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Geotargeting versus geofencing: What’s the difference and which one do you need?

Location-based targeting is a marketing strategy you can’t miss out on. Many people use the terms geofencing and geotargeting interchangeably, even though there are major differences. Let’s take a look at when and how to use geotargeting and geofencing in your marketing.

Why use location-based targeting at all?

The key to marketing is sending out the right ads to the right people, but that’s often easier said than done. Consider how much work goes into a marketing strategy. You’re dealing with things like customer data, contextual targeting and A/B testing just to make sure your ads hit right. And though you can include demographic information into your strategy, you won’t get the full benefit without location-based targeting.

What’s the difference between geotargeting and geofencing?

Geotargeting vs. Geofencing
While these two strategies sound similar, there are significant differences.
Geotargeting is when you take a large geographic area, such as a city, state or even an entire country, and only serve ads to your audience within that area. The main purpose is to bring awareness to your brand, brick-and-mortar locations or geographically specific promos or products.
Geofencing, on the other hand, focuses on a much more precise location, such as a specific address. While geotargeting brings more customers to your brand and stores, geofencing encourages sales by serving coupons and sales alerts.
The most significant difference is the type of customer that receives the ads. With geotargeting, you can select a specific type of customer who will see the ads based on demographics and other customer data. However, with geofencing you target any and all customers that enter the geofenced zone.

Which one should I use?

Geotargeting vs. Geofencing
That depends on your goals.
For example, if you want to target customers that will purchase snowplows, then you only need to advertise in the states that see heavy snowfall. Using geotargeting enables you to serve your ads to the specific audience segment and earn more qualified leads.
Listen to how Mary Martinez, director of marketing for Horizon, uses geotargeting to bring customers to Horizon’s brick and mortar locations.

On the other hand, if you want to send a specific advertisement to customers once they enter your business, you can set a geofenced parameter surrounding your store. This encourages customers to shop and increases sales.
Geofencing is also useful for conquesting, a marketing tactic that serves ads or special offers to prospects in a competitor’s location, drawing them to you instead. 
Here’s a quick video that shows geofencing in use:

 
[There’s also a great geofencing case study right here.]

Can you use geotargeting and geofencing together? 

Geotargeting and GeofencingYes, you can!
When you want to bring customers to your location and encourage a certain action, then you can combine both tactics for the ultimate location-based marketing strategy.
Let’s say you’re hosting an event showcasing multiple products that you sell. Set a large, geographic area to target audience members and bring them to the event. At the time of the event, set a geofenced area around your business location to serve ads that encourage attendees to fill out forms, check out specific equipment demos and make purchases for a promotional rate.

Conclusion

Geofencing and geotargeting each have their own purpose, whether it’s increasing brand awareness, drawing customers to your store or encouraging sales. These two tactics also work well together to help you meet your business goals.

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