Why is the Active Geofencing Market Growing | Key Drivers & Forecast 2025

Active Geofencing Market Size Growth Rate

Why is the Active Geofencing Market Growing

The evolution of technology also means the evolution of marketing. Geofencing is now another tool in the marketing toolbelt for targeted location-based marketing. Geofencing can be described as creating a virtual barrier by using GPS or RFID technology. Geofencing enables businesses to set up virtual boundaries that are triggered whenever a target audience enters or exits a specified geographic area. Specifically, targeted messages or notifications can be sent, as well as location-based deals or promotions. Geofencing is typically considered a passive application by the user because the user has to install a specific app, or enable location services for geofencing to work. Active geofencing takes this a step further by using background services to determine the user's location without an app, or GPS signal.

How Does Active Geofencing Work?

Active geofencing employs Bluetooth Low Energy (BLE), Wi-Fi, Near Field Communication (NFC), and other technologies to cross-reference the physical location of a user. Specifically, geofencing technology alerts businesses when a user enters or exits a prescribed geofenced area. Businesses can use geofencing technology to set virtual boundaries around a physical location and/or the designated areas of events or shopping centers that they wish to target. If a user's device enters the geofenced area, that device will send a signal to the business's server alerting it that the user entered the geofenced area. 

The business then may have the server respond to that signal by triggering specific user actions such as sending a push notification or targeting specific advertisements on the user's device. In addition, the server may track and save demographic data related to when and how often users enter or exit the geofenced area, which would assist businesses in gaining customer insights about users' behaviors and preferences.

Active Geofencing Industry Drivers

Numerous key drivers contribute to the development and adoption of active geofencing in the market. These include:

Growing use of smartphones and location-based services: As smartphones have become increasingly popular and broadly used, consumers are more open to share their location data with businesses in order to receive customized services. This has consequently created opportunities for businesses to utilize location-based technologies such as active geofencing to engage with consumers instantly.

Increasing need for targeted marketing strategies: In today's competitive market, businesses are constantly looking for ways to stand out and attract customers. Active geofencing allows companies to send personalized and relevant messages or offers to potential customers based on their current location, leading to higher engagement rates and conversion rates. This targeted marketing approach not only helps businesses reach their target audience but also increases the chances of converting them into loyal customers.

Improved customer experience: With active geofencing, businesses can send notifications or offers in a timely and relevant manner to their customer based on their location and create a more customized and convenient experience. For instance, a retail store can push a notification with a discount coupon to customers when they enter the geofence area created for their store. By coupling the products and services offered by businesses with the customer experience, customer satisfaction and brand loyalty are enhanced.

Enhanced data collection and analysis: By employing active geofencing technology, an organization can collect valuable data on customer habits and opinions, such as the frequency with which they enter a specific location and the type of products they’re interested in. An organization can then use the gathered information to enhance the marketing platform and tailor their offerings to have specific audiences that can be targeted.

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