Geofencing is a location-based marketing technique used by businesses to target potential customers within a specific geographic area. When someone enters or leaves a designated location or geofence, brands can send them relevant notifications, ads or offers. Facebook offers geofencing capabilities through its geo-targeting ad options.
What is Geofencing?
Geofencing allows companies to draw virtual boundaries around locations like stores, event venues or city centers. Mobile devices within those boundaries can then receive customized messages from brands. It relies on GPS, Bluetooth beacons, RFID and Wi-Fi to detect when a mobile user enters the designated space.
The geofencing process works like this:
- A business first defines the target locations for geofencing by their geographic coordinates.
- Mobile users enter those locations, triggering a software program.
- The program sends a push notification, email, text or other message to the user.
Geofencing enables hyper-local targeting because brands can focus their marketing on consumers who are physically present in key areas. It provides timely, location-based engagement when customers are most receptive to messaging and offers.
Geofencing Use Cases
There are many potential uses for geofencing in marketing and advertising:
- Retail: Send offers or product recommendations when users are nearby or enter a store.
- Events: Notify attendees about event schedules, last-minute tickets or related discounts.
- Real Estate: Alert home buyers touring specific neighborhoods about open houses or incentives.
- Travel: Message airline travelers about flight updates, lounge access or partner offers when they arrive at the airport.
- Automotive: Alert drivers to get an oil change or tune-up when they are near a dealership or service center.
- Financial Services: Notify customers about ATM or bank branch locations nearby.
Geofencing allows brands across industries to engage and influence customers when they are most ready to make a purchase. It provides proximity-based experiences that feel relevant and personalized.
Facebook Geofencing
Facebook offers robust geofencing capabilities for advertisers. You can target Facebook, Instagram and Audience Network ads to users when they are in a specified location or trigger actions when they enter or exit a designated area. There are two main ways to use geofencing with Facebook ads:
Location Targeting
Location targeting lets you show Facebook ads to people within a defined geographic area. You can target locations as small as 30 meters up to entire countries. Some options include:
- Cities, postal codes and neighborhoods
- Businesses, points of interest and landmarks
- Event venues and political districts
- College campuses and military bases
When people enter or are near those locations, your ads can be set to automatically appear in their feed. You can also choose to optimize your ads for in-store visits or exclude people who have recently been to your business.
Geo-Conversions
Geo-conversions allow you to see when someone takes an action at your physical business after seeing one of your ads. You can set up geo-conversions to track:
- Store visits
- Purchases at a retail location
- Using an app within a geo-fenced area
- Calling your business number
- Checking into your business on Facebook
Geo-conversions help you measure the real-world impact of your Facebook ads. You can see how many conversions happened per impression or optimization event. This helps inform your ad strategy and budget allocations.
Cost of Facebook Geofencing
Now that we’ve covered the basics of geofencing and how Facebook implements it, what does it cost to run geo-targeted campaigns? There are a few factors that influence costs:
Size of Geofenced Area
Targeting larger zones like countries or cities will be less expensive per impression than highly precise targeting of smaller areas. The larger your desired geofence area, the lower your minimum bid can be in the ad auction.
Location Precision
Targeting down to a precise 30 meter radius will cost more than targeting a general 1 mile radius. The more exact the location, the more Facebook has to work to identify users in that space and serve the ad, which raises costs.
Audience Density
Targeting areas with a highly concentrated audience will cost more per impression than sparse rural areas. Bids have to be higher to reach users in a competitive, crowded environment.
Device Targeting
Running geo-targeted campaigns across devices (desktop, mobile web, in-app) will be more expensive than just selecting one. Layering in multiple device targeting expands your reach but also raises your costs across the board.
Let’s look at some sample CPM rates to get an idea of potential costs:
| Target Area | Target Precision | Estimated CPM |
|---|---|---|
| Paris | 1 mile radius | $2 |
| Eiffel Tower | 100 meter radius | $6 |
| Times Square NYC | 30 meter radius | $10 |
As you can see, targeting larger city-level areas can cost as little as $2 per 1,000 impressions. But driving ads to precise spots like landmarks or venues will run $6-10 CPM based on the density of users.
Optimizing for Lowest Cost
Here are some tips to keep Facebook geofencing costs down:
Use Broader Target Areas
When possible, go after larger zones like cities, regions or postal codes instead of narrow geofences. The CPM will be significantly lower.
Avoid Highly Competitive Areas
Don’t geofence extremely crowded locations like Times Square in NYC or mega events. The auction environment drives up prices.
Limit Device Targeting
Run your geo-campaigns on just one or two devices rather than all platforms. Removing device types saves on targeting costs.
Track Conversions
Leverage geo-conversion tracking for store visits, online sales and calls from ads. Knowing your ROI helps maximize ad spend.
Test Different Audience Combos
Layering in interest, behavioral and demographic targeting on top of geofences can refine your audience and may lower costs.
Use Retargeting
Run geofenced ads to people who have already engaged with your brand or products. Retargeting is very cost effective.
Geofencing with Other Social Platforms
In addition to Facebook, other social platforms offer geofencing and location-based ad targeting including:
Google Maps lets you draw custom geographic boundaries to serve ads to users that enter the area via Google Search, YouTube, Display Network and more.
Snapchat
Snapchat has robust location targeting options and foot traffic metrics for understanding offline conversions.
Twitter provides targeted reach by location down to 1 mile radius as well as in-store visit attribution.
Pinterest offers location and store visit optimization for driving people to brick-and-mortar businesses.
Nextdoor
Hyperlocal neighborhood targeting makes Nextdoor ideal for geofencing highly specific areas.
Geofencing Regulations
While geofencing provides powerful location-based targeting, it also raises privacy concerns around data collection and tracking. There are some regulations surrounding the practice:
- Apple requires apps using geofencing to notify and obtain consent from users.
- Android limits background location access to minimize battery drain and data sharing.
- The FCC oversees guidelines regarding accuracy of consumer location data.
- The FTC monitors compliance with California and Nevada privacy protection laws.
Brands should be transparent in disclosing location tracking and targeting to comply with relevant regulations.
Conclusion
Geofencing enables contextual targeting of customers when they are in targeted geographic areas. Facebook provides robust location-based ad options for brands across industries. While costs vary based on target location size, precision, audience density and other factors, geofencing remains one of the most effective forms of local mobile advertising.