1. What is geofencing?

What is geofencingGeofencing refers to the process of using a geofence to target mobile users. Marketers use this technology to collect information about and target their customers as they enter, leave or stay in specific areas, known as geofences.

2. What is a geofence?

Now, what is a geofence, you ask? A geofence is a virtual perimeter marking a real geographic area. You can see it as a virtual fence. The area it surrounds can be as big as a city, or as small as one building. Geofences can take different shapes. For more straightforward use cases it could be round. For complex situations, marketers could build polygon shaped geofences.

3. What can marketers do with geofencing?

On average, a mobile app loses 96% of its users within a year of its initial download. Keeping users engaged is difficult – due to the overload of commercial messages they receive, users filter out the noise. They only respond to what’s really relevant to their current mood and setting. Geofencing can provide a lot of insights about user’s context and surroundings, which can help marketers adapt their communications accordingly.

It can help marketers:

  • Collect location insights about user’s offline behaviors for audience segmentation, personalization, retargeting, competitive intelligence, and online to offline attribution.
  • Send location-relevant content to mobile users based on their current or recently-visited location, in order to drive their engagement with the app.

4. How is geofencing used in different industries?

Geofencing can be used in many different ways. Here are some examples of how marketers in various industries already get creative with geofencing:

Retail:​ Sending promotional messages as shoppers pass by a store to drive visits.

Automotive​: Retargeting users that have visited a car dealership (yours or competitor’s).

Coupons​: Proving the ROI of coupons using location data to track store visits initiated by coupons.

Airline​: Upselling flyers with fast-track services as they walk in the airport.

Mobile​ ​payments​: Reminding users of places where they can pay as they visit them.

Hospitality​: Capturing feedback shortly after visitors step out of the hotel.

Travel​: Enriching user profiles with travelling history to supercharge future targeting.

Dining​ ​reviews​: Suggesting a list of popular dishes to a guest who visits a particular restaurant.

Coffee​ ​chain​: Giving discounts to returning customers to build loyalty.

Online​ ​store​: Geo-conquesting competitors locations with deals to lure customers away.

5. What location technology is used for geofencing?

The general functioning of geofencing is that it uses location services to detect a user’s device within the predefined zone – the geofence –  in order to trigger a notification or track visits. Now, which location services are used to do this can vary depending on the provider. Geofencing can use:

  • Cellular
  • WiFi
  • GPS

While Cellular and WiFi are recommended for their reliability, GPS-based solutions are not. They are accurate, but this technology has proven to be extremely battery-draining.

6. How does geofencing compare with beacons and geotargeting?

Geofencing, geotargeting and beacons are all used for location based marketing. Different providers choose to rely on either one or several of these technologies. However, the difference lies in the way they generate location data and their target range. The table below addresses the differences between the technologies and highlights how they are best used.




Location Technology

IP-address Bluetooth Cellular/Wifi

Target Range

Large(state, zip code) Small(store aisle, bus stop) Medium to large(store, neighborhood)

Real-Time Targeting

No Yes Yes

Best For

Browser marketing Mobile & app marketing Mobile & app marketing

Location Data Collection

No Yes Yes

Hardware and Maintenance

No Yes No


7. What should marketers know about geofencing and privacy concerns?

Geofencing relies on location services which naturally brings up customers’ concerns about companies accessing their location data. So here are a few things to guide you in this area:

  • The power is always with the customer. Geofencing requires customer’ permission to share their location data. Customer can easily revoke this permission at any time.
  • The key is being transparent. You need to explain to your customers why you need to access their location. They will be more willing to support you if they know why you are using their information.
  • The rationale behind you accessing and using your customer’s location and mobile phone data is important: it must benefit the customer experience, not just you.
  • Provide security to keep customer data safe.
  • As an app, you need to have a privacy policy that communicates all the assurances you deliver to your customers. It needs to be clearly documented and available online.
  • When communicating with your customers about location sharing, your choice of words is crucial, it can take all of their concerns away or scare them away.

8. What to pay attention to when choosing a geofencing partner?

  • It​ ​shouldn’t​ rely ​on​ ​GPS​ – GPS will drain your app users’ battery in no time.
  • It​ ​should​ ​be​ ​optimized​ ​for​ ​accuracy​ ​&​ ​battery​ ​usage​ – a good solution has a well-optimized balance between the two. Those that are extremely accurate come with battery drainage on the flip side, causing users to uninstall your app.
  • It​ ​should​ ​offer​ ​location​ ​data​ ​collection​ – geofencing is increasingly focusing on collecting data about users’ offline behavior to target them in a more personalized way. Solutions that just offer geofencing push notifications will soon be considered primitive.
  • It​ ​should​ ​allow​ ​easy​ ​geofence​ ​management​ – A good geofencing solution comes with its own dashboard and API, making it easy for marketers to create, manage and optimize their geofences
  • It​ ​should​ ​come​ ​with​ ​anti-spam​ ​tools​ – This is especially important for marketers that want to target app users in dense city areas with a lot of geofences and want to avoid sending too many notifications

9. Is geofencing right for my business?

As with everything, geofencing may not fit every company’s mobile marketing strategy. In our experience, if a marketer can relate themselves to one of the examples below, it’s most likely a fit.

  • My company has brick-and-mortar locations, such as retailers, food & beverage chains, airports, airlines.
  • My company has clients with brick-and-mortar locations, e.g. media sellers like coupon and flyer aggregators, reviewing platforms like Tripadvisor and Yelp, credit card companies connected to specific merchants.
  • My company has a strong connection to brick-and-mortar locations, such navigation platforms, travel guides, online retailers with offline competitors.

10. How to get started with geofencing?

If you’re interested in using geofencing technology, here are 5 practical steps to help you get started:

  1. You need to have an app.
  2. Choose a fitting geofencing software.
  3. Test this software (many come with a testing app).
  4. Implement the software into your app (you may need development help with this).
  5. Get creative with your geofencing notification campaigns.


This article by Maria Golovanova appears here.

I agree to have my personal information transfered to MailChimp ( more information )
Are you interested in creative RTLS and IPS solutions? Would you like to be kept in the loop? Subscribe to receive our twice-monthly newsletter containing the latest news on proximity detection technology.
We hate spam. Your email address will not be sold or shared with anyone else.