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In this blog we will explore the core differences between geo-fencing and geo-targeting, and prove through analysis the superiority of geo-targeting.

Our mobile devices have become an integral part of our lives now more than ever before. In 2015, we spent an average 51% of our time consuming digital media on mobile every day – compared to 22% in 2011.

This perfectly paves the way for location-based services. Using GPS to identify the geographical location of mobile devices, these services can then send information to devices within this range. By 2019, the location-based services market is expected to be worth almost $43.3 billion. And in a survey of 150 industry professionals by Pinpoint, 85% expect spend on it to rise in the next three years.

What is geo-fencing?

In use since 2002, geo-fencing works by drawing a virtual ‘fence’ around a specified area using GPS, serving messages only to devices that are within this geographical space.

For example, if a shop in Manchester has a sale, they can they can send out push-notifications to all devices within this city – provided the device has their app downloaded. This is great for businesses that are unsure who they want to precisely target, allowing them to advertise to a largely unspecific audience.

It is also effective if you are interested in advertising to customers according to their geographical location only and no other user-data. For example, Yik Yak created a social network app that allowed users to talk to others who were within 1.5 miles of each other by posting on a common board.

 

What is geo-targeting?

Geo-targeting similarly sends mobile messages according to the device’s location. However, there are two primary differences between this and geo-fencing.

1.   More specific location tracking

Whereas geo-fencing sends messages within a set area, geo-targeting messages are delivered when an individual enters or passes through a set ‘boundary’.

Because of this, geo-targeting can target users at more specific locations than geo-fencing. For example, as an individual walks within the vicinity of a clothes shop, this can trigger the firing of a message to the person’s mobile, advertising a new collection or offering promotions – encouraging the customer to get involved. The Vouchercloud app uses this, serving a voucher when the device is within 200m of a participating store.

This location ability can be used in a variety of other ways too:

  • When a customer is awaiting a delivery, they can be sent a message when the delivery vehicle passes into a set boundary, letting them know that their delivery is close.
  • When a user sets a reminder on their phone, such as needing to post a letter, the app can fire a message to their device when the user comes close to a post office, reminding them to send the letter.

 

2.   Greater level of targeting

Another major difference between geo-fencing and geo-targeting is, as its name suggests, the greater level of targeting that the latter provides. Geo-fencing only uses geographical location whereas geo-targeting also incorporates the user’s demographics, behavior and purchase history.

Because of this, businesses can segment their audience and send messages to customers who are likely to be interested, enabling them to get greater engagement. Geo-targeting can also incorporate the user’s language, ensuring that the message is sent in the right one.

 

Geo-targeting does have its setbacks. Like geo-fencing, it uses GPS. This uses satellites and mobile phone towers which are relatively expensive and also require lots of battery. Also, push-notifications can only be sent if the user has downloaded the app and given permission.

However, these issues fade away when you consider the potential of geo-targeting, undoubtedly superior than geo-fencing. Providing more specific location tracking and more detailed personalization than geo-fencing, geo-targeting is the deserved winner of the location-based services battle. And we expect it only to grow and grow as more businesses realize its potential to reach their customers through mobile.

To find out more about the digital world, take a look at our Resources section.

 

A version of this post was originally published by Kate Rogerson in our UK office.

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