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What is Geofencing?

How it works, applications and the future of geofencing technology 

geofencing
Map with pins, markers. Simple flat illustration city plan with streets.

Geofencing is best explained through a real-world example. 

You’ve come out of Mercedes Benz with a brand new car, and can’t wait to drive. It’s a luxury car, and you intend to enjoy every moment of owning one…. until it’s time to park.Leaving the car means worryingly about would-be thieves. Fortunately, there’s a handy feature: Mercedes Benz’s Trackstar service, which adds an invisible geofence around the vehicle’s location.

Using satellites to set up a geofence, the car sends out a signal on its current location every 20 seconds. If the car moves beyond the geofence, or someone attempts to drive the car without the keys, Mercedes Benz knows and sends an alert. It’s a handy feature, and best of all because the fence is digital, it can be set up no matter where you park.

Mercedes Benz’s Trackstar service is only one example of companies using geofencing to provide added value to their customers. A technology that allows for practical application of GPS data, geofencing has serious potential in a number of industries, security included. 

Unfortunately, however, it can also lead to big privacy problems if handled incorrectly. If you’re interested in the concept, keep reading: below is an introduction to the good and the not so good of geofencing.

What is geofencing? 

A geofence is a technology that makes use of location data to set up an invisible barrier in the real world. Often the technology uses Global Positioning Systems (GPS), however, it can also use other data signals including cellular, wi-fi, and RFID. You can’t see or feel anything when passing through a geofence, but if carrying a connected device, the system knows when you enter or exit the electronic boundary. Think of them similar to the invisible electric fences popular with canine owners, thankfully without the shock. The geo ‘fence’ operates on one device and picks a series of location points nearby to create an artificial boundary. It then connects with available networks, such as cellular or wireless internet, to exchange signals with other devices. If a device is broadcasting its location near the boundary, the geofence can identify whether it is inside or outside the coordinates, and signal for a programmed action to occur.

While GPS can establish our location on the globe, geofencing focuses on where we are in proximity to virtual landmarks. Combined with other applications to support specific alerts or commands, digital devices have an entirely new way to interact with the physical world. Are you near a specific store or service center? Driving by the library with an overdue book in your car? Kids have stepped outside the local neighborhood? Geofencing allows users to define geographic boundaries without physical objects or symbols.

Geofences can be set up along specific boundaries or simply at a specific radius beyond a given point.

Popular geofencing applications 

Geofencing technology is growing fast in applications. Toronto-based location positioning technology company, Mapsted,  is now offering customers the ability to serve location-based push notification ads based on geofencing. The idea certainly has appeal: imagine a shopper getting alerts on The Bay’s  new spring sales when only a street away. Suddenly the user isn’t aware of just a good deal; they’re aware of a good deal within walking distance from their current location. For many, this type of marketing gets customers in the door, and much more ready to buy. Focusing on physical locations, geofencing is a virtual trend that brick and mortar shops can take advantage of.

Marketing isn’t the only practical use for geofencing. Other popular examples of ways organizations and individuals can use geofencing to their advantage include:

  • Personal reminders to accomplish certain tasks when in the area
  • Smart devices, such as thermostats that adjust the temperature when the resident is walking into their home
  • Security alerts when items move, such as Mercedes Benz’s Trackstar
  • Promoting restaurant deals, or driving incoming business. Consider targeting ads to relevant customers to advertise local theatres, concerts or events.
  • Making sure certain pets, such as cats or dogs, are still in their respective neighborhoods
  • Tracking shipments, keeping track of logistics and delivery timekeeping
  • Keeping drones away from restricted airspace
  • Safety messages for tourists when they wander too close to dangerous landmarks
  • Alerts to parents of toddlers if they get out of the house, or if younger children leave the neighborhood

Let’s take a deeper look into one of these examples; Promoting restaurant deals, or driving incoming business. 

As a restaurant, it’s crucial that your marketing strategy stays just as fresh as your produce. But, with new buzzwords popping up day in and day out, it can be difficult to know what to pay attention to. If there’s one strategy, though, that you should definitely learn more about, it’s geofencing.

Before you integrate any geofencing strategies, there’s one vital step you need to take.

Getting in more people’s pockets.

Since geofencing works via an app, you need to encourage your customers to download your restaurant’s application. This might seem difficult to do in a sea of restaurants but, by offering a high-value loyalty programme or an easy-to-use delivery option, you can start increasing app downloads and targeting more customers through geofencing.

After you’ve enticed your customers into downloading your app, the next step is to create offers and deals that’ll speak to them. To do this, you must really understand who your customers are.

  • Which age range are they in?
  • What type of promotion speaks to them?
  • Are they looking for vegan options?
  • Or, are they looking for a family ambience?

The more you know about your customer, and the more relevant you make your offer, the more successful your geofencing efforts will be. Above selling your product, your efforts should lie in adding value to your customers’ lives and creating connections with them.

Geofencing, in its nature, is a form of marketing that demands immediate results. Just a quick glance at a push notification is all it takes for a customer to decide if they want to dine with you or not.

It’s, therefore, in your best interest to make your offer as enticing and convenient as you possibly can.

To encourage immediate footfall, it’s recommended that you target customers within a 3-mile radius. You can make your offering even more effective by adding options such as “order now and pick up on arrival” to grab the attention of the “want it now” generation.

