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Statistics Reveal the Best Geofencing Tactics to Grow Your Business

November 9, 2020 by Reveal Mobile

Geofencing marketing has earned its place in the digital marketing mix through the establishment of best practices and consistently driving reliable results. Reveal Mobile recently surveyed 116 digital marketers at agencies and brands across the U.S. to provide a clear view into how marketers use location data in marketing and advertising.

Digital marketers see opportunity for geofencing marketing and geotargeted advertising in a wide range of industries. When thinking about various retail segments, it’s logical and effective to focus on multi-location units with high foot traffic volume, such as grocery, restaurants, entertainment, and the like.

Geofencing Marketing by Industry

More than 50 percent of marketers surveyed see restaurants and bars as prime locations to target for purposes of driving foot traffic. Health/beauty/fitness, entertainment, grocery and pet stores round out the top five retail locations for geofencing. However, there are far more places to use in geofencing marketing efforts, many of which go beyond the tried and true. This shows a high degree of ingenuity among marketers who have any number of use cases in mind for geofencing marketing.

Best industries for geofencing marketing

While these figures show where marketers see opportunity, we wanted to know if this is where they are actually making the investment in geofencing.

As it turns out, there’s a direct relationship between where marketers see the greatest potential for location-based ads and where they are spending money. The top five verticals getting the most paid media attention when it comes to geofencing are restaurants and bars, health/beauty/fitness, grocery, entertainment and pet stores. It’s also worth calling out that 18 percent of ad buyers are not investing in any of the categories we asked about, while another 7 percent are running ads on behalf of CPG / e-commerce and home services.

Geofencing marketing - Areas of investment

Geofencing Marketing by Channel

When it comes to channels, B2C marketers rely heavily on Instagram and Facebook. More than 60 percent of all those we surveyed run ads on these platforms. This may come as no surprise. Facebook has proven to be a highly effective channel for getting shoppers to consider, decide and purchase. A distant third place is held by Twitter. LinkedIn and Snapchat round out the top five spots. TikTok and Pinterest are very nearly tied, each of them seeing a little more than 10 percent of mindshare among marketers.

Interestingly, just 9 percent of marketers surveyed use a demand side platform (DSP) to run location-based marketing campaigns, signaling just how much control marketers want to have in terms of audience building, activation and attribution. All of the social media ad platforms we asked about accept mobile ad IDs for the purpose of audience building, giving marketers full flexibility in terms of targeting, creative, testing and budget throttling.

Geofencing marketing - Channels

Geofencing Marketing – KPIs

When marketers spend in these channels they see a range of costs and returns related to their investments. Sometimes, CPM costs can be slightly higher with location-based audiences because they are higher intent and further into their decision process. Having shown up in a store indicates a propensity to purchase. The average CPM for location-based audiences reported by those surveyed is $4.36, markedly lower than the average CPM of $9 for Facebook ads focused on impressions.

Among the lowest CPMs in advertising can be found on the Google Display Network, which includes Gmail, YouTube and other sites, averaging $2.80. The downside to Google is that it doesn’t allow for highly targeted location-based audiences, forcing advertisers to rely on its own built-in tools for geotargeting, allowing marketers to focus mostly on countries and/or cities. When marketers want to get the best possible return on investment, they can do so with audiences who have visited specific locations, powered by geofencing technology.

Geofencing marketing - CPM

When it comes to cost per click (CPC) and geofenced audiences, this is where digital marketers generally see higher levels of investment. While the average CPC for Facebook ads is $1.68 across all industries, the average CPC for location-based audiences is $5.40. Because these audiences are high-intent and convert at higher rates than more general audiences, the investment can be justified.

Geofencing marketing - CPC

We asked marketers if they think the geofenced audiences they use perform better, worse or about the same as other targeting tactics. With the data supporting their instincts, 39 percent said they perform better, and 22 percent they thought they performed worse. Another 39 percent said they think their location-based audiences perform about the same as other audiences they address.

Geofencing marketing - audience performance

 

What does the actual performance data say? The average click-through rate (CTR) for geofenced audiences is 7.5 percent. By comparison, the average CTR for Facebook ads across all industries is 0.9 percent. In those industries where marketers invest most heavily in geofencing, the average CTR for general, non-geotargeted audiences is 1.5 percent in retail, 1.2 percent in beauty and 1.0 percent in fitness. The positive difference with location-based audiences is paramount.

Geofencing marketing - CTR

GeoFencing Marketing Calls-to-Action

Not all geofencing marketing effectiveness results from the audience. Creative, offer and call-to-action are all powerful elements in compelling shoppers to action. While the combinations of these elements are infinite, we wanted to know the most effective CTA used in location-based marketing.

Geofencing marketing - CTA

Other effective CTAs by digital marketers use for geofencing marketing:

Geofencing marketing - CTA honorable mentions

Geofencing Marketing by Campaign Type

When it comes to use cases for geofencing marketing, there are as many options as there are campaigns. To better understand the range of use cases, we asked digital marketers about the overarching goals of their efforts when it comes to geofencing and geotargeting.

Geofencing marketing - Use cases

The various uses for location data invited a more specific question about what locations digital marketers geofence. While campaign goals should dictate this aspect of geofencing marketing, there are any number of ways to think about geofencing creatively to generate the best possible results. As it turns out, digital marketers geofence a great variety of places and place types, driven by what they want to achieve in the context of a given campaign.

Geofencing marketing - locations

Geofencing Marketing during COVID-19

Given the coronavirus pandemic remains in full swing at the time this report was published, we asked digital marketers how the pandemic has affected their use of geofencing marketing and geotargeting. More than half of those surveyed have increased their investment in the practice as a result of the pandemic. On top of that, 16 percent of marketers have begun geofencing marketing as a direct result of the health crisis. Ten percent of digital marketers have ceased the practice, likely due to budget cuts and needing to pause advertising in general. The other 21 percent have decreased the focus on the practice.

Geofencing marketing - COVID-19

The COVID-19 pandemic has emboldened marketers to speed up change, rather than making them more cautious. That means rapid changes in ad spend and campaign execution. Campaign effectiveness takes on greater importance when budgets are stretched.

If you want to easily target the exact people you want to reach, see real-time ad performance and create more agile campaigns, get a demo of the results-driven geofencing marketing platform.

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