Geofencing vs Geotargeting: Differences and Similarities Explained

6 Min Read

At first glance, a geotargeting vs. geofencing comparison may seem fruitless. After all, they both involve geographic data and target users based on their location. However, there are distinct differences between the two.

If you’re interested in incorporating location-based marketing into your brand-building strategy, it’s vital to know the difference between geofencing and geotargeting. With that in mind, let’s take a deep dive into these two concepts. 

What Is Geofencing?

Geofencing is a location-based marketing strategy that involves setting up virtual boundaries (or “fences,” hence the name) around a specific geographical area. 

When a mobile device enters or exits the defined perimeter, it triggers a pre-set action, such as sending a push notification, launching an app, or sending targeted advertisements to the device. 

Geofencing technology relies on GPS, Wi-Fi, or cellular data to detect user locations.

Benefits of Geofencing for Marketers

Geofencing allows you to engage with consumers based on their physical location, which is why it offers several advantages over other targeting strategies. 

For one, you can target users within a specific area. This means you’ll be able to deliver content that resonates with your audience’s immediate needs and interests. Retailers will also find geofencing particularly useful, as they can use it to send special offers to potential customers nearby, encouraging them to visit the store. 

Ultimately, geofencing provides valuable insights into consumer behavior, such as how often they visit a location, allowing for more effective campaign optimization. 

When To Use Geofencing (Examples)

Geofencing is effective for businesses with physical locations that want to increase foot traffic. It’s also useful for event-based marketing, enabling organizers to engage attendees with real-time information and offers.

For example, a fast food chain that has a consumer mobile app could use geofencing to attract nearby customers, such as those in a three-mile radius around each of the chain’s locations. When app users enter those geofenced areas, they’ll receive a push notification encouraging them to stop in for lunch. 

What Is Geotargeting?

Geotargeting refers to the delivery of content or advertisements to users based on their geographic location. Advertisers can determine these locations through IP addresses or mobile device connections. 

Unlike geofencing, however, geotargeting does not require users to enter or exit a specific area to trigger content delivery; instead, it allows for broader targeting, such as at the city or county level, as well as specific targeting at the ZIP code level.

Benefits of Geotargeting for Marketers

Geotargeting offers several benefits for marketers looking to reach a location-specific audience;. Most notably, geotargeting is flexible. You can tailor your campaigns to target audiences in wide or narrow geographic areas. 

You can also personalize ads and content to reflect local preferences or cultural nuances to increase its relevance to your audience. 

Lastly, geotargeting makes advertising easier on your wallet. Instead of casting a wide net, you’ll be able to focus on areas where your ideal audience is located. 

When To Use Geotargeting (Examples)

Geotargeting is ideal for online businesses, local service providers, and any other entities that cater to specific geographic regions. It’s also beneficial for national campaigns that need to mobilize their audiences in local markets. 

For example, let’s say that you own a regional HVAC business in Georgia, and you’ve just expanded your service region to include the greater Atlanta area. There is stiff competition in the region, so you’ll need to establish a foothold quickly if you hope to meet your revenue goals. 

You could run a series of geotargeted Connected TV ads or OTT ads and target audiences in specific ZIP codes, such as those in a ten-mile radius of your new Atlanta-based business. 

Best Practices for Location-Based Advertising

Now that you know more about the differences between geotargeting and geofencing, let’s explore some universal best practices that apply to both types of location-based advertising:

Respect User Privacy

First and foremost, always obtain consent before collecting your users’ location data, and be transparent about how you intend to use it. Never assume that someone consents to location data collection / retention / sharing just because they’re using your services or visiting your website; always give users a chance to opt in or out. (This may even be required by law, depending on where your customers live.)

Personalize Content and Offers

Tailor your messages to the local context to increase relevance and engagement. 

Let’s build on the example of that Atlanta-based HVAC company above. When targeting users in that region, incorporate the local culture into your content. You can also offer location-based deals and discounts to spur your new audience to action. 

Optimize Timing

Consider the timing of your messages to ensure that they are delivered when they’re most likely to be effective. If you are advertising seasonal products or services, for example, display them during the times of year when they would be most relevant. 

Provide Value

Ensure that every interaction offers value to the consumer, whether through informative content, exclusive offers, or personalized experiences. At the same time, don’t forget to entertain your audience and make your ad memorable.

Monitor and Analyze Performance

Regularly review your campaign data to understand what works and what doesn’t. Build on your wins and learn from your missteps. 

Summary of Key Differences

To recap, when it comes to geofencing vs. geotargeting, here are the main differences between them:

Scope

Geofencing is best for brick-and-mortar stores, as it enables business owners to draw consumers in when they get close. It’s all about connecting with users as they go about their day, visit their favorite shops, or cruise around town. 

Geotargeting, on the other hand, is more about understanding where people live and work and then targeting them with deals that are relevant to them. 

Purpose

Geofencing is about instant connections, allowing you to grab users’ attention when they are close to your place of business. It’s akin to saying, “Hey, stop in and check out our shop,” when someone walks by your storefront. 

Geotargeting can also drive instant conversions, but it is also a key part of lead acquisition and nurturing. You can use CTV platforms, social media, and other channels to generate brand awareness and build intrigue over time. 

Timing

Geofencing requires near-perfect timing; you need to deliver ads and offer deals that consumers can use immediately before they leave the geographic parameters you’ve set in your targeting.

Geotargeting, in contrast, requires less precise ad delivery and timing. That said, you don’t have to rely on immediate responses from consumers; people may need to see your geotargeted ads multiple times before they make a purchase. 

Performance TV Can Help You Reach a Local Audience

The geofencing vs. geotargeting debate isn’t about which option is “better”; it’s about what’s right for your business. For most, geotargeting is the more flexible and versatile location-based marketing tool, but the question still stands for you: Which medium should you use to bring your geotargeting vision to life?

MNTN Performance TV can help you connect with local audiences on your terms. Our platform grants you access to premium CTV inventory on top streaming networks. You can target specific ZIP codes or engage in radius-based advertising to engage communities around your store or base of operations. You’ll also gain access to automation tools, a robust reporting suite, and creative solutions designed to help you stand out.

Geofencing vs. Geotargeting: Final Thoughts

Both geofencing and geotargeting offer powerful ways for marketers to connect with consumers based on location, each with its unique benefits and best use cases. By understanding the differences and similarities between the two strategies, your business can more effectively tailor your performance marketing efforts to meet the needs of your target audience.