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What’s the difference between geofencing and geotargeting?

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Geofencing is on the rise. The global geofencing market is expected to post a 25% year-over-year growth rate for 2019, according to the  latest market research  by Technavio. And 37% of that growth will come from North America.

So what is geofencing, and how is it different from geotargeting? Read on to find out.

What are geolocations?

A geolocation is an object’s real-time geographic location—most often a mobile device or internet-connected computer. If you have a vehicle with GPS tracking, a fitness tracker, or a smartphone, you’ve interacted with geolocation-capable objects. We use geolocations to get directions, order food on delivery apps, check in on social media, see the weather forecast, and more.

Network routing addresses or internal GPS devices determine an object’s geolocation. However, the internet browser or device in use must support geolocation tracking to work with location-tracking applications.

Server- or IP-based tracking uses Wi-Fi or ethernet connections to collect and read location data attached to a device’s server or IP address. This type of geolocation tracking is best used for location tracking by state or country.

Device-based geolocations rely on GPS and cellular networks to triangulate an object’s location. Device-based location tracking is more accurate in densely populated areas with more cell towers. Under the right circumstances, device tracking can pinpoint a location within a few feet.

Device-based geolocations play a big role in geofencing and geotargeting. A geofence is an invisible, virtual fence that triggers a response each time a geolocation-compatible device enters or exits a geofence. Geotargeting, also known as location-based marketing, uses geofencing to target users in specific geographical locations.

Geofencing examples and applications

Target shoppers who use the Target mobile app may be familiar with geofencing. Each Target store is surrounded by a geofence that triggers app notifications and pinpoints the user’s location within the store. Upon entering a Target store, the app alerts shoppers of deals. Shoppers looking for specific items can use the Target app to navigate the store and locate items on their lists.

But that’s just one example of the many things geofencing can do. On top of assisting consumers with their shopping, businesses can use geofencing for safety, convenience, and marketing. Here are a few more common geofencing applications.

Security

Businesses can use geofencing to protect or contain secure data and information. For example, a computer containing secure information might only be accessible within a geofenced perimeter. Alternatively, users might set a geofence to restrict access to certain apps or devices within a perimeter. Law enforcement agencies can use geofencing to enforce house arrests and restraining orders, locate witnesses and suspects, and more.

Safety

Family tracking apps like Life360 allow parents to set geofences around locations like their home or their child’s school. When kids come and go from those locations, parents get real-time alerts. Pet parents can use apps like Wagz to create virtual fences for four-legged friends and receive alerts if their pets leave the yard.

Geofencing has also been used to protect people living with dementia, assist people recovering from drug or alcohol addictions, and more. Apps like MindMe alert caretakers when patients or loved ones leave a “safe zone” or enter forbidden territory.

Home automation

When combined with home automation apps like If This Then That and Google Home, geofencing can automate household apps. Crossing a geofence can trigger lights, stereos, thermostats, and more.

Augmented reality

Players of Pokémon GO, Harry Potter: Wizards Unite, and other augmented reality games can access exclusive content contained within thousands of geofenced perimeters. Find and cross a boundary to unlock points, hidden items, new levels, and more.

Vehicle tracking

Vehicle rental companies can create a geofence around the city or “safe zone” to ensure their vehicles aren’t going further than they should be. Fleet managers can limit unauthorized vehicle use, reduce fuel costs, and more by tracking fleet activity through geofences. In worst-case scenarios, geofencing can help recover a stolen vehicle or provide fast help for drivers in trouble.

Time tracking

Geofencing for time tracking prompts employees to clock in or out upon entering or exiting a geofenced job site. As employees come and go, managers can see who’s on-site from miles away. Geofencing in the workplace assists with employee safety, productivity, and accountability. 72% of employees who have used geofencing in the workplace report a positive experience, according to a 2018 geofencing survey.

Marketing and advertising

Businesses can use geofencing technology to offer exclusive incentives to consumers nearby or within a specific area. For example, a business owner might set a geofence around a competitor and encourage shoppers to shop elsewhere for a better deal. They might also set a geofence around their own location to encourage passersby to stop in for a look.

Studies show that geofencing alerts for marketing and advertising are effective. 53% of consumers surveyed in 2018 say they have acted on geofence alerts containing special offers or discounts.

Geotargeting examples and applications

Geotargeting, also called location-based marketing, uses geofencing to target people in a geographical space. It delivers targeted content to users based on locations rather than demographics. Let’s take a look at some examples of geotargeting in action.

  • In 2018, Burger King used geotargeting to steer potential customers away from McDonald’s restaurants and towards a Burger King drive-through instead. Burger King app users received an exclusive offer for a 1 cent Whopper as soon as they got within 600 feet of a McDonald’s. Because of this promotion, over a million users downloaded the Burger King app.
  • Sephora shoppers using the Sephora app are offered a virtual shopper’s companion upon entering a Sephora store. The companion has info on new products, special offers, and more. Plus, the app alerts shoppers to unspent gift cards or rewards points, encouraging them to come in and shop.

Outside of targeting competitors or loyal shoppers, geotargeting can catch the attention of large groups of people with something in common. A sporting goods store could use geotargeting to push a coupon or alert to those attending a sporting event nearby. A coffee shop near a college might use geotargeting to push a job opening to students on campus. A boot retailer could use geotargeting to alert country music concert attendees to an upcoming sale.

The difference between geofencing and geotargeting

Geofencing refers to the geofence itself: an invisible, virtual fence that defines the perimeter around a geofenced area. Users set geofences using geofencing apps or software. And geofences are triggered when a geolocation-capable device crosses a perimeter. A geofenced area can be very large or very small, depending on the needs of the creator. For example, a user could place a geofence around a room, a building, or an entire city.

Geotargeting is the result of using geofencing for marketing. Also known as location-based marketing, geotargeting uses geofencing to target consumers in geographical spaces. For example, a used bookstore may place a geofence around a box bookstore to geotarget customers and encourage them to shop locally.

What are beacons?

Beacons are physical, mobile devices that use Bluetooth signals to detect a user’s proximity and send notifications to those in range. Because beacons are low-energy devices that send signals to nearby Bluetooth devices, they don’t receive any data in return. For that reason, beacons don’t carry the same privacy concerns geofencing can carry. They also aren’t a reliable source of location information. Because they rely on Bluetooth technology, they don’t impact the data and battery life of a mobile device in the same way geolocation tracking can. Redefining a beaconed area is as easy as picking up and moving the beacon. But that means beacons can be lost, broken, or stolen easily.

How beacons play a role in geofencing

A business’s needs should determine whether beacons or geofencing are the right fit. While geofencing is used for geotargeting and other geolocation-based marketing tactics, beacons are perfect for proximity marketing. Unlike geofencing, beacons can’t pinpoint the location of a mobile user. Beacons use Bluetooth to detect when a mobile user is within range of the signal and how close they are to the beacon.

Beacons are a good solution for small-scale, indoor location services. For example, a beacon placed in the shoe department of a department store could alert shoppers to a special deal as they pass by. Beacons can also follow “rules” set by the beacon owner. A beacon can be programmed to ping a user 10 seconds after they enter or exit the beacon zone.

The future of geofencing

Geofencing technology helps consumers automate their homes, track employee time, and target demographics with geolocation-based advertising. Well-known companies like Burger King and Sephora have already taken advantage of geotargeting for marketing purposes—to great success. As the technology evolves, more and more businesses and consumers alike will turn to geofencing to enhance their marketing efforts and make their lives a little bit easier.


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