tends to be really useful when targeting outdoor spaces, locations within locations (shopping centers, section of stores, parking lots, etc…), odd shaped locations, when you don’t have an address, and when you don’t want to target the entire property of an addresses.  We use Google map and satellite imaging to help geofence the proper locations.
  2. List Provided Addressable Geofences: This is when our clients provide us with an address list of properties, and we download them into our system which automatically geofencing the property lines of each address.  This is extremely useful for residential properties and massive address lists.
  3. Curated Addressable Geofences: If our clients don’t have a list of addresses, we can use over 2,000 data points to create an addressable geofencing list for them.  We have residential and business data on properties which data segments like occupations, business industry, business name (Ex: All Walgreens in Pittsburgh, PA), financials, interests, demographics, gender, age, wealth, information about the properties, and much more. This data is linked to the property though, not individuals. For example, if you are looking for businesses owners with kids, it’ll find homes with at least one business owner that also has kids… not the individual business owner/parent.
  4. Event Based Geofencing: These are geofences that we can set up around a location for a temporary amount of time, but then continue serving ads to the people who were at that location even after the geofence is taken down.  This is great for trade shows, concerts, sporting events, conferences, and more.

How much does geofence advertising cost?

Geofence advertising is sold on a cost per thousand (CPM) basic.  This means that if you run 1,000 banner ad impressions (times your ad is served) and is costs you $7.25 then your CPM is $7.25.  So if you run 500,000 impressions in a month, your total cost would be $3,625 for that month. Formula: (500,000/1,000) x $7.25 = $3,625.00.  CPM is the rate, but the total cost of geofence advertising will vary greatly depending on the advertising mediums used and the population size that enter your geofences.

Different advertising mediums have different CPMs.  OTT/CTV has the highest CPMs, digital audio and video pre-roll/in-banner ads are in the middle, and static and animated display ads have the lowest CPMs.  This is due to varying inventory levels, mediums that are seen to be more premium than others, and effectiveness.  A video commercial showing up on someone’s’ favorite Hulu show is going to be more valuable and attention grabbing verse a display ad showing up on the weather app.

The population size of the target audience should also greatly determine an advertiser’s geofence advertising budget to ensure the best results and a healthy reach and frequency.  If you have a campaign with a few geofences and a population size of 10,000 people, you’ll need a lot less money to be successful than if you are targeting more geofences that have 1,000,000 people entering them.

Typically, effective geofence advertising budgets range from $2,000 to $40,000 per month for individual markets, and it can go up from there for multiple markets or nationwide campaigns.

Feel free to contact us for help with determining what your budget should be.

What are some good examples of areas to geofence?

Below are some common examples, but also ask yourself where your specific target audience frequently are.

  1. Your competitor’s locations. AKA Geo-conquesting.
  2. Your own location.  Self target can be a powerful tool.
  3. Events. Conventions, concerts, sporting events, trade shows, etc…
  4. Locations within walking distance of your location.
  5. Homes of your target audience based on 3rd party data via addressable geofencing.
  6. Homes of your target audience or potential returning consumers based on your 1st party data you already have via addressable geofencing.
  7. Locations that offer the step before your product or service. Example: auto insurance providers can geofence auto dealerships to get a “save on your auto insurance for your new car” message.

What are some of the benefits of using geofence advertising?

  1. Increase leads and get a Return on Investment
  2. Increase brand awareness
  3. Increase website and foot traffic
  4. Steal customers from your competitors
  5. Upsell, retain, improve loyalty, and referrals from you current customers

How do you know if geofence advertising is successful?

We’re a big believe in looking at multiple data points to tell the story of success or failure in any advertising campaign.  When it comes to geofence advertising, there are multiple great data points to determine success.

