What is geofencing for mobile apps?

Mikhail Shchelkunov ◽ Apr 15, 2022

Geofencing is a technology that allows you to create virtual borders around real geographic features. When one of these borders is crossed, the smartphone, which has a particular app installed, initiates various events - such as push notifications, text messages, targeted ads, etc. It’s possible to know that a geofence has been crossed thanks to geopositioning via cellular data connection, GPS, or Wi-Fi.

Geofence boundaries are pre-determined by mobile app owners and marketers.

Geofencing in Marketing

This technology allows goods and services to be promoted to users in close proximity to the advertised business. Implementing geofencing in marketing can:

  • Create multi-channel customer interaction strategies
  • Improve the quality of customer service by collecting feedback
  • Increase attendance by sending promotional offers to smartphone users who pass near a particular store
  • Recommend products based on previous behavior
  • Go around competitors. By setting the virtual perimeter around a competing location, you can redirect the client with stimulating content.

Every year, more and more companies are implementing this effective marketing tool in their applications. According to a report by Yahoo Finance, from 2020 to 2025, the average annual growth rate of geofencing is projected to be 23.96%.

The Benefits of Using Geofencing in Your Business

Including a geofencing feature in your app will help your business:

  • Attract more clients - For example, through an advertisement that comes to the smartphone when the user is near the business or somewhere that is associated with your product or service.
  • Save money - Geofencing isn’t nearly as hard on budgets as buying ads.
  • Increase sales - You can offer limited-time promotions and even change campaigns literally every day, thereby increasing sales for your local business.
  • Increase customer loyalty - Well-timed promotions have a positive effect on customer loyalty, which means they will use your application more often.
  • Collect statistical data - Geomarketing allows you to gather a lot of useful data so that you can adjust your business strategy, starting with who exactly visits the store most often and what locations would be best for expanding your business.

How does geofencing work in mobile apps?

By default, Android and iOS have a built-in smartphone location service that can be used for geofencing. In most apps, the geofence feature is constantly running in the background, even when the app is not in use.

Several geofences can be tracked at the same time on one device, but every OS has its limits. Android can support up to 100 geofences per app. For iOS, the limit is 20..

The administrator, marketer, or app developer determines the virtual boundaries of the geofence. The shape of the border can simply be round, or polygonal. After the boundary is set, it will activate pre-programmed actions like data analysis and smartphone alerts for users who have installed the app.

What is the difference between geofencing and geotargeting?

Both strategies are powerful location marketing tools and are used for targeted advertising campaigns. But they do have a number of significant differences.


Geofencing
Geotargeting
Purpose
Relevant advertising to attract a potential customer to a specific location
Personalized advertising, increasing brand awareness to boost conversions in the near future
Scale
A specific object, such as a separate building
Country, region, city
Target Range
Allows you to present ads at an ideal time and place. Literally all smartphone owners who are in the virtual perimeter receive push notifications and see ads in the mobile app
Exclusively potential customers who belong to a specific category
Used By
Event agencies, cafes and restaurants, souvenir shops, medium and small brick-and-mortar businesses
Any business
Use of location data
Collects data on the smartphone user’s location and creates a map of their movement
Does not save location data

Examples of Geofencing being used in Mobile Apps

Geofencing is widely used in navigators, shopping apps, and social media.

Sephora has an app for selling its own brand of cosmetics. Customers receive notifications about promotions and discounts when visiting a geofenced area containing retail stores of the manufacturer.

The Burger King app uses geofencing around McDonald's restaurants to promote its own products. In 2018, every McDonalds visitor received a promotional discount for a Whopper at Burger King. This tactic worked, bringing the app from #9 to #1 in the Food & Drinks category in the Apple App Store.

The navigation app Waze uses geofencing to promote its partner brands like McDonald's, AT&T, Shell, and Adidas by simply displaying them on the map. It also gives drivers limited-time offers as they approach gas stations.

Snapchat, Facebook, Instagram and other social networks use geofencing as one of the targeting options when setting up ad campaigns.

Creating a Geofencing Application

Geofencing can easily be integrated into almost any mobile app. Regardless of whether it was written with manual code or assembled on a builder tool, the geofencing API for iOS and Android is all you need.

Here are the features you should add during the development phase.

  • User profiles - This is how you’ll know what products and services to recommend to a particular user, and how often they make purchases.
  • Notifications - Keep your app users up to date on current offers and encourage them to make more purchases when they are near your business.
  • Location Data Collection - Find out how often the user visits the business and how much time they spend there. This info will help you focus on optimizing existing marketing campaigns as well as developing new, more effective marketing strategies.

Summary

Geofencing is an effective tool for customer engagement. Developing an app with this technology will give your business a huge advantage over the competition. You will increase customer loyalty and sales as well as collect useful statistics.


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