The Learning Center

One of the newest advertising trends that is becoming more relevant as the digital age continues to grow is known as Geofencing. What exactly is Geofencing? It is when a person receives a message to their smartphone that relates to a specific company when they enter an area that is sectioned off by the company. In other words, a form of location-based advertising. These messages can be communicated through text message, an email or an app notification. Most of these interactions are set-up by large retailers such as Target or Walmart. Now that the base understanding of GeoFencing is covered, let’s move onto to how it works.

Creating a “Fence” 

Most companies who choose to use this tactic will typically create a “fence” around a physical store location or office. Creating these “fences” allows for the company to send out a notification to all who pass through the fenced area. These notifications could be announcing a sale, a coupon sent directly to your phone, or an email from a company’s competitor. This is done to try and encourage potential consumers to visit the location as they are already passing by. Some will use this tool to encourage the consumer to leave their competitor’s location by creating a “fence” around the competition. 

Target Users 

While geofencing does seem like a great tactic, it seems to work best for retailers whose target is everyday consumers – those who aren’t out shopping for one item in particular. Consumers typically have a set place they plan to visit when they are looking for a specific item or service. To elaborate, if someone is going out to buy a new pair of shoes, they will already have a shoe store in mind they would like to visit. Having a fence for a realtor office around this same area would not reach this consumer well. As mentioned earlier, a benefit to this interaction is that a business will fence in the area around a competitor to get the consumer to leave that business and come to their business instead. 

New Considerations 

Marketing tactics like GeoFencing have been great additions to companies, but as the times go on more consumers are becoming aware of what causes this location-based advertising. Many consumers have expressed concern about their privacy being violated by these location-based advertisements. The concern for this has gotten so high that even the state of Massachusetts chose to pass a Consumer Protection Law that objected to the usage of location-based advertising. Location-based advertising and marketing is opening many different windows of opportunity, but the privacy concerns and potential of new laws have made people more wary of this type of advertising.  

Is GeoFencing Good for Insurance Agencies? 

The increased interest in location-based marketing has brought out a lot of different opportunities and options for businesses looking to market themselves. GeoFencing has become the new peak interest, but does it work well for insurance agencies? As previously mentioned, GeoFencing has been a great success for large retailers. It’s important to remember that with GeoFencing you are sectioning areas of general consumers and not targeting a specific type of consumer. Insurance agencies would benefit more through the PPC (Pay Per Click) or SEO (Search Engine Optimization) approach to location-based advertising. 

PPC and SEO are two additional ways to utilize location-based advertising, but with specifics in mind instead of the generalization seen with GeoFencing. When working with PPC the goal is to target with specific keywords, while with SEO the goal is crafting keywords to help rank websites in a Google search.