Geofencing is the creation of virtual boundaries using Global Positioning System (GPS) technology. When a mobile device falls within the geofence, it triggers specific software behaviors to guide the user. Geofencing is particularly common in location-based marketing, GPS fleet tracking and asset tracking; however, there are other uses for geofence systems. Brands continue to invest in geofencing to manage location-specific operations. The global market size of geofence tools is $1.95 billion and is expected to grow 21.7% by 2030. Learn more about geofencing, its uses and how you can apply it to your operations.
The definition of geofencing
Geofencing is the creation of virtual boundaries to segment one group of people or businesses from others. For example, a local coffee chain doesn't need to run social media ads across the entire state. It only needs to reach people who live around its locations. Geofencing allows the owner to limit exactly who sees the company's ads, either by targeting specific towns, zip codes or areas. Some software systems allow users to manually draw geofences around their desired area. Organizations don't just use geofencing for marketing purposes. They can apply it across a variety of fields whenever employees use GPS tracking or management. Geofencing is also a key aspect of any tool that uses location-based services, like apps developed for fleet management.
How does geofencing work?
More than 90% of Americans own a smartphone and most people carry them around throughout the day. This is what allows companies to use geofencing. A business will set a virtual fence around a specific area that they want to target, then rely on smartphone data to reach the right people. Smartphones constantly send information across Wi-Fi and wireless networks, including location information. When your employees' smartphones send location information across a 5G cellular network, the geofence triggers an action. Geofencing can operate across cell networks and through Wi-Fi connections. It often relies on GPS tracking to alert systems when users are within a specific area. With this accurate location information, the software using a geofence is able to reach the right devices.
How geofencing is used
Geofencing comes in multiple forms and has many use cases across a variety of industries. While marketing tools often come to mind, geofencing is also valuable for equipment tracking and connected assets across different fields. Here are a few examples of how geofencing is used.
Geofencing for marketing
Geofencing is a useful tool in the digital marketing and advertising industries. It allows companies to offer specific promotions to relevant customers without wasting money on people outside of a specific area. When you visit Atlanta, you might receive an advertisement for the Georgia Aquarium. This is an example of geofencing because only people near the aquarium will see the ads. Geofencing can be so niche that advertisers can market to specific zip codes or even streets. A McDonald's franchisee can create promotions for their specific store and reach people in their area, even if there is another McDonald's just a few miles away. By only targeting specific audiences, marketers save money by reaching the best people who are most likely to make a purchase after seeing the ad.
Geofencing for legal and compliance
Geofencing can be a useful tool for businesses that need to stay within certain boundaries to operate their businesses. One example of this is the use of gambling apps. Gambling is only legal in some states and it can be difficult to promote betting in some areas that border states where gambling is banned. This is where geofencing comes in. Apps can use GPS to determine whether a user is within a state's borders. If so, they can place a bet. If not, the app will not work. Whenever companies need to stay within certain borders for legal or compliance reasons, they can use geofencing.
Geofencing for fleet management
Geofencing is an important part of fleet management. With this tool, managers can see exactly where their vehicles are and how long they have been in specific locations. For example, the owner of a shipping business can receive an alert if a truck has been at the warehouse for an excessively long time instead of out making deliveries. Geofencing in fleet management helps companies get more out of their vehicles while tracking team members. It is both a safety tool and a way to improve operations.
Geofencing for asset management
Geofencing can also be a security tool for tracking your large assets. Equipment is expensive to replace, especially large machines and trucks. Some specialized tools could be on the same work site for months. By setting up a geofence around your work area, you can help make sure that these large assets do not move from their assigned sites. For example, a construction company will create a geofence at a new location where it is building a shopping center. The asset manager will receive alerts whenever a key piece of equipment leaves the job site.
