How Much Does Geofencing Cost?
As a business owner, you always look for innovative ways to reach more customers and increase your profit margin. If you’re unfamiliar with geofence marketing, it’s time to learn more! Geofence marketing is a powerful way to target potential customers in your area.
Why is Geofencing Important?
Did you know that 47% of consumers surveyed stated they would likely shop from a retailer offering promotions when nearby? This underscores the critical role geofencing plays in attracting nearby customers. By tapping into this technology, you can position your business right before these active buyers.
Benefits of Geofencing:
- Targeted Engagement: Reach consumers who are most likely to convert because they are near your store.
- Competitive Edge: Stand out by offering timely promotions that can sway potential customers away from competitors.
- Increased Foot Traffic: Drive more in-store visits through location-based promotions, enhancing overall sales.
What is Geofencing?
Geofencing is a marketing tool that targets people who enter a predetermined area or have recently visited a geofenced location. For example, you can geofence a competitor’s store and serve ads to people who visit that store. At the same time, you can geofence a trade show or convention center and serve ads to people who attend that event.
Geofencing Platform Devices
It is important to note that geofencing campaigns cover all platform devices, including cell phones, desktops, laptops, and even televisions. This is usually done through the Wi-Fi connection. When someone comes home and their cell phone docks with their Wi-Fi connection, agencies distribute the ads to their devices.
The cost of geofencing marketing depends on how you want to distribute your ad. For instance, video geofencing costs more than static display geofencing. And Connected Television geofencing costs more than video geofencing. The good news is that you can control your budget by choosing the right distribution method for your needs.
To know the cost, we need to talk a bit about distribution methods. Generally, marketers distribute ads in four (4) different ways:
- Targeted Display Geofencing
- Video
- Connected Television
- Podcast Geofencing Ads
Smartphone users devote most of their mobile activity to apps rather than web browsing. 86% of their smartphone time is spent engaging with various applications. This leaves a mere 14% of people surfing the internet through their web browsers.
Targeted Display Geofencing Ads
Targeted display geofencing ads are the most common type of geofence marketing. You can distribute these ads to your audience who have physically visited a geofenced area or target location. Marketers collect the data from the geofenced area and serve 3-5 ads a day for up to 30 days. When the users visit certain websites and apps, these ads appear programmatically.
Programmatic ad distribution is an automated way of buying and selling ad space. It allows buyers and sellers to connect and transact without the need for a human mediator. This type of geofence marketing is very efficient, making it one of the most popular methods among businesses of all sizes.
If you’re diving into geofencing digital marketing, understanding the standard dimensions for static ads is crucial. These sizes ensure your ads display correctly across various platforms and devices.Common Dimensions for Geofencing Static Ads
- 300 x 50: Often used for mobile banners.
- 320 x 50: A popular choice for mobile advertising, providing more visibility without obstructing the user experience.
- 300 x 250: Widely adopted for desktop and mobile, offering a good balance between size and impact.
- 728 x 90: Known as leaderboard ads, these are typically positioned at the top of a webpage.
- 250 x 250: Square ads that are flexible for different placements.
- 160 x 600: Skyscraper ads designed for narrow sidebars.
- 300 x 600: Also called half-page ads, offering more space for creative content.
- 970 x 90: Large leaderboard format, ideal for desktops.
Typical CPM Rates for Geofencing Video Ads
Geofencing video ads can be a powerful tool for effectively reaching targeted audiences. Due to the engaging nature of video content, this method has shown strong performance, particularly for sectors like personal injury attorneys and medical groups. However, the cost can be a factor to consider, mainly because the availability of video ad space is limited. Typical CPM (Cost Per Thousand Impressions) rates for geofencing video ads generally range between $15 and $17. In some instances, advertisers may encounter rates as high as $25 per CPM, although such rates can be considered on the higher end and might not always align with a cost-effective strategy. Staying within the standard range for most businesses can help balance engagement and expenditure.Connected Television
The third type of geofence marketing is connected television geofencing. Generally, you serve Connected television geofencing ads to users who have physically visited a geofenced area or target location. You distribute these ads on different connected television platforms, such as Roku and Amazon Fire TV. Like targeted display geofencing and video geofencing, the ads are served programmatically.
