Geofencing – Background Overview & The Market


 

In this post we will focus and try to identify the opportunities of Geofencing. I would really like to hear your thoughts and opinions regarding this technology as applied on the mobile marketing field, as Geofencing has been long time shady and some time misunderstood form the majority of users.

Definition

Geofencing is commonly used for notifications and alerts for when a user enters or leaves a designated area, such as tracking location via GPS for a specific area. A geofence is just a user-defined virtual perimeter for a geographic area. In other words it is a location-based service, providing a user interface that enables a mobile phone user to receive alerts on a pre-defined area for a pre-defined location (business). An application server that monitors the current location of the mobile device with respect to the geofence, and in response to the portable electronic device being within the geofence will automatically transmit instructions (offers & coupons) to the mobile device. Once the user exits the geofence location, the particular service is not offered to the user anymore.

Geofence is also time based providing mobile users with dedicated promotions and messages for specific times of the day delivering the right message, the right time and to the right audience, thus creating a personal and highly customizable user experience.

Overview

Mobile applications and services are fast applying geofencing technology to enable advertisers and brands to send and receive notifications based on their exact whereabouts. Brands and retailers can then create feelings of serendipity that will drive more users into their stores with the solely intention to buy or try their products.

Geofence connects buyers and sellers close to the point of sale, right before the decision process, and in some case is the force leading to the decision process. Through geofence the retailer/brand know exactly when the ad is viewed and can also confirm when the user has walked into the store. This will serve as confirmation of mobile performance for location-based ads.

Geofence can be implemented (and currently also found) in two forms, either via mobile applications or via geofencing platforms.

 Mobile Applications

There are a number of mobile applications currently in the market who use geofence technology enabling advertisers and brands to directly connect with their target audience.

One of the industry leaders and with a broad patent for geofeencing technologies is Where Inc. Where Inc has developed a location based mobile application running in most mobile platforms and Oss enabling users to locate nearby businesses collect coupons offers and more. The application enables users to save their favorite results and businesses and be notified of special offers, if any, when they enter the geofence. Additionally, where serves location based banner ad units, advertising products and businesses for local brands, events or products relevant to the location of the user as well as the category or the search result they have come up with.

An also notable mobile application is Faves. Faves uses the user’s current location to find local deals from various retailers and businesses. The difference with Where is that the application allows user to Fave a specific product i.a. coffee, or a particular business. When they enter the geofence of their favorite business users receive a push notification about the store. If the store has participant retail locations or branches, user is also alerted for those. Finally, if a user Fave a particular product, once entered the geofence where a coupon or a special offer lays for the particular or similar product i.e. cafe latte, user also receive the alert or the coupon via push notifications.

Other companies who implemented geofence applications and campaigns:

Flickr, MayorMaker, TweetMover, SimpleGeo, P!NG4 Deals

Limitations

  1. Mobile applications can be device specific and do not reach the entire population as they live solely on smartphones.
  2. GPS varies in accuracy based on ranging, so for example, if the GPS supports a range of 700 meters, then down to 30, then up to 100meters, then the geo-fence may be entered and left.
  3. When geo-fencing is an integral element of the application, it requires the application to be active and the users logged in which can prove wrong user experience.

Geofencing Platforms

Geofence can be also implemented through platform based services which is basically program that targets millions of mobile subscribers with various brands coupons. The discounts usually work through mobile operators, an users will have to firstly opt-in allows companies to offer them discounts based on preferences and demographic information they’ve submitted.

The industry leader in the particular field is Placecast who has developed a service platform enabling brands to connect with customers when they are near retail locations or places that are relevant to the brand and business. Customize messages can also be leveraged based on the brand’s marketing needs and by layering in factors such as weather, traffic, and shopping areas. ShopAlerts can reach almost any phone as it is using SMS notifications and text messaging works on nearly every phone and enables marketers to reach the broadest possible audience.

Placecast currently integrates with all major US Operators and can locate over 268 million phones in the U.S., or 92% of all consumers. Currently they have partnerships with: The North Face, White House, Sonic and O2.

Placecast can work both as a SAAS and as a product provider, providing its platform to the mobile Operator to run their own campaigns. O2 target a million subscribers with Starbucks and L’Oreal coupons. The discounts will work through O2 More, an opt-in offer program that currently allows companies to offer O2 subscribers geo-fencing discounts based on preferences and demographic information they’ve submitted, creating 1,500 geographically restricted areas in which Starbucks and L’Oreal are able to offer deals to nearby customers.

Additionally, ShopAlerts can be leveraged for individual delivered the campaign to tailor offers. A great example is North Face, where when customers came within the desired geofence range the unique mobile technology was based on geo-triggers that can be integrated into an overall CRM program. Placecast created 1,000 geo-fences in and around New York, San Francisco, Seattle and Boston, cities where the North Face has many stores and areas that get a lot of snow or rain, so the company could tailor its messages to the weather. In urban areas, the fences were designed to be up to half a mile around stores, and in suburban areas they could be up to a mile around stores.

Other companies who implemented geofence platforms and implemented campaigns:

AT&T, Sparkle, HTC, Anchor mobile

Limitations

There can be a number of limitations when using such technology as a platform provider through SMS.

  1. Usually, location-based service devices trigger the geofence notification when they have already crossed it. Notifications are usually not in real time.
  2. Setting a small area to be surrounded by a geofence is not a good idea because fluctuating global positioning signals may cause false alarms.
  3. When implementing individual brand campaigns there is a need to align with Aggregators
  4. Individual brand campaigns will require a dedicated shortcode throughout the different Carriers
  5. Service platforms have to check with the Operator to find users location. If this is done often then it can prove very costly. If it done a longer timeframe then users could be in and out of the fence before the check applies


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9 replies

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