Geofencing for security
Geofencing has also been adopted by security companies because of the prevalence of smartphones. Modern security systems can sync with smartphones and disarm when trusted individuals approach a building. They can also send alarming reminders when people leave their houses or turn on automatically if no one is home. This is a great use of geofencing for consumers, highlighting how this tool isn't just used by corporations. If you want to keep your home safe, one of the best ways to do it is with a geofence.
Benefits of geofencing for businesses
The geofencing market continues to grow because there are so many benefits to using this tool. As more industries invest in geofencing, innovators discover new ways to use it. Here are just a few reasons to consider using geofencing and how you can benefit from these systems.
- Accurately geo-target audiences: Reach your ideal customers through segmentation instead of mass messaging groups of people. This reduces marketing expenses while potentially increasing the campaign's ROI.
- Use virtual barriers: Geofencing limits the need for physical barriers or check-in locations. This reduces your overall physical security and infrastructure costs.
- Reduce manual work: Bring your fleet management virtual and spend less time tracking large assets and vehicles.
- Get rapid feedback and alerts: Save time and respond to information faster by getting rapid alerts and insights on your business operations.
- Prevent misuse: Help stop vehicles and assets being used in unauthorized locations. Whether you are drafting a marketing campaign or managing construction equipment, you can use geofencing to save time and money — two of the most important assets in business.
Geofencing example
Look at the field of fleet management if you want to see geofencing in action. For example, a regional shipping service delivers materials across a few states and wants to streamline its operations. The company's goal is to deliver products to customers while minimizing the wear and tear on its trucks and their drivers. Through geofencing, the company can set regional assignments for different trucks within the fleet. This way a truck receives nearby assignments and a driver doesn't have to travel to a different region to deliver an order. With this process, the company can reducethe number of miles each truck completes each year. This helps prevent the vehicles from wearing out, reduce driver exhaustion and make it easier for fleet managers to know where any truck is at any given moment.
Challenges in geofencing
As with all forms of technology, there are a few potential drawbacks to using geofencing. Keep these limits in mind as you develop geofencing plans, as they might create problems that you need to overcome in the future.
- Some regions are more accurate than others: If you are operating in a region with poor cellular service or limited Wi-Fi connectivity, you could have trouble with your GPS geofence systems.
- There are privacy concerns: Some consumers don't like the idea of marketers using their location and giving them targeted ads. As more people turn on privacy settings, marketers might have limited audiences.
- Some apps can drain device batteries: GPS tools can take up a lot of battery power and data. This could be an issue for employees who have trouble keeping their devices charged. The benefits of geofencing often outweigh the drawbacks and limitations of these tools. As long as you are prepared for potential challenges, you can overcome them.
Is geofencing right for your business?
Geofencing is an increasingly flexible tool, which means more companies can use it to streamline their operations. Here are a few indicators that geofencing is right for your business.
- Your company is excited to try new technology that can improve your operations.
- Your business has several significant assets that you need to keep track of.
- You have a team of employees who work at different job sites in company-provided vehicles.
- You value the security of your operations.
- Your team members are eager to learn new systems and tools. Geofencing can be particularly beneficial in the construction industry, where fleet management, asset management and security are all essential for moving a job forward. Geofencing apps also come in a variety of price points, so you don't have to run a large enterprise to afford one.
How to get started with geofencing
The first step to get started with geofencing is to identify the problem you want to solve with this system. This will allow you to find the best solution for your biggest pain points. Next, make sure you have a trusted location-based service provider to work with. This will ensure that you don't use up your data or lose service while your geofence is in place. Finally, track the efforts of your geofencing program. Consider how these apps save time and money while reducing stress on your team. If you find that geofencing works in one area of your organization, you can take the next steps and implement it in another.
The future of geofencing technology
Geofencing was made possible by the rise of smartphones and GPS technology. As companies continue to innovate and buy new tools, the potential uses for geofencing will also grow. Current geofence app developers will continue to make their tools more reliable and overcome concerns about data usage and battery life. Even if geofencing isn't right for your business right now, the right technology could make it the best solution in the near future.