Understanding CPM Rates for OTT and Connected TV Advertising
Understanding the costs is crucial when exploring advertising options on Over-The-Top (OTT) and Connected TV platforms. Cost Per Thousand Impressions (CPM) is the standard metric to determine how much you’ll pay to reach a thousand viewers.Range of CPM Rates
The cost for CPM in OTT and Connected TV advertising generally falls between $25 and $60. This range can vary based on several factors, including:- Platform Choice: Different streaming platforms, like Hulu or Roku, may have varying CPM rates.
- Targeting Capabilities: Advanced targeting, such as aiming ads at specific demographics or interests, can affect the rates.
- Ad Placement and Time: Premium placements and peak viewing times can increase costs.
Enhancing Advertising Effectiveness
Boosting your advertising strategy is possible by combining CPM with innovative marketing techniques. For example:- Geofencing: Integrating geofencing with OTT advertising can enhance ad delivery precision, allowing you to target audiences more effectively based on their location.
Podcast Geofencing Ads
Podcasting is a new and powerful way to get audio ads in front of targeted audiences. This type of geofence advertising targets listeners of specific podcasts.
Due to the rise of podcasts, geofence marketing agencies can broaden the horizon of targeting customers innovatively. Now, businesses can serve ads to listeners of specific podcasts. This geofencing type is very effective because it allows businesses to target a specific audience with laser precision.
Podcast geofencing is a new and exciting way to reach your target audience. Hence, if you’re looking for a cost-effective way to geofence marketing, podcast geofencing is a great option.
When planning the number of geofences for a campaign, there are several factors to consider:Understanding Geofencing CPM Costs for Static Ads
The cost per thousand impressions (CPM) can vary greatly when considering geofencing for static ads. Typically, CPM charges start at around $5.00. This rate is often available if you go directly to platforms such as Simpli.fi and commit to a significant monthly advertising spend, usually a minimum of $20,000. However, not all companies can access these lower rates. Sometimes, larger organizations, even those working with smaller businesses, set their CPM rates as high as $12.00. Despite this being a common practice, it can be excessively costly for advertisers, as it doesn’t always provide the best return on investment.Cost Breakdown Example
Consider a scenario where you have a budget of $1,000:- At a $12.00 CPM rate, you would receive approximately 83,333 impressions.
- Given a typical click-through rate (CTR) of 0.1% in programmatic display advertising, this translates to about 83 clicks to your website over a month.
Evaluating Additional Services and Features in CPM Rates for Geofencing
When assessing CPM rates for geofencing, it’s crucial to look beyond the initial cost and dive into the additional services and features offered. Here’s a guide to what you should consider before making a decision:1. Platform Management
One of the first things to determine is whether the platform is self-service or offers managed services.- Self-Service: You’ll need to train your team to navigate the platform and launch campaigns independently. This option might be more cost-effective but requires time and expertise.
- Managed Services: A team handles everything for you, from setting up campaigns to managing execution. This option can save time and ensure professional handling, often worth the extra cost.
2. Creative Development
Does the service include creative ad development, or will this incur an extra charge? Some platforms bundle creative services within their fees, while others treat them as add-ons. Understanding this distinction helps in budgeting and ensures you’re not blindsided by unexpected costs.3. Analytics and Reporting
Having access to robust analytics and reporting is vital. Check if the platform offers a comprehensive dashboard that allows 24/7 access to real-time reports. Insightful data can guide your campaign adjustments and strategy, providing clear metrics for success.4. Advanced Targeting Options
Look for platforms offering advanced targeting features such as:- Day Parting: Schedule ads to appear at optimal times of the day.
- Behavioral Targeting: Focus on users with specific behaviors or interests.
- Contextual Targeting: Display ads in relevant content or settings.
