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Geofencing: Busting the Myths

Updated: Jul 15, 2022

We’ve all been told more than once that we should think outside the box, color outside the lines. When it comes to creativity, nothing could be closer to the truth. When it comes to advertising, it doesn’t have to be. Sometimes that box is right where you want to be! Or at least, it is when it comes to advertising.

Remember when our math teachers used to tell us that we wouldn’t have a calculator everywhere we go? The jokes on them Not only do we take our calculators with us everywhere we go but we take our GPS too. This means no matter where we are at, as long as there is a working cell tower nearby, our location can be found. This is exactly what savvy marketers have learned to use to their advantage and why thinking inside the box has become so important. We call that thinking, geofencing!

Geofencing is the use of GPS or RFID technology to create a virtual geographic border, which allows the software to respond when a mobile device enters or quits a certain territory. Depending on how it is configured, a geofence can deliver mobile push notifications, SMS messages, or warnings, target social media advertising, follow vehicle fleets, deactivate specific technologies, or provide location-based marketing data.

Over time, some myths and falsehoods have risen up about geofencing and today, we want to lay those stories to rest.

Myth Number One: Geofencing is Ineffective

First and foremost, the data from geofencing is much easier to obtain than the data from magazine ads or billboards. Businesses can easily use that data to track the effectiveness of their geofence-based advertising. ​​According to studies, geofencing is far more successful than other mobile advertising tactics. For retail coupons and restaurants, the Click Through Rate for geofencing-based push notifications is about fifteen percent. However, the Click Through Rate for general push notifications was just around two percent, and mobile banners had an even lower Click Through Rate of less than one percent.

Consider the 2018 “Whopper Detour”. People who were within six hundred feet of most McDonald's outlets between December 4 and December 12 received a smartphone notice offering a Whopper for one penny. Following their order, the app guided them away from McDonald's and toward the nearest Burger King location to pick up their meal. This resulted in over 1.5 million app downloads making the Burger King app the most popular app in both Google and Apple’s play stores. That was a thirty-seven percent increase in just six days! The monetary impact was huge as well, with Whopper Detour users spending around fifteen million dollars more each year on the BK app.

Myth Number Two: Apps Need to be Active for Geofencing to Work

One of the biggest myths about geofencing is that the app using geofencing needs to be running either directly or in the phone’s background in order for geofencing to be able to do its thing. This is not necessarily the case, so long as the correct permissions are activated. If location monitoring is enabled for the app, the app can use SDK technology to tell if a customer is in or near a store’s vicinity in order to push notifications to the app. The user then sees the notification pop up on their home screen.

Myth Number Three: An App is Required to Use Geofencing

Another myth is that your company can only use apps to send notifications to potential customers in your store or to drive them to its vicinity. Geofences may be utilized without an app by using digital ad networks to acquire clients' latitude/longitude or zip codes. Another option is to obtain mobile location data from telecoms companies that have been triangulated using cell tower signals. You can then send an automated SMS to potential customers within your geofence. That being said, triangulating potential customers’ locations using this method is less accurate than using the SDK location data within an app.

Myth Number Four: Geofencing is a Battery Killer

Despite earlier our joke about always having a GPS in your pocket, the GPS is not the only way a phone can be used to verify a person’s location. The technology frequently uses Global Positioning Systems (GPS), but it may also employ other data streams such as RFID.

RFID is a technology that employs electromagnetic fields to automatically identify, and track tags attached to things. An RFID system is made up of a small radio transponder, a radio receiver, and a radio transmitter. When activated by an electromagnetic interrogation pulse from a nearby RFID reader device, the tag communicates digital data back to the reader, often an identifying inventory number. Although the tag is powered by the signal sent by the mobile phone, because it is not long-distance and takes a short length of time, you should not notice a significant battery depletion.

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