Digital advertising with geo-fencing

You now can target those who visit your competitors

Geo-fencing, a new form of local digital advertising, is gaining a lot of momentum. Essentially, geo-fencing allows business owners to choose physical locations in the real world where they believe their best prospects might visit and to then create a virtual “fence” around those locations.

When people visit those locations while using a smartphone, the business owner can target them with ads for his or her business.

The immediate application of the technology is obvious. It allows a business to target the people who visit his or her competitors’ locations. The prospect walks into the competitor’s store and then starts seeing ads for your store on their smartphone as they use different applications like weather apps, games, utility apps or any other 
ad-supported app.

The result is that your brand is exposed to them as they use their smartphones throughout their day and for several days following their visit to the geo-fence. Truly, no other advertisement in history has been able to target the competition so thoroughly.

It’s not just competitors’ locations that make for good geo-fence target zones. I like to ask business owners, “If you could place a magic billboard anywhere in the world, where would you put it?”

Might it make sense to geo-fence the local diner where contractors hang out every morning? What about the contractor sections of the big chain hardware stores? That has some serious potential for putting your ads for equipment rental onto the smartphones of your most relevant prospects.

For the party and event rental folks, where might you place a magic billboard? Are there venues where corporate types hang out a lot? Would it make sense to target the dress shop to try and reach the bride or mother of the bride? If you want that local college to hire your business for their events, you can geo-fence the very building where the decision-maker works.

Good ideas? Maybe, but maybe not. There’s only one way to find out. Run a geo-fencing campaign and then measure the results using conversion zone technology.

Just like we can build a geo-fence around a location where prospects go, we also can build a geo-fence around your own location. This is the conversion zone. With it in place, you can track the number of users who were served an ad after visiting a target zone and then also visited the conversion zone.

One equipment rental company recently delivered 100,000 ad impressions to people who had entered about a dozen target zones that included competitors and other locations where the business owner knew his prospects frequent.

From those 100,000 impressions, 30 or so of these individuals also visited the conversion zone or the business’s location.

Not all of those people might be the perfect prospect. The owner of the company or his employees may have visited a target zone, were served an ad and then went to work. They might be counted as a conversion. Like all advertising, it’s not a perfect tracking system.

However, most would agree that a majority of the 30 conversions were likely to be true prospects. How many of them did he need to convert into customers to make a profitable return on his investment? The 100,000 ad impressions might cost around $1,000. In my experience, there aren’t a lot of “tire kickers” in rental.

The rental store owner agreed that most of the folks who come into his store become customers. Based on his average customer value, he really only needed to sell a handful of the 30 for the advertising investment to be profitable.

Is geo-fencing right for you? What’s your average customer worth? Only you can do the math and every store will have different close rates and average customer values.

Based on the rental stores I have worked with, it doesn’t take very many sales from true prospects to win a 200 percent return on investment. Can you say that for your other advertising efforts?

In addition, with a little time and data analysis, we can start to see which geo-fences perform the best, such as which ones get a lot of clicks and which ones get a lot of visits.

Then the questions revolve around whether to eliminate a target zone that isn’t working or add new ones as we think of where else to place a magic billboard.

Every campaign is a living, breathing work in progress that can be optimized based on the data.

At the end of the day, geo-fencing still is advertising and advertising is a risk. However, for what geo-fencing can do — target relevant prospects based on locations they visit in the real world — and for how it can be measured, since we can count the number of people who are shown an ad and then visit your location, it is worth considering. 

David McBee is an internet marketing strategist based in Kansas City, Mo. As a frequent speaker at The Rental Show® on topics including social media, mobile display, geofencing and search engine optimization, McBee works closely with several members of the American Rental Association (ARA). You can stay current on the latest internet marketing trends by following him on Facebook at facebook.com/davidknowssearch.