GeoFencing is often presented, packaged and sold by Radio & Newspaper salespeople as an ideal solution to what small businesses have always dreamed of: blocking customers from going to their competitors and bringing them to their door.

The idea behind geofencing is to pre-establish a physical location and target smartphone users with ads. It’s sold as the way to come in and swoop customers directly from your competitors. It’s also wildly overstating its potential.

GeoFencing Basics

Those agencies that offer geofencing (or package and sell geotargeting this way) will often try to convince their clients that it’s a surefire way to get more local customers. The idea behind it is rather simple, and sellers will tell you that’s what makes it so great.

Here’s how they sell it… For instance, let’s say you choose the store of a direct competitor. Through geofencing, you can show ads for your store to the people who are already present at your competitor and show them better offers. They’ll look at the ad and say “Hey, wait a minute. This other store has better deals. I should go there.” Except… does that actually happen?!?!?

The Truth about GeoFencing

The idea of targeting ads based on location is nothing new, not even in traditional advertising. It’s really… Advertising & Marketing 101.

Geofencing is actually…  very similar to Geo-Targeting: which is the practice of delivering content to a user based on his or her geographic location. This can be done on the city or zip code level via IP address or device ID, or on a more granular level through GPS signals.  In today’s world, geotargeting is usually executed via Google Ads which are Pay Per Click ads that show up at the top of search results when you’re doing a Google search for a local service or product.  

Geotargeting is great… and Geofencing can be good… if you know what you’re doing.  If you don’t, you can really miss the mark with your Advertising dollars.

For one thing, Geofencing limits your engagement possibilities. Choosing to target based on an area may potentially get your ads to thousands of people each day, but choosing something more specific like a store? Probably a few hundred, at most.

If your target audience is already in your competitors’ store, it’s far more likely they are already ready to buy and not just shopping around. Geofencing relies on the idea that the ad can be so compelling that they stop mid-process and go to the better store, except there is no proof that anyone would do that. Plus, there is no guarantee the ad will show while the customer is still at the competing store – maybe they’ll see it a few hours later when they’ve already made their purchase. And that’s ad money down the drain.

The Better Option

Don’t get sold on a fancy term, like “GeoFencing” that cannot deliver on its promises. Targeting ads takes a lot more than just choosing a location to run an ad campaign.

We can help you build a solid strategy and execute an ad campaign that will help you achieve a positive advertising ROI.  Reach out to Sprout Media Lab for ad targeting strategies that work… or give us a call for a no obligation, consultation at (800) 617-6975 today!