While Geofencing and geotargeting sound the same, they are actually quite different. Both marketing techniques use a customer’s location to deliver specific content. They use the location to deliver highly personalized advertisements to increase the chances they will buy what you’re trying to sell.

Geofencing: Gathering the Customers in a “Fence”

Geofencing advertising involves using an invisible “fence” to deliver location-based advertisements. Businesses can deliver advertisements to everyone within a certain area to ensure they are reaching a specific market. An example would be Toyota sending out advertisements to everyone at a car show.

Toyota would create a geographical area that would receive the advertisement. So, everyone who had their locations services turned on or visible at this car show would get the advertisement.

Geofencing ads are also more accurate the geotargeting because it relies on GPS to determine where the consumer has been and whether or not they return to the location. It can also improve engagement within local communities. When people are closer to the locations that are delivering the ads, they are more likely to make a purchase.

The disadvantage of Geofencing marketing is that is relies on the customers location, rather than their demographics. So, as a company, if you are targeting a specific demographic (such as women in their 50’s) then this may not be the technique for you.

Geotargeting: Using Demographics and Location

Geotargeting advertising also involves sending advertisements to a certain location, but only people within a certain demographic are targeted. So geotargeting focuses on specific demographics within a specific area. As a result, companies can send highly personalized advertisements.

An example of geotargeting would be a local landscaping company sending out a targeted ad in a certain area to homeowners. If they were to just use Geofencing, they may be wasting advertisements on older people in nursing homes or younger people in apartments.

Geotargeting, however, will provide a smaller audience to target the ads towards. Though they will have less prospects, they will have a highly customized group of people to ensure that they are reaching who they want to reach. Sending advertisements to this specific group can increase the chances of a sale.

Location based advertising: Proximity marketing and proximity advertising

When choosing between geotargeting and geofencing, make sure to understand the pros and cons of each. If you were wanting to reach people, like a group coming into town for a conference and staying for a few days, you would want to use geofencing because you may not know specific demographics for that crowd.