Since geofencing occurs in real time, you can have more control over customisation than could ever have been imaginable 10, or even 5, years ago.

This level of customisation allows you to leverage contextual information such as the weather and special holidays to push certain menu items.

Take for example, a rare sunny day. Through geofencing, you can remind your customers of your gorgeous patio seating and that brie and walnut salad that goes perfectly with a cold chardonnay.

To hone your target audience even further, you can also use information about places they’ve previously visited to customise your messages. For example, if there’s a concert taking part in your city, you can send out a message to the attendees about a special deal for concert goers.

The results of geofencing in a restaurant: 

Since geofencing technology allows you to build hyper-targeted ads, you can create more customer satisfaction and, in turn, enjoy higher levels of customer loyalty. Also, By having constant access to your customer’s location, you can gain a greater understanding of their buying behaviours.

  • Where do they shop?
  • What brands do they associate themselves with?
  • At which time do they prefer to eat?

This information won’t just help you to build successful geo-fenced ads, but will also help you with the marketing and branding of your restaurant as a whole.

Using Geofencing services for better cyber security

One of the growing uses for geofencing is the ability to add a new level of information security. Much like a physical fence can offer a level of security around physical perimeters, geofencing can heighten control over access to digital assets. A geofence offers another level of user authentication by verifying where they are. It can restrict user access by verifying the user is connecting at a pre-approved physical location.

Ideally, geofencing is an element of multi-factor authentication. The technology isn’t a security silver bullet, but it can keep your organization one step ahead. For example, a geofence won’t stop a hacker on-site, or an employee from accessing privileged information. However, what if someone has privileged access from a remote location? What if a hacker gains access to an account through phishing? Using a geofence can slow down and stop their progress by sending an alert or blocking access from outside acceptable perimeters. This is particularly effective if limitations are set to detailed areas, rather than all access from specified cities or countries.

Geofencing can also limit social sharing on popular networks. Users of photo-sharing network Flickr, for example, can set up a geofence to limit photo sharing to friends in a certain region. Such features may be comforting to those who want to engage with the local community, but are wary of sharing their images with the world.

Geofencing technology privacy concerns

By now, geofencing probably looks pretty attractive. The technology can offer better security, customer engagement, and keep an eye on situations when you can’t. Before jumping on board with geofencing for your product or company, however, be aware the technology is not without flaws. In particular, your user’s privacy may be at risk.

By tracking where we are respective to physical objects or landmarks, geofencing can collect more personal data about the user that originally intended. It’s not only that the technology knows where we are: it ‘sees’ what places we interact with. A geofence set up near a hospital that records regular visits may indicate health issues or loved ones in intensive care. Geofencing surrounding places of worship can indicate religious preferences, while close proximity to an LGBTQ+ nightclub can suggest sexual orientation.

Worse, in addition to tracking, the geofence can be triggered to cause mental harm when the lines are crossed. A prime example includes the Massachusetts Attorney General’s dispute with Copley Advertising. Setting up geofencing around women’s reproductive health clinics, Copley then sent women targeted ads and messages, including “You Have Choices” and links to anti-abortion alternatives. Copley sent information to third-party advertisers, risking targeting with “potentially unwanted advertising based on inferences about [their] private, sensitive, and intimate medical or physical condition.”

If considering a geofencing service, check on applicable privacy legislation first. Are there limitations on the data collection or use? Do you require consent from individuals or particular safeguards? Can uninterested customers opt-out of the service? In some areas, such as Europe, geofencing may only be permitted when users opt-in and agree to use the service prior to deployment.

Other geofencing obstacles 

In addition to privacy concerns, other problems crop up with excessive geofencing use. TSheets, a division of QuickBooks, rightfully brings to mind the example of a Starbucks in New York using geofencing to sent targeted ads every time a user walks by Starbucks. Sounds fine… until you realize such a setup would send out excessive notifications for every walk, ultimately irritating the user.

Depending on their setup, users may also be able to navigate around your geofence without awareness. Geofencing can use different geolocation data to establish if a user is inside or outside the fence, including GPS data or an IP address. What if the user turns off GPS and masks their IP address with a VPN? This is particularly true for services that attempt to limit online access by country. Business Insider notes popular streaming service Netflix continues to battle proxy services that allow access to U.S. content from outside the country. If all geolocation data is disabled or presents a false address, the geofence may not be able to identify who comes, who leaves, or if it should send an alert.

Geofencing services in the future

Are there any applications for geofence not yet in use? Unquestionably. As more devices connect to the internet of things, there’s more potential for items to be identified by location. The infrastructure that supports geofencing is easily available and indeed ubiquitous in the age of smart devices. That makes it possible for anyone to leverage geofencing for any number of purposes. Other areas which may see adaptations to geofencing include:

  • Trucking, warehousing and other logistic services
  • Safety features, such as firearms that only operate within a defined location
  • Management of wildlife and domesticated livestock
  • Hospitality atmospheric controls. Allowing certain technology to turn on or quiet down based on the guest’s location

Additionally, there may be future purposes that will awaken as geofencing is added to other yet-to-be-developed technology or unseen ways the technology itself may evolve. While this article examines current adaptations, geofencing 2.0 may be just around the corner.

Marketing3/31/2021
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