7 Ways SMBs Can Use Geofencing for Targeted Advertising

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Although large brands like Starbucks and the North Face have long been reaching consumers in targeted areas through geofencing — that is, setting virtual perimeters around physical places and sending text messages or push notifications when consumers enter those areas — smaller businesses have been slow to adopt the technology. This has less to do with the availability of technology than a lack of understanding about how the new technology works.

Here are seven tips from  experts about how small businesses can better use geofencing to target consumers in intelligent ways.

1. Size matters. The first step in creating a geofencing campaign is determining how large or narrow the fence needs to be. Just because one retailer found success in targeting customers within a two-mile radius doesn’t mean the same approach will work for every other business on the block. To determine the size of a fence, businesses should consider whether consumers would drive a long distance for their products or if their sales tend to involve spur-of-the-moment purchases. If possible, run some tests to see if changing the size of the fence results in any significant improvement in performance. (Dipanshu Sharma, xAd)

2. Think outside the box. Retailers should think of relevant locations to geofence beyond their stores. Ideally, businesses would target the places where their consumers might already be. For example, a company may want to geofence a sports event or a concert to reinforce its sponsorship of the event or target an airport to promote a new mileage program. (Anne Bezancon, Placecast)

3. Choose between hardware and software. There are many geofencing platforms now on the market. Although some still require installation of  hardware at the establishment, most involve software-based services. The location technology for software-based services tends to be slightly less precise, but the deployment costs drop significantly. Merchants should talk with several solution providers to find the best option for their establishment. (Darrin Clement, Maponics)

4. Get creative. To come up with the most effective offers, business owners should put themselves in their customers’ shoes. What would grab your attention? What would motivate you to visit a store? Although it’s ideal to work with a graphic designer to craft attention-grabbing banner ads, merchants can still achieve great results by working with platforms that provide DIY image creators. Such tools make it possible for SMBs to create their own banner ads with a few quick steps. (Ryan Golden, Moasis)

5. Timing is everything. In mobile, timing is just as important as location. Certain offerings and promotions may have a greater impact at specific times of the day. For instance, a retailer trying to drive in-store traffic should only run ads during business hours. Meanwhile, a spa trying to draw more customers for facials may be better off reaching people on the weekend. (Dipanshu Sharma, xAd)

6. Be relevant and anonymous. People don’t want to be attacked by ads every time they walk by a retailer. What’s needed is apps that allow for the setting of preferences. For example, a consumer might get special offers when she’s in neighborhood X or Y but not when she’s near her child’s school or home neighborhood. Merchants should design their apps or work with an ad platform that enables these types of triggers and preferences to ensure that their ad dollars have the highest return. (Darrin Clement, Maponics)

7. Analyze data using simple logic. Small business owners have access to a plethora of data when they work with mobile ads — so much so that it can be overwhelming at times. Location marketing is a lot like having an employee passing out flyers on the street. The employee reports where he was successful with street traffic, and based on that a decision can be made about which corner the employee should visit next. Businesses should use this same approach when looking at advertising data and focus on areas that are working well and adjust ads so they’ll have more of an impact. (Ryan Golden, Moasis)

Stephanie Miles is an associate editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.