Geo Fencing: Exploring the Power of Mobile Marketing

Geo Fencing:  Innovative and Game Changing

One of the truly innovative and game changing attributes of mobile smart phones is the ability to actively target consumers on the go in strategic locations to influence behavior, specific purchase decisions and generate high quality brand loyalty.  While still in its infancy, the industry term for this type of marketing is called geo-fencing which we profiled in a previous blog post ( and early indicators suggest this approach could profoundly transform consumer expectations and buying decisions.  There are really two main factors inherent to geo fencing.  The first and most pivotal is the knowledge of the consumer’s current location which sets the stage for targeted marketing to promote proximity to a particular store or venue.  But combining geo fencing data with a mix of demographic and psychological profiles, credit card purchase history, loyalty programs and preferences enables marketers to dramatically increase the effectiveness and relevancy of these targeted messages, discounts or special products to individual consumers now and into the future.  Moreover early feedback suggests, as mobile smart phones become ubiquitous, these hi-tech equipped consumers learn to expect and depend on this new marketing outreach and will reward the increased relevancy and personally targeted GPS guided messaging by increasing usage or purchase of highlighted products and services over others.

Geo Fencing:  Grows in value over time

A recent Harris survey commissioned by mobile marketing firm, Placecast underscores the notion that geo fencing driven text messaging is not only effective but gains more value for consumers over time.  Aggregate data from 2009-2012 unequivocally shows that possessing a smart phone heightens consumer’s attitude and usage towards mobile text messaging, access to the internet, search for a retail location, access to local information and activities by three to four times that of feature phone (non-smartphone) owners.

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Smartphone owners use their devices to communicate and search in more ways than owners of plainly featured phones as well as enhance these capabilities by downloading apps and opting in to games, loyalty programs and offers. 77% of respondents reported they were more likely to visit a store when prompted and in one branded campaign for Kiehl’s skin care stores, 73% made a purchase after receiving a geo fenced driven SMS text message. Much can be made about the fact that the phone is always with us and we can be targeted by the GPS functionality. Consumers also reported that mobile discounts and special offers were far more useful and easy to act on vs. paper coupons, emails or letters because these offerings were digitally stored in their smart phone.  The most impactful finding was the fact that consumers enjoy the experience of being marketed to via their smartphone.   Almost 50% of those polled felt that these messages get more valuable because a) consumers expect offers to arrive based on where they are and b) as the messages become more relevant to their personal interests.

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Geo Fencing:  Relevancy is a key factor

Granted, these are only one set of experiences, but the polling data suggests that expectations are changing for customer service over time and as a result, brand loyalty will be affected positively by combining location aware promotions with more relevant and personalized targeting.  But marketers must be careful not to bombard consumers with spam like messages.  Placecast advocates frequency caps of three times per month for any geo-fencing campaign to insure attention and protect brand loyalty.  And consumers report that they are more interested to be prompted about specific discounts and exclusivity rather than generic messages about similar products or services.  Placecast suggests geo fencing promotions should be combined with other media to increase purchases.  Consumers were twice as likely to purchase items prompted by geo fenced text messages when those messages were tied into a broader campaign consisting of other out of home media advertising.

There is another interesting development with geo fencing that bears a mention and that involves finding location relevance.  That is targeting people not only in proximity of the sponsoring brick and mortar store but in seemingly unrelated very public venues such as train stations, airports, sporting events and concerts which provides avenues to encourage and influence future behavior.  While these are the early days of geo-fencing, it is not hard to imagine a world in a few years where competitive geo-fencing will dominate public landscapes such as airports and ballgames with two or more aggressive brands fighting for placement and top of mind on a spectator’s Smartphone.

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Geo Fencing:  Most effective as it becomes more aware

Placecast primarily uses double opt-in programs to determine who receives these geo-fenced prompts and suggests giving customers choice in order to let users know why they will get an offer and that privacy will be respected.  The key is also to enable customers to set preferences for targeting such as desired categories, frequency and time of day.  This not only promotes engagement and usage but provides valuable metadata information for the marketer to improve relevancy which in turn increases activity.

In conclusion, geo fencing has the potential to become one of the most powerful and effective marketing tools to influence consumer behavior because the mobile smartphone is so personal and immediate.   Geo-fencing per se, promotes a type of symbiotic engagement between brands and their customers that, if used creatively, promises to grow exponentially with our dependence on our smart phones and alter our expectations about customer service as well as our future purchase decisions.


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