Thursday July 12, 2018

Excited About Geofencing Ads? Curb Your Enthusiasm

Geofencing ads

On paper, geofencing advertising sounds cool, if a bit creepy. A location-based targeting tool, geofencing lets you put in your specific, strategically chosen longitudinal and latitudinal coordinates, attach a cookie to all the mobile devices in that location for a set period of time and deliver relevant ads to your target audience for the next few months.

Consider the possibilities. You could advertise to everyone who’s at that expensive trade show without paying to actually go or exhibit. Or, you could promote your product to everyone who shops at a certain store or attends a concert or festival.

But before you go buy a house in the Hamptons with the money you’re sure to make from this channel, a word of caution. I’ve tested geofencing a few times now, and my assessment can be summed up in a word: dud. 

How it Works

If you’re familiar with geofencing or don’t care how it works, skip to the next section. If you’re still with me, here’s the short version.

Geofencing is the tactic of leveraging global positioning (GPS) or radio frequency identification (RFID) to establish a geographic boundary, or if you prefer, a “virtual barrier.” Or, you know, a “geofence.”

Once your geofence has been set up, you can create triggers that deliver an ad, text message or app notification when a mobile device enters (or exits) the targeted area. And then, with the cookie now attached to users’ devices, you can serve them remarketing ads for a given amount of time.

In other words, businesses can draw geographic boundaries and communicate at will with mobile devices entering into that space.

The Problems with Geofencing

Before we get to actual results, let’s address the thing you’re probably already thinking: how is this legal?

There’s no denying that it’s an unsettlingly invasive technology from a privacy standpoint. That scene in Minority Report where Tom Cruise is followed around by creepy personalized ads? We’re getting close.


Not icked out yet? Maybe a story is in order.

Last year, the  Massachusetts Attorney General stopped an ad campaign from Copley Advertising, a firm hired by a Christian organization to execute a geofence around various women’s health clinics so they could target patients in the waiting room or nearby with anti-abortion ads.

Again, consider the possibilities.

Aside from any privacy or moral issues you might have with geofencing, there are also the legal issues. In 2016, Massachusetts became one of the first states to enact a consumer protection law against the use of location-based advertising, and other states may follow. And if you’re thinking about geofencing anyone in the EU, forget it — unless you’re looking to open yourself to the fun and exciting world of GDPR violations.

If you’re able to overcome your moral and legal hesitations about this technology and use it anyway as I was (let’s not think too much about the implications there), there’s another problem: the effectiveness. 

We’ve done a couple geofencing tests now using two different platforms, and the results were miserable each time. We saw: 

  • No conversions
  • About as close to zero time spent on the site as possible
  • Nearly a 100% bounce rate

Of course, display campaigns are often talked about as the equivalent of throwing up a digital billboard on the internet; you’re looking for brand awareness over direct lead generation. That said, you typically want to see at least some level of interest to indicate you’re reaching the right people (and that they are real people and not bots or mistaken clicks). 

Could the targeting or the ads themselves have been off? Perhaps, but these weren’t haphazardly chosen geofences — they were chosen because they represented opportunities to target people we had confidence would be good fits for the client based on past campaigns and research. And as far as the ads, in both cases we were using messaging that had shown to be effective with the groups we wanted to reach. 

On top of that, the analytics and reporting contained discrepancies in both cases, too. For example, where they showed x number of clicks and impressions, I saw about half of that come through with the site’s analytics. Which raises the questions: What am I paying for? And why should I trust any of the data I’m receiving from these platforms?

That’s Just Like… Your Opinion, Man

Chances are, someone who reads this will think I’m a naïve fool for giving up on geofencing, and I admit — two tests wouldn't qualify as a conclusive study. But from what I’ve seen, there’s more hype than substance here. The taste in my mouth is too bad to give it another look any time soon. But hey, that’s me. (According to a press release last year from MarketsandMarkets, the geofencing market is projected to grow to $1,825.3 million by 2022 — which means my pessimism is far from universal.)

There are plenty of proven advertising tactics out there that I’ve seen work time and again for small businesses. Maybe I’ll change my tune in the future, but today, I can’t say this is one of them.  

Written by Charlie Nadler | Tags: martech

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