What Is Geofencing? Marketing, Workplace, and Personal Uses

When Coca-Cola wanted to boost sales, it turned to geofencing. Partnering with location-based marketing company Tiger Pistol, it served Facebook ads to people in airports, bus stations, college campuses, and other high-traffic areas. The ads directed users to nearby Coca-Cola vending machines, resulting in a 25% increase in sales compared to sales at non-targeted machines.

Geofencing aims to attract and engage potential customers based on location. It enables businesses to serve targeted ads, send timely push notifications, and deliver personalized messaging users can act on immediately—all while respecting their privacy. You can use geofencing to attract new customers and even convert your competitors’ audience. Here’s how to deploy geofencing in your marketing strategy to influence customer behavior.

What is geofencing?

Geofencing technology creates a virtual boundary around a specific location in the real world, letting you trigger actions—like notifications, alerts, or automated tasks—when a device enters or exits that area (i.e., crosses that virtual fence). 

Marketers often use geofencing to generate foot traffic to physical stores. User-defined geofencing occurs when customers opt into location-based alerts through a vendor’s app. For example, if somebody enters your brick-and-mortar store while using your app and has allowed location access, the phone can detect the virtual perimeter and deliver offers. If the shopper belongs to your customer loyalty program, you can personalize those ads and use your app to guide them to find the item they’re looking for.

For Burger King’s Whopper Detour campaign, the brand famously used geofencing to target customers near McDonald’s locations. It offered a 1¢ Whopper to anyone within 600 feet of a McDonald’s and promoted the deal through nearby billboards, leading to a surge in Burger King app downloads.

Apple’s EasyPay once used geofencing to enable self-checkout through the Apple Store app. Today, Apple uses the same tech through the built-in Wallet app to automatically display appointment or pickup details when visitors arrive.

Personal and workplace uses

Beyond marketing, you can use geofencing for many personal and workplace uses, including:

• Setting reminders. Receive push notifications from your reminder app when you leave work or arrive home.

• Turning on focus mode. Automatically enable do-not-disturb mode when you get to the office.

• Enabling security measures. Restrict company devices to connect only within designated buildings.

• Photo sharing. Automatically share photos with friends and family at specific events or locations, such as at a wedding.

• Child alerts. Receive notifications when your children arrive at or leave school without tracking their exact location.

• Fleet management. You can use location-based technology in cars, vans, and trucks for fleet management geofencing. Track company vehicles, automate check-ins at base, and adjust geofences based on GPS coordinates to avoid traffic congestion.

• Employee time tracking. With geofencing software installed on staff members’ mobile devices, you can automatically remind them to clock in—or log them in and out—based on their location.

• Triggering safety alerts. Geofencing can help keep workers safe on job sites or premises with hazardous materials. For example, you can track when an employee’s mobile device enters or exits a hazardous area, trigger alerts if they stay too long, or automatically shut down machines when someone enters a restricted zone.

Types of geofencing technologies

• GPS-based geofencing
• Radio-frequency identification geofencing
• User-defined geofencing
• IP address-based geofencing
• Beacons

Geofencing works through several different methods, each with unique advantages depending on your use case and required accuracy.

GPS-based geofencing

The most familiar geofencing technology is a global positioning system (GPS). It relies on a chip and antenna in your device to detect signals from satellites in geostationary orbit (satellites fixed over the same point on Earth). Your phone calculates its position using triangulation by measuring the timing of signals from several satellites.

Wi-Fi-assisted GPS improves speed and accuracy by referencing a database of known Wi-Fi networks and their locations. This gives your device a rough starting point, helping it to lock onto the satellite signals faster by narrowing down which satellites to expect overhead.

Radio-frequency identification geofencing

Radio-frequency identification (RFID) geofencing works differently. Whereas GPS relies on satellites, RFID instead uses passive chips—like the anti-theft tags retailers attach to clothing—that activate when they pass through a radio-frequency field. These chips briefly power up and transmit a unique ID. While RFID has a short range, it’s useful in warehouses, for example, where geofencing can detect tagged items as soon as a truck arrives.