Budget Constraints
The first factor to examine is your campaign budget. Many agencies might charge per geofence, so requesting too many geofences with an inadequate budget could lead to rapid depletion of funds. Instead, align your number of geofences proportionally to your budget.Campaign Goals
Consider your campaign’s specific objectives. Are you aiming to cover large, distinct audience segments, or do you need precision targeting for niche markets? The complexity and scope of your goals will influence how many geofences are necessary.Efficiency and Management
Uploading a large number of geofences can be time-consuming and may lead to management challenges. Thus, striking a balance is crucial. For example, a reasonable starting point might be setting up 10-20 geofences for every $1,000 in monthly budget to maintain manageability.Pricing Structures
Understand the pricing structure of your service provider. While some charge by the number of geofences, others may offer bundled packages or demand additional fees. It’s worth negotiating or asking for any concessions if extra charges apply.Performance Metrics
Finally, analyze your campaign’s performance metrics. Regularly reviewing data will help determine if the current number of geofences is adequate or if adjustments are needed to optimize reach and engagement. By considering these factors, you can design a strategic approach to using geofences that maximizes your budget and effectively meets your marketing goals.The Cost of Geofencing Advertising
Evaluating CPM Rates for Geofencing Services
When considering CPM rates for geofencing services, diving deeper than just comparing numbers is essential. Each geofencing provider offers distinct features and services that can significantly impact your campaign’s effectiveness. Here’s a guide to help you evaluate:1. Service Type: Self-Service vs. Managed Services
Decide whether you prefer a self-service platform, where you and your team will manage the campaign, or a managed service, which provides a dedicated team to handle everything for you. Managed services can save time and expertise, particularly for those unfamiliar with geofencing intricacies.2. Creative Development
Determine if the service includes creative ad development within the CPM rate. Some platforms charge extra for designing ads, while others bundle it within their service—clarifying this can prevent unexpected expenses.3. Analytics and Reporting Tools
Access to a comprehensive analytics and reporting dashboard is crucial. Ensure that the platform provides detailed insights and real-time data access, allowing you to monitor campaign performance round-the-clock.4. Targeting Options
Check if the provider offers advanced targeting features such as dayparting, behavioral targeting, and contextual targeting. These options allow for more refined audience targeting, maximizing the efficiency and returns of your ad spend. By addressing these factors, you can gain a holistic understanding of what you’re investing in and align the CPM rate with the specific needs of your business. This strategic approach ensures you don’t just get a service, but a tailored solution that amplifies your marketing efforts.Now that we’ve covered the three types of geofence marketing, let’s discuss the cost. The cost of geofence marketing varies depending on the type you choose and the size of your target audience.
When evaluating geofencing costs, asking the right questions about the platform and services is essential to ensure you make the most informed decision. Here’s what you need to consider:Minimum Monthly Spend for Geofencing Marketing Campaigns
When planning a geofencing marketing campaign, it’s important to understand the typical financial commitments required. Most companies impose a minimum monthly spend to ensure effective use of their platforms.- High-End Platforms: For instance, if you’re considering top-tier providers like Simpli.fi, expect to allocate between $10,000 and $20,000 per month. These higher costs often reflect access to advanced features, such as robust programmatic display capabilities and sophisticated data technologies.
- Smaller Budget Options: On the other hand, some platforms cater to smaller businesses by offering more accessible minimum spend requirements, typically starting around $1,000. These options enable small enterprises to experiment with geofencing, potentially converting digital engagement into tangible customer growth.
What to Expect from a $1,000 Geofencing Budget with a $12.00 CPM Rate
Impressions Breakdown
With a $1,000 budget and a cost per thousand impressions (CPM) of $12.00, you can anticipate a substantial reach. Here’s the math:- A $1,000 budget divided by $12.00 CPM equals around 83,333 impressions.
Clicks Estimation
To understand the clicks you might receive, it’s crucial to consider the industry-standard click-through rate (CTR) for programmatic display ads, typically around 0.1%.- With 83,333 impressions and a 0.1% CTR, you can expect about 83 website clicks.
Platform Features
- Service Type: Determine whether the platform offers self-service capabilities or managed services. Do you need to train yourself and your team to navigate and launch campaigns, or does the provider manage that process for you?
- Campaign Execution: Find out if the provider will handle the setup and execution of campaigns, especially if you’re interested in white-label or direct client services. This can save time and ensure professional results.
Creative and Development Support
- Ad Creation Assistance: Understand if creative ad development is included in the service package or if it will incur additional fees. Having experts design your ads can elevate the campaign’s effectiveness.
