Geofencing vs. Geotargeting - What's the Difference?

For local businesses, location data can be an effective and valuable marketing tool to help you reach your target audience. As consumer groups change and advertising becomes more expensive, location-based data allows you to advertise to audiences more likely to become customers – instead of marketing to those who are unlikely to buy from you.

Geofencing and geotargeting may sound similar, but they have two very different meanings. This article explains what they mean and provides the benefits of each.

What is Geofencing?

Geofencing marketing, or advertising, refers to setting up virtual boundaries that track whenever someone with a mobile device enters or exits. When this happens, it sends a notification to that device advertising local deals, products, services, or businesses. Geofencing allows you to target nearby people based on their location.

What is Geotargeting?

Geotargeting is the standard targeting strategy of Google Ads, also known as Pay Per Click Marketing. Geotargeting goes a step further than geofencing by delivering content to users who also fit a specific target audience – it’s not just based on a person’s location. The main difference with geotargeting is that it allows you to also focus on demographics, behaviors, interests, and location.

Read More: What’s the Difference Between Local Service Ads and Google Ads?

Geofencing vs. Geotargeting

Geofencing and geotargeting are both part of location-based marketing, but they serve different purposes. Geofencing is simply drawing a virtual boundary around a specific area. Geotargeting includes geofencing, but it also involves using other factors to reach your target audience.

Geofencing and geotargeting allow you to drive engagement by sending relevant messages to people in a specific area. Both can be done on smartphones, computers, tablets, and even gaming devices with internet access. The location data used to power these marketing strategies is gathered through various technologies, including IP addresses or GPS.

Benefits of Geofencing

• Reach Customers – Geofencing helps you reach and engage potential customers with text and app alerts.
• Provide a Personalized Ad Experience – Geofencing allows you to personalize ads to people in a specific area – and 71% of consumers say they prefer a personalized ad experience.
• Boost Local Sales – Send ‘push’ notifications to target consumers in your area, change promotions, or advertise limited-time offers to boost local sales.
• Entice Customers Away from Competition – Use geofencing to offer promotions and entice them away from your competition.

Benefits of Geotargeting

• Better Budgeting – You can make your ad budget go further by segmenting your target audience beyond location and including customer behaviors and interests. Geotargeting is effective because your ad is only displayed to consumers who are more likely interested in your product or service.
• Excellent for Expanding Small Business – Geotargeting helps small businesses test new geos by showing personalized ads to the target audience (something you can’t do with geofencing). This ability is beneficial when you’re unsure about the area’s buying potential.
• Increased Optimization Potential – By analyzing your marketing campaign performance based on location, you can focus your marketing on the areas getting the best results.
• Build Local Reputation – Geotargeting is an excellent way to build a positive reputation as an industry leader in your community. You earn trust and loyalty by building relationships with consumers in your service area.

What is Digital Listings Management?

Managing and streamlining communications can be challenging if your business has a presence on multiple platforms. Digital Listings Management (DLM) locates, verifies, and updates your business information to ensure consistency across all platforms. With DLM, your business will perform better in search results, and your customers will have complete and accurate information about your business.

Bottom Line

Location-based marketing using geofencing and geotargeting have become a standard strategy for online advertising. Understanding the differences and how to use them to your advantage can lead to successful and profitable marketing campaigns. At Impact Group Marketing, we use geofencing and geotargeting to create a digital billboard for your business that targets potential customers. Contact us today for a free consultation or to learn more about our services.