User-defined geofencing

Geofencing doesn’t let you track people remotely—like a GPS tracker on a car in a spy movie. It works the other way around: a mobile app tells the phone to trigger an action when it enters or leaves a specific area—from a point location to an entire neighborhood. The phone’s operating system handles the location check and triggers the event. Data collection is optional.

For example, say as a customer you’ve installed a brand’s app on your phone and want to get notifications when you’re near one of its stores. The app registers store locations (geofenced areas) with the phone. The phone then monitors its own location in the background, and when it enters a geofenced area, it tells the app, “Hey, we’re here—do your thing.”

In other words, the app doesn’t track your every move. It only knows your location when you enter a registered area. However, if you have granted an app permission to access your location, it can check your location anytime you open it and use or share the data. This is not specific to geofencing; it’s a general privacy consideration with any location-aware app.

This means, if you want to use geofencing for marketing, the user must download your app, permit it to use your phone’s location services, and allow notifications. There’s no way to send the user a geofenced alert without an app to deliver it.

IP address-based geofencing

IP address-based geofencing determines a user’s location based on their IP address (the network identifier assigned when they connect to the internet). When someone visits a website, the site can approximately infer their device's location based on this IP data, i.e., where they’re connecting to the internet. This is how video streaming sites enforce region-based content restrictions. It also lets you serve ads only to target users in a specific geographical location. 

The key advantage of IP-based geofencing is it works entirely over the internet, without requiring customers to download an app or opt in to location services. This makes it easy to implement and frictionless for the end user.

Beacons

Beacons aren’t technically geofencing, but a related technology often used in conjunction with geofencing. A beacon is a small, standalone Bluetooth device with geofencing capabilities. Like a Bluetooth speaker, it is detectable by nearby phones—and detection can trigger an event.

Beacons don’t require user tracking. Instead, the users’ smartphone passively detects the beacon when it’s close enough. Beacons also offer higher location accuracy than GPS indoors and use no cellular data. The tradeoff is that you need to deploy beacons at each physical location, keep them charged, and secure them (by mounting them out of reach or attaching them firmly to a surface).

For example, a store could place a beacon near the fruit section to trigger in-app offers. At a trade show, a beacon inside a booth could prompt company info to appear for users of the event’s app.

4 geofencing-enabled marketing strategies

1. Loyalty offers
2. IP address-based ads
3. Get creative with locations
4. Capture competitors’ customers

Geofencing can help attract customers to your stores or business locations, make your online ads more targeted and cost-effective, and even let you leverage your competitors’ locations to your advantage. Here are four ways you can use geofencing to boost your marketing efforts: 

1. Loyalty offers

If you have a retail store, you may already offer a loyalty program for in-store shoppers. With geofencing, the app can alert users when they’re near a location and display an offer to draw them in. Once inside, beacons can trigger targeted offers as they move through the store, driving customer engagement.

2. IP address-based ads

If you buy online ads, use geofencing to deliver targeted advertising only to a specific location—whether you operate in one town or across a state. Your campaign will only serve ads to folks browsing the web in that particular region, helping you save money while delivering more relevant messages. For example, local search terms like “cookware store in Vacaville” typically cost less than broader ones like “cookware store.”

3. Get creative with locations

Don’t just geofence your business locations. If your customers include business travelers or vacationers, consider geofencing airports, hotels, and conference centers in addition to tourist hotspots to engage customers. You can use either location-based ads or by including those locations in your app.

4. Capture competitors’ customers

Just like you can bid on ad keywords tied to a competitor’s name or products, you can geofence their locations to trigger offers through your app when users enter the area—just like Burger King did for its Whopper Detour campaign. Combine this with location-based ads—both physical and online—and you can increase foot traffic and drive new users to download your app and access deals.