Analytics and Reporting
- Dashboard Access: Investigate the analytics and reporting features. Will you have unrestricted, 24/7 access to real-time reports? A comprehensive dashboard is crucial for tracking performance and making data-driven decisions.
Targeting Capabilities
- Advanced Features: Inquire about additional targeting options, such as day parting, behavioral, and contextual targeting. These layering mechanisms can enhance the precision of your campaigns, targeting the right audience at the right time.
Understanding Charges in Geofencing Marketing
In geofencing marketing, pricing often depends on the number of geofences you want to implement. This strategy involves setting virtual boundaries around specific locations to target audiences more precisely. But how exactly do these charges work?Charging Based on Geofence Count
- Higher Geofence Numbers = Higher Costs: Some agencies charge based on the number of geofences you request. This makes sense since setting up numerous geofences can be time-consuming and resource-intensive.
- Impact on Budget: Creating an extensive number of geofences with a limited budget can quickly deplete resources. For instance, if you’re operating with a $1,000 budget, creating too many geofences might stretch your resources thin.
- Suggested Geofences Per Budget: As a general guideline, for a budget of around $1,000 per month, it’s advisable to target 10 to 20 geofences. This balance helps manage costs while still effectively targeting desired areas.
What to Consider When Charged Per Geofence
- Evaluating Additional Costs: If you’re being charged for additional geofences, inquire about any potential benefits or concessions that come with extra charges. It’s crucial to understand what value these additional geofences bring.
- Comparative Pricing: Make sure to compare offers from different providers. Some might offer package deals or more flexible pricing structures than others.
Targeted Display Geofencing Ad Rates
The cost of display geofencing ads depends on the size of the area you are geofencing and the number of impressions you want to serve. Campaigns start at $800.
Understanding Standard CPM Costs for Geofencing Ads
Understanding the cost per thousand impressions (CPM) is crucial for budgeting and effective advertising when it comes to geofencing and the use of static ads.CPM Range
- Direct Platform Costs: If you approach platforms like Simpli.fi directly, CPM charges can start around $5.00. However, remember that this rate often requires a substantial ad spend, sometimes upwards of $20,000 monthly.
- Agency and Service Providers: Other providers, mainly those catering to large organizations and smaller businesses, can charge CPM rates as high as $12.00.
Evaluating Cost Effectiveness
High CPM costs can quickly eat into your advertising budget. For instance, with a $1,000 budget at a $12.00 CPM rate, you would achieve about 83,333 impressions. While this seems significant, after considering factors like impression capping and a typical click-through rate (CTR) of about 0.1% for programmatic displays, you might only see 83 clicks.Takeaway
It’s important to shop around and compare offerings to ensure that you’re getting the most value for your investment. A deeper understanding of these rates can help you make more informed decisions that align with your marketing goals and budget constraints.Video Ad Rates
The cost of video geofencing depends on the length of the video, the number of impressions you want to serve, and the size of geofence you want. Campaigns start at $1900.
What Are the Standard CPM Costs for Video Ads in Geofencing?
Video ads have shown remarkable effectiveness in targeting potential customers through geofencing. Industries such as personal injury law firms and medical institutions often see impressive engagement rates with these ads. However, their effectiveness comes at a higher price due to limited inventory in the digital ad space.Cost Expectations:
- Typical CPM Range: The cost per mille (CPM), or cost per thousand impressions, for video ads in geofencing typically falls between $15 and $17.
- Premium Pricing: Some advertisers may encounter rates as high as $25/CPM, although this is generally considered above the standard pricing threshold.
Strategy Tips:
- Mix Ad Formats: Your geofencing strategy can benefit from combining video ads with static ads. While video ads might demand a slightly higher investment, they often deliver superior engagement and help establish a more robust connection with the audience.
Connected Television Ad Rates
Television is still the king. Connected television campaigns can dramatically increase the entire sales funnel, from brand awareness to direct response.
As you can see, the cost of geofencing marketing varies depending on the type of geofence marketing you choose and the size of the area you want to cover. Meanwhile, the cost of connected television geofencing depends on the length of the video, the number of impressions you want to serve, and the geofenced area. Campaigns start at $4500.
