Marketers are increasingly using location data to drive impactful campaigns. One survey found that 83 percent of marketers saw more successful campaigns when they used location data. Marketers use location to hone their digital (Facebook, LinkedIn, and Google) ad campaigns, outwit their competitors, and to deliver the most relevant and timely messaging campaigns.

What is location-based marketing?

Location-based marketing, or geomarketing, is the method of hyper targeting users based on their location to deliver personalized messages at the right time and the right place. Location-based marketing works to boost local sales, drive in-store visits, provide highly tailored customer experiences, and gather user data that helps you get to know your customers better. This process works when you identify a user’s location and subsequently serve them personalized messages. The user must opt in to location tracking for this to occur.

Two terms associated with location-based marketing are geotargeting and geofencing. These terms refer to two powerful tactics within geomarketing that have gained traction and popularity in recent years. Both strategies can work to build customer loyalty, drive in-person sales, improve the customer experience, and stay ahead of your competitors. So let’s get into it.

What is geotargeting?

This strategy involves delivering messages or content to users within a specific area or location who fit certain criteria in terms of their behaviors, interests, or activities.

Geotargeting tracks a user's location through their IP address, which is matched to a connected device. In order to geotarget users, you must  earn user permission for location tracking as well as earning messaging permission.  

Geotargeting location data often encompasses a broad geographic region  and is well-suited to targeting users in the general vicinity of a location alongside other targeting criteria. This type of targeting is generally better for slightly larger areas.  

Geotargeting is an excellent option for retargeting campaigns, interest-based promotions, and special rewards. For example, as a food delivery app, you might retarget vegan users who live in San Francisco with an earth-day themed veggie burger promo. As a travel company, you could send discounts on local ziplining tours to users who have landed in San Jose, Costa Rica and who have previously purchased your ecotourism packages.

What is geofencing?

Geofencing works in a slightly different way than geotargeting. Geofencing, as its name implies, involves drawing a virtual perimeter around the area you want to target. You can geofence locations of any size, from states and cities to zip codes, neighborhoods, and even precise buildings. With geofencing, notifications are triggered when users cross your  chosen perimeter.

Geofencing uses GPS or an RFID signal to identify when users are inside the precise area you’ve defined. Only users who have opted-into both notifications and location sharing are reachable in this audience and notifications are only triggered when a user enters the “fenced” area.

Geofencing is generally used in situations that require greater location accuracy than geotargeting. This method is best when you want to outline an extremely small radius, such as a specific store, convention center, or competitor location to send specialized and timely notifications to nearby consumers.

A coffee shop, for example, can use geofencing to send promotions to users attending a Peruvian coffee tasting event at a nearby conference center. Your massage app might target users at the finish line of a 5K or marathon on race day.

Smart Location-Based Messaging in Action

Squaw Valley Resort uses location-based messaging to deliver a more relevant and helpful customer experience. Learn more about their unique use cases and strategy by listening to our Podcast with Tracy Chang, Vice President of Digital Marketing at Squaw Valley Resort.

>> Listen to the Podcast: How Squaw Valley Delivers an Olympic Experience