  1. Geo-conversion data: We use the same geofence target technology to also set up geo-conversion fences around your conversion locations.  For example, we have a client that operates veterinary emergency locations across the country.  We can geofence dog and cat owners’ homes, pet stores, other vet clinics, dog parks, etc… Not only do we serve this audience their ads, but then also provide data on how many people actually came into one of their locations.
  2. Sales and opportunities: Track your sales and leads that have come in during the geofencing campaign verse prior to using the geofencing campaign.  For example, we work with a large fencing manufacturer that targets their ideal B2B audiences with geofencing.  Using their Salesforce data, they are able to see that a geofenced business is 150% more likely to become a lead than a non-geofenced business.
  3. Search traffic data:  Traditionally we see a 20%+ increase in organic and paid search traffic when we implement our geofence advertising campaigns via our programmatic advertising mediums. Looking at your website’s backend data can really tell a lot about a geofence advertising campaign.  Especially the search data because not all forms of geofencing ads are clickable (OTT and Audio for example), and people will often turn to Google instead of clicking on an ad even if it is clickable (display, video pre-roll, and video in-banner ads).
  4. Vanity metrics, like click through rate (CTR) and view through rate (VTR).  We call these vanity metrics because they don’t indicate success by themselves, but people often get hung up on them.  We view vanity metrics as another good data point to gage people’s interest and engagement at the top of the marketing funnel.
  5. Customer feedback.  Ask your customers if they’ve seen/heard your digital ads and track this info over a long period for time.

What is geofencing?

What are some businesses and organizations that find success with geofence advertising?

Not all businesses and organizations can utilize geofence advertising at the same rate of success.  Sometimes other targeting would be more appropriate, but below is a list of industries that regularly find success with geofence advertising.  It’s also important to note that geofence advertising only works well in the United States of America and Canada due how the technology functions and the varying privacy regulations throughout the world.

  1. Brick and Mortar Businesses
  2. Political
  3. Entertainment and Event Venues
  4. Travel and Hospitality
  5. Restaurants
  6. Business Services
  7. Industrial and Logistics
  8. Medical
  9. Higher Education
  10. Automotive
  11. Retail
  12. Home Improvement
  13. Business that use direct mail
  14. Click for more info on industries we’ve found success with

4 geofence advertising case studies?

Geofence advertising can make sense for companies big and small a lot of times. Below are a few examples of when geofencing has made sense and dollars for our advertisers.  (When geofence advertising doesn’t make sense then we can implement a ton of other targeting tactics like search, contextual, 1st party, 3rd party, site retargeting, look-a-like, and much more.)

  1. 2,984 physical conversions for group of emergency vet clinics
  2. Self Storage deceases vacancies with geofencing
  3. Auto Dealership doing Geo-conquesting
  4. Anti teen alcohol, drug, and smoking campaign.

What about privacy and safety when using geofence advertising?

Using GPS satellite tracking to figure out where someone has been to serve them ads does, on the surface, seem a little invasive, but they are a lot of privacy regulations and decisions we even make to ensure user’s privacy is protected.

  1. We do not collect and have no way to see personal, demographic, historical, financial, or any other similar types of data when using geofencing.  We use a device id to retarget devices  that have been in a hyper-specific location and their cross device matched devices to know which devices to serve ads to, but we don’t see any names, contact info, demographic information, or anything else about those people/devices.
  2. The geofence tracking we use cannot be layered with other targeting tactics like 1st party, 3rd party, search, or site retargeting data.  We can layer some of those tactics on top of each other, but we don’t bring in this other structured and/or unstructured data into a geofencing campaign.
  3. Since we track devices using GPS technology, people can opt our of GPS tracking on their phones. Most Americans don’t do this though because a lot of maps and websites need to or function better when you have GPS turned on, and that’s why 90% of Americans can be targeted with geofence advertising.
  4. We adhere to state and federal laws like Hipaa and Coppa laws.
  5.  We personally do not use look back data where you can see devices that have been at a location in the past before you set up a geofence. We know some places do claim to tap into this information, but this is not something we believe is 100% right, accurate, and will be allowed in the long term.

How do you learn more if geofence advertising is right for you?

There is a lot of great information online about geofence advertising, but some of it is confusing and different.  If you want some specific answers to your advertising questions you can contact us via phone or our contactor form, or schedule a free video conference demo of our tech and how it can be wielded for your business’s needs.