As an integrated marketing agency that provides digital marketing services to clients in multiple industries, we are often asked about geographical and location-based targeting strategies. As with many things, improvements in technology have opened the door to opportunities that were impossible for all but the largest companies even a few years ago. But along with this innovation has come a lot of complexity, confusion and way too many buzzwords.
We’ve asked Laura Conway, Senior Marketing Manager at Reveal Mobile to provide an overview of current location-based targeting methods and help to demystify each, so that you can pick the most effective for your organization.
Geofencing, Geoframing and Geotargeting
A geofence, or geoframe, is a virtual barrier around a point of interest, such as a restaurant, a car dealership, a grocery store, or any other retail location. These barriers can be custom-built around specific locations, radii around an address, or part of a larger database of places. Geofences are crucial to geotargeting because you need to have a location people visit in order to capture their mobile device ID for future marketing.
Geotargeting is the marketing strategy of targeting ads to people based on the place they are located in. Consumers who visit locations you have geofenced are available for geotargeting. These addressable audiences can be reached via social media and programmatic ad buys, including CTV, DOOH, display, and other digital channels.
The Audience Spectrum
It’s best to think about audiences along a spectrum from general to segmented. As you move along the continuum towards segmented, the size of the addressable audience shrinks, but it also increases in quality.
The largest group, and with the most inherent unknowns, is an interest-based audience. A good example of this type of audience can be found on Facebook, made up of people who like or follow pages similar to your business. However, they are not necessarily in-market for your product or service. Realistically, how many of Ducati’s 3.8 million followers are actually shopping for a motorcycle? Or how many of Louis Vuitton’s 24 million followers actually have $1,600 to spend on a new purse? Interest-based targeting isn’t always reliable or a good way to allocate paid media dollars.
Next on the targeting spectrum is an audience that has shown some interest. These people may have signed up for your newsletter or visited your website but did not convert. This segment is typically large, but you do not know how qualified the leads actually are if they have not yet converted.
Next comes a lookalike audience. This audience shares certain attributes with your core target audience. But they also sometimes share unimportant or irrelevant traits. Maybe someone on your core target list and a member of the lookalike audience both went to the same college but have completely different interests or jobs. Advertising to the wrong person adds up to a lot of wasted ad spend.
Following lookalike audiences on the targeting spectrum is a geotargeted audience. This group is as highly segmented as you can get, though it is not typically the largest cohort. Geotargeted audiences of the highest quality – in-market and highly likely to convert based on having shown real world intent. Compared to other audiences, these audience members have visited physical locations you specify, so you know they are shopping for what you have to offer.
Finally, advertising to your own existing customers will increase retention, return visits as well as share of wallet, but it is difficult to show impressive growth numbers if you advertise only to this group, most likely the smallest cohort on the targeting spectrum.
Geotargeted audiences are where the rubber meets the road for the most efficient advertising campaigns.
Geofencing Best Practices
We recommend advertising to three discrete audience segments to ensure you’re getting the most value out of geofencing:
- Retarget your current customers. Geofencing your own locations and retargeting your current customers is a great way to build customer loyalty and stay top of mind.
- Geotarget your competitors. To win over new customers and grow market share, pulling them away from the competition is a strong play.
- Target places your ideal customers go. We often find audiences that frequent specific venues are often likely to purchase complimentary or similar products and services. For example, audiences that often visit bars and lounges tend to show a high affinity to purchase tickets to concerts and shows.