Location Marketing: When to Choose Geofencing, Geo-Targeting, or Beaconing Services

 

Location Marketing

Sometimes, even the most experienced tech enthusiasts can feel like a confused elderly lady trying to use a MacBook Pro with Linux when it comes to understanding the latest technological advancements. Location-based marketing is already taking shape, with numerous tools that provide the chance to send highly relevant and localized messages to customers based on their current location. But what are these options, and how do they work?

Here’s a snapshot of the current location-based marketing scene. It’s essential to recognize that many of these terms are still evolving, and their meanings are being established. For instance, geo-targeting is often used interchangeably with location targeting at this time, but that could change. As technology and its applications continue to develop, the terminology may also shift. But don’t worry, we’ve got all the insights you need right here, right now.

Location-based targeting terms to know:

Geo-targeting:

Geo-targeting, which can also be written as geotargeting or geo-targeting, refers to identifying a user's location and providing them with tailored communications relevant to that area. These communications can take the form of advertisements or other types of content, such as emails or location-specific push notifications. Typically, geo-targeted messages are sent via text or push notifications, and they may also appear when you access a particular app or social media platform. The primary advantage of geo-targeting is its ability to offer a more personalized experience.

Geo-targeting

Merging geo-targeted content with data on user habits and preferences enables you to zero in on particular segments of the population while excluding others you don’t want to engage. This method empowers you to reach users wherever their devices may lead them.

How does geo-targeting work?

In its most fundamental definition, geo-targeting utilizes IP addresses to identify users' locations. Every internet-enabled device has a distinct IP address, serving as a digital address for your computer, tablet, phone, or wearable gadget. The first three digits denote the country code, and the following numbers specify particular regions within that country, down to the state, city, and postal code level. If you want to explore the technology behind geo-targeting further, techsavvy is an excellent resource.

How you’re already experiencing geo-targeting

Whenever you see a Facebook ad for a local nail salon instead of one located far away, like in Timbuktu (unless you reside there), it’s because Facebook’s advertising system recognizes your proximity to that business.

Geofencing

Geofencing establishes a virtual "fence," simply a specific location defined by the marketer. While geo-targeting gives you finer control, letting you pinpoint or exclude specific users within a location (say, based on their demographics), geofencing is broader, encompassing everyone who enters the defined area. The idea behind setting up a geofence is to send targeted messages within a particular zone and context, much like geo-targeting but with improved precision. For example, retailers might employ geofencing to engage with potential customers as they walk near a store.

Geofencing

How does geofencing work?

Geofencing primarily employs GPS technology (which connects with your phone's small chip) to create a virtual barrier around a certain location. When a device enters (or exits) the space defined by the fence, triggers are delivered, and the user receives a message, such as a text or push notification (assuming they have opted into those channels).

How you’re already experiencing geofencing

If you have a smartphone, you can start using location-based reminders right away. For example, you might instruct your phone to alert you when you’re near the frame shop, preventing your new art piece from becoming a long-term resident in your trunk. Moreover, if you’ve attended a concert recently and received a push notification from the band to buy some merchandise while you’re there, they’ve likely taken advantage of geofencing technology.

Beacons

Beacons are compact physical objects, generally smaller than two square inches, that can be placed in chosen areas. Their main purpose is to sense your presence, or more specifically, the presence of your device, as you come into their range. These beacons do not transmit any content by themselves. Like geofencing, they activate a signal when you are close, leading a server to send a push notification, text, in-app message, or, less commonly, an email.

Beacons are also known as BLEs, or Bluetooth Low Energy, which is what fans of the technology like about them. The low-energy bit indicates that the batteries in a beacon will endure for a long time. The Bluetooth feature implies that beacons can be used for marketing even in locations with no Wi-Fi or intermittent phone connection.

Beacons

Bluetooth is a budget-friendly technology that anyone with a smartphone can use, but it does necessitate that the user has Bluetooth switched on.

Beacons are not equipped to recognize your identity, recall where you were just moments ago, or anticipate your next destination. They operate as compact, fixed devices that react: as your device approaches a beacon, it activates a signal, and your app—if it has notifications enabled for that beacon’s location—starts to interact with you. When you move beyond the beacon’s reach, the connection is essentially over.

How do beacons work?

Bluetooth technology costs less than GPS and WIFI. While Bluetooth makes beacons fantastic, it also has a drawback: Many people turn it off when they're moving around the world. Estimate, a beacon vendor, does an excellent job of describing the physics and math of how beacons work.

How you’re already experiencing beacons

You might have encountered beacons before, but it’s not guaranteed. To use them, there are multiple permission levels to navigate. First, you’ll need to have the app for the store (or concert venue, etc.) installed, enable location services, agree to receive notifications and keep your Bluetooth turned on while you’re on the move.

When to use geo-targeting vs. geofencing vs. beaconing

Geo-targeting, geofencing, and beaconing are most effective for connecting with individuals who reside or frequently travel within a specific location, especially when you have additional insights into their preferences or demographic details. These strategies are particularly useful for identifying users who are near your store, venue, or service, including those in your parking lot or those entering a shopping mall.

Geo-targeting Geo-fencing  Beaconing

Ideal for connecting with individuals who are located in specific sections of your store, travelling on particular buses or trains, or navigating through spaces such as museums. This approach also targets users within a wider geographical area, such as those residing in a specific zip code.

Engages users within a radius of approximately 50 meters, pinpointing their exact location with remarkable precision—down to nearly an inch. Additionally, it can integrate various preferences to refine user targeting for enhanced accuracy.

This approach is quite straightforward: it doesn't allow for the combination of different user preferences. It primarily depends on the IP address for location data, while also utilizing GPS and, to a lesser extent, Wi-Fi. Bluetooth technology plays a significant role as well. When it comes to geo-targeting, the precision of location isn't as critical since other preferences help narrow down your audience. For instance, you might target individuals in this town who are women over 50 and interested in healthy living. While this method provides some level of accuracy, it may also include users who are merely passing through the area, alongside those who have intentionally visited, which can be beneficial or detrimental based on your campaign goals.

Those who walk by your organic health bar Beacons are remarkably observant and capable of recognizing when patrons go up or down stairs or explore particular aisles. A prime example would be anyone who stands in front of the matcha for 10 seconds or longer.

Location-based targeting, privacy, and your relationships with your users

Discussing location-based marketing inevitably leads to the topic of privacy.

Concerns about privacy and security are frequently seen as the key obstacles that prevent location-based services from thriving. A significant early backlash arose when Nordstrom tracked customers in its physical stores for market research, with many shoppers labelling the practice as "creepy." This term remains prevalent in conversations about the uneasy feelings that can accompany location-based marketing efforts.

A lot of questions remain unsolved. For example, when it comes to anonymity, is it acceptable for trackers to collect data but not be able to identify the user? Security and privacy concerns exist, as does the possibility that one company will share information with another. There are questions of choice: should customers always have to opt in, or may opt-outs work as well? There are questions concerning who may and cannot be trusted with these services, such as your firm vs the United States government.

The answers are still to be seen, but there is one no-brainer in all of this; one best practice that can guide any brand's location-based marketing decisions: ask your people. Explain why you want to target them, how you intend to utilise their information and offer some assurances about how you will not use it. Ask for feedback through simple polls, or try conducting some market research on your target audience. Determine what your users most want. Then respect it.