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Geofencing: A Path to Greener Mobile Marketing Pastures

Barbara Social Media Manager
December 28, 2011

Imagine being able to lure in a shopper, right as they walk by your storefront. You attract them with a virtual coupon that can be redeemed in-store, or perhaps you show up in their top searches as they seek out suggestions via a mobile device. It’s every marketers dream to achieve this level of specificity, to deliver a customized message addressing the consumer’s exact need. But is this even possible? In comes: Geofencing.

Geofencing allows marketers to deliver the right message, at the right time, and to the right person. So how does it work, exactly? A geofence is a user-defined virtual perimeter for a geographic area. Simply put, it is a location-based service that enables a mobile phone user to receive alerts in a pre-defined area, such as a retail store and its proximity. An application server monitors the location of the mobile device and in response to it entering the geofence, it will automatically transmit information (such as special offers or coupons) to the mobile device. Once the user exits the geofence, the particular service is no longer available to the user.

Mobile applications and services are fast applying geofencing technology to enable advertisers and brands to send and receive notifications based on their exact wherabouts, ultimately allowing brands and retailers to drive sales. Particularly successful for retailers, geofencing makes it easy to connect buyers and sellers close to the point of sale, right before the decision process or in some cases, is the driving force into the decision process. For example: the retailer or brand can serve location-based ads and know exactly when the ad is viewed and when the shopper has walked into the store–serving as confirmation of mobile performance for location-based ads.

Geofencing is currently implemented in two ways: via mobile applications or via geofencing platforms.

1. Mobile Applications

Mobile applications use geofencing technology to enable advertisers and brands to connect directly with their audiences. Within these mobile applications, users can:

  • search for nearby businesses and collect coupons, special offers, and more
  • save their favorite search results and businesses and be notified of special offers, if any, when they enter the geofence
  • search by product category & receive business results based on the mobile device’s location
  • get served location-based banner ad units that advertise local businesses & products relevant to the mobile user’s location & the category or search result they come up with

2. Geofencing Platforms

Platform based services can also implement geofencing technology that create programs to target millions of mobile subscribers with a variety of brand coupons or deals. These discounts would be sent through operators, but the difference here is that users would have to opt-in to the programs to receive messages based on preferences and other information they’ve submitted. From there, messages (like SMS notifications) can be customized based on a brand’s marketing needs, and can even leverage external factors such as weather, traffic, and shopping areas.

Limitations to both:

Of course, with any new technology, there are still a few kinks to be worked out:

  • With mobile applications, the geofencing capabilities are device specific as well as specific to users subscribed to a smartphone. And depending on the device, the GPS accuracy varies and the range of the geofence might not be accurate.
  • With platform based services, implementing the geofencing and notification services can be difficult as the brand needs to align with Aggregators, and individual brand campaigns will require a dedicated shortcode throughout the different carriers.

Despite these limitations, it is only a matter of time before marketers find a way around them and create the perfect, serendipitous moment between a brand and a shopper! For more information on how Velti can help drive awareness, customers and revenue through geofencing and various other mobile marketing campaigns, visit the Velti mGage™ page.


If you’ve implemented geofencing technology into your mobile marketing solutions, or have additional thoughts on geofencing, leave your comments below!

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