Geo-targeting vs Geo-fencing. What’s the Difference?

The world of online advertising contains a lot of jargon and terminology. Many terms are abbreviated, used interchangeably with other terms (think remarketing and retargeting), and it can get confusing! One great example of terms that are confused frequently are the terms “geo-targeting” and “geo-fencing.”

In property development, home builder, and 55 plus advertising, both geo-targeting and geo-fencing are used to target the right audiences at the right time, with the right message. However, the strategies are different. Geo-targeting is a more traditional and more frequently used tactic. Geo-fencing is becoming more and more popular as the technology and accuracy improves. But, what’s the difference between the two?

Let’s start with the basics of geotargeting. At its core, geo-targeting refers to delivering advertising messages to a select group of people based on users’ physical location. When setting up a paid media campaign, it’s possible to geo-target based on zip codes, cities, states, or even countries, that are individually selected. That usually looks something like the below example from a Google paid search campaign.

Areas in blue are targeted based on zip code and a radius around Philadelphia; areas in red are zip codes that are excluded from the geo-targeting for the paid search campaign.

Geo-targeting refers to targeting based on users’ location of interest. When setting up a paid search campaign this is an important distinction. As shown in the graphic below, a Google paid search campaign provides three geo-targeting options.

Option #1, which is the default and Google-recommended option, is a combination of options #2 and #3. It’s important to remember that the option chosen here has a direct impact on the keywords (and negative keywords!) used in the campaign.

Geo-targeting has evolved over time to also include the ability to layer in targeting options like demographics (gender, age, income, marital status, etc.) and psychographics (activities, interests, online habits,)** which can result in some pretty well-targeted and highly-relevant campaigns!

**It’s important to note, particularly for property development, home builder, and 55 plus community marketing campaigns, most digital marketing platforms (Google, Microsoft Advertising, etc.) still allow demographic information to be layered in with the geo-targeting for campaigns. For “housing” campaigns, Facebook (and Instagram, which is owned by Facebook), however, no longer allows demographic (and most psychographic) information to be used for targeting, in order to be in compliance with the Fair Housing Act. In addition, housing advertisers on Facebook are not able to target by specific zip codes.  

In summary, geo-targeting is typically used to reach larger segments of people (such as entire zip codes, cities, states, etc.) in combination with specific demographics and psychographics, to narrow down the audience.

On the other hand, geo-fencing is typically used to target very small segments of people in particular locations such as stadiums, universities, neighborhoods, or shopping centers.

Geo-fencing refers to drawing a virtual barriers or “fences” around a location using users’ GPS or IP addresses. It’s a great solution for businesses who have an idea of where their target audience is hanging out.

For example, a 55 plus or active adult community (let’s call it “Community A”) could geo-fence a competitor community (“Community B”) to target older adults who are checking out the other community. Then, after the prospective homebuyers leave Community B, they would see ads on their mobile devices and/or computers for Community A. Then (and this is the coolest part!), we’re able to report on the number of users who see the ads and, as a result, come to visit your business. Geo-fencing is very precise and very localized.

Here’s how it works:

  • Choose your “target fences.” These may be competitors or places you know your audience frequents (colleges, gyms, large employers, medical offices, etc.).
  • The geo-fencing system captures the device IDs of users who enter these zones.
  • Upload physical mailing addresses(optional). You can upload up to one million addresses to target with geo-fences.
  • Targeted users then see your ads across devices. Ads appear in mobile, app, video, display, native and social content. Below are examples of where ads might show.

  • Designate your conversion fences. These are places like your sales office, model homes, etc., where your team has an opportunity to speak to the targeted user, face-to-face.

The great thing about geo-fencing is that it provides offline (foot traffic) attribution for online spend, and can complement addressable TV, direct mail, and other marketing campaigns.

So, there you have it, geo-targeting and geo-fencing explained. Both are commonly used in online marketing for home builders, property developers, and active adult communities. If you’d like more information on how to get started with either or both strategies to increase your qualified leads and foot traffic, contact us today!

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