Podcast Geofencing Ad Rates
Podcast geofencing is a new and exciting way to reach your target audience. The cost of podcast geofencing depends on the length of the audio clip, the number of impressions you want to serve, and the size of your geofence. Campaigns start at $2500.
Geofence Agency Pricing Structure
Regarding geofencing, the pricing structure can vary significantly depending on the provider. Some companies charge based on the quantity of geofences you wish to set up. The reasoning behind this is rooted in both time and resource management. For instance, if you plan a campaign with a budget of $1,000 and aim to implement 1,000 geofences, you might face high costs. This is because each geofence requires time for configuration, and deploying a large number can quickly deplete your budget. However, not all agencies follow this model. Instead, they might recommend structuring your campaign for optimal efficiency. A common suggestion is to allocate 10 to 20 geofences for every $1,000 of the monthly campaign budget. This balance ensures your budget is effectively utilized without overwhelming costs. If a provider does charge for additional geofences, it’s crucial to understand what extra benefits or services accompany this cost. Asking about these can ensure you maximize value while keeping your expenses aligned with the campaign goals. Always evaluate the trade-offs and inquire if bundled options could give you more flexibility or provide other advantageous features.Geofence Marketing Targeting Options
Several targeting options available beyond geofencing can enhance your advertising strategy. These options provide a more refined approach, allowing you to reach your ideal audience effectively. Here’s a breakdown of some popular targeting techniques:Day Parting
- Definition: Tailors your advertising schedule to display ads during specific times of the day or week.
- Benefits: Maximizes ad visibility when your target audience is most active, ensuring your budget is spent when engagement potential is highest.
Behavioral Targeting
- Definition: Data on consumers’ online activities and interests are used to deliver more relevant ads.
- Benefits: Creates a personalized user experience, increasing the likelihood of engagement by aligning ads with the audience’s browsing habits.
Contextual Targeting
- Definition: Place ads on web pages relevant to the content being viewed by potential customers.
- Benefits: Enhances the chance of ad interaction by aligning with the user’s current content consumption.
Summarizing the Benefits of Geofence Marketing Campaigns
Now that we’ve covered the cost of geofence marketing, let’s talk about how geofence marketing can benefit your business.
Geofence marketing is a powerful way to reach your target audience. It allows you to promote your business through display ads, videos, etc., to people who enter a geofenced location. Therefore, you can track and target audiences depending on their behavior, location, and potential to be your customer.
There are four main types of geofence marketing: targeted display geofencing, video geofencing, connected television geofencing, and podcast geofencing. The cost of geofence marketing varies depending on the type of geofence marketing you choose and the size of your target audience.
You can hit right at the bull’s eye with targeted display geofencing, which is why it works great for brand awareness and top-of-the-funnel marketing. Almost every major brand has a targeted display advertising campaign.
Video geofencing works well for mid to bottom-funnel sales strategies. It is best if brand awareness is already in place. It helps to engage your audiences with visualization.
Connected television geofencing offers an engaging consumer experience. Thus, it works the entire sales funnel, from brand awareness to direct response.
Podcast geofencing is comparatively a newer way to connect with your audiences through audio medium. It is a cost-effective way that works effectively for top to mid-funnel sales processes.
Analytics and Reporting Access: What to Expect
Regarding analytics and reporting, you can anticipate a comprehensive dashboard designed for intuitive navigation and in-depth insights. You’ll have access to a variety of features to keep you informed and up-to-date, including:- 24/7 Access: View your reports anytime, anywhere. You get round-the-clock access to your data at the office or on the go.
- Real-Time Data: See how your campaigns are performing in real-time. There is no need to wait for daily updates—your dashboard refreshes continuously with the latest information.
- Custom Reports: Tailor your reports to focus on the metrics that matter most to your business. Whether you need a detailed breakdown or a high-level overview, you can customize your views accordingly.
- Visual Insights: Use graphs, charts, and other visual tools to better understand complex data trends. This will help you identify patterns and actionable insights.
- Export Options: Generate and export reports in various formats, such as PDF and Excel so that you can share insights with your team or clients effortlessly.