Geofencing vs Hyperlocal Search Confusion

There is a bit of confusion about Geofencing. It is a new advertising methodology after all and that newness has spawned misleading usage of the word. Many are confusing it with the act of searching using a mobile device. Let’s see if we can’t clear up some marketing BS floating around in the blog-o-sphere.

Android has some training for the technically inclined that is useful to understanding how it works.

For the rest of us, Geofencing encompasses advertising to an audience that happens to be in your targeted area. The advertiser is trying to catch the attention of this audience while they are in a usually small target area (the geofence).

For the advertiser to apply a geofence on a consumer, the consumer must either a) use an application (APP) on a mobile device or b) visit a website with geofencing capabilities.

If the consumer has downloaded an APP for receiving alerts, they are actively shopping and aware that they are targeted. We aren’t so concerned about this active/passive consumer because they are not the most coveted consumer. Its the unaware passive shoppers that are more interesting and valuable to the advertiser. Lets take a look at why that is the point of what makes geofencing attractive to advertisers and why this is where all local online advertising is headed.

The Passive Consumer

Lets use a contemporary example and the best representation of geofencing (proximity advertising). I’m shopping for a car and I’m at a dealership talking to a salesperson about the price. They of course says this is the best price anywhere and I of course whip-out my mobile device to see if that’s true. ( BTW, what I am doing as a consumer is called price comparison shopping, not searching! )

As it happens, the nearest competing dealership has geofenced the location of the dealership I’m standing in. The geofence could be very small and is identified by the IP address or GPS coordinates of my device. When I visit the website of the competing dealership, I’m greeted with a pop-up ad that says “We’ll beat that dealer’s price”. Hmm! That’s pretty compelling. I think I have to check what that competing dealer is going to offer me. Don’t I?

As an advertiser, that’s about as good a lead as any. This is a confirmed buyer because they are far into the funnel – they are price shopping. As an advertiser, I’m all-in for Geofencing! And I’ll pay more from these highly qualified leads.

The Hybrid Consumer

The hybrid scenario means the consumer is active in the sense that they downloaded an APP for, lets say, car shopping onto their mobile device. This consumer would get a passive alert on their mobile device that the car they are looking for is on sale near by when they enter a geofence setup by the car dealer.

While there are a few APPs for car shopping, they are not all-encompassing and therefore not too popular. My guess is that for this capability to mature it will have to be offered by search engines – probably in the not too distant future. This explains many changes Google has made recently; particularly the change to Places listings that are now entirely based on distance from the consumer/search. Google is polishing its location services with regard to the consumer’s location as communicated by the device.

The Active Consumer

Search has been around for a long time now. I search on my computer/mobile device for the car I want and I see an ad from a nearby dealership. While that ad is shown to consumers in a limited geographic area, this is NOT what is referred to as geofencing. That is a typical PPC (Adwords) ad. That geo-targeting capability has existed for about 14 years now. The car dealer simply specifies where those ads appear depending on a) a radius from a location or, b) a zipcode, city, county, or entire country. Thus far, Adwords cannot alert you. You must search first. That is why I call this an “active” consumer. They are searching.

OK! Now that we have all that clarified, here is as example of how a so called marketing “professional” does not understand that geofencing has nothing to do with search.

In this post 3 Geofencing Stats You Need To Know:

#3 is > 51% of smartphone users have discovered a new company or product when conducting a search on their smartphone.

Yes, that statement is true, but…it has NOTHING to do with geofencing. (or maybe its how marketing people just cant help themselves when the ability to use misleading context arises. You know. “Baffle them with bullshit”.)

Note the word “search” there? It is outright misleading to include this item in the list of benefits of geofencing. Search is how you FIND new businesses. Geofencing by itself does not help you FIND what you want.

Here is another in my diary of marketing companies that either don’t know what they are talking about or they should just not blog. You decide.

What Is Geofencing and Does It Matter? in which they write “The smallest location you can target in AdWords is a one-mile radius.”

What? A radius in Adwords is not a geofence (nor is it a recent innovation). And there is a lot of other useless information in that post too. In the article is a Premier Google Partner badge. I guess you can trust anyone with a badge.