There is a lot of confusion around App-based Geofencing and Network-based Geofencing. Each of them has pros and cons and we would like to bring our own experience and clarify a few misconceptions.
According to a recent xAd report, Geofencing has become the most popular location-targeting technique and is used in 55% of location-based advertising campaigns. To date, you have 2 options to create a geofence:
- You can build an app-based geofence that requires you have an app to access GPS data.
- You can build a Network-based Geofence that uses carrier location data and you do not need an app to make it working.
We used to see the following comparison table between the 2 methods:
Main cons for mobile app geofencing seems to be adoption, customer reach, battery life and cost.
Here is now how we have addressed those issues:
Often, we hear that we need to download an app to make our technology working. That is true. But having an app is also key for us as it will provide much more information about consumer behaviour therefore better relevancy in the messages sent.
Furthermore, it will allow your mobile users to make some changes in their preferences on-the-fly and better interact with the other features in the app such as mobile payments, augmented reality…
Most of our customers already have an app or are building one that will be fully integrated with our real-time geofencing solution. To summarise, as long you understand the value of the app, having to install does not seem to be an issue at all.
2. Customer Reach
Clearly, we are not sure why this is a problem…
Smartphone owners are now a solid majority of U.S. mobile subscribers at 61% according to Nielsen. Smartphones became the dominant mobile device in the U.S. in March 2012. Australia’s smartphone penetration rate has maintained its momentum, now at 65% according to Google. It’s up from 52% in 2012 and 37% in 2011.
As a mobile user has to opt-in to use the geofencing service anyway, there is no difference whether she does it in an app, on a web-app or in-store.
3. Battery Life
This is the biggest problem raised by Network-based geofencing enthusiasts. They are right: it is really difficult to create a real-time tracking system with no significant battery drain.
It took our development team almost 1 year to develop and optimise our algorithms. But hey! We did it! Forget the battery drain and focus on your geofences and marketing messages: we did all the hard stuff for you .
For Network based geofencing, accuracy depends on a number of factors, including whether the SMS subscribers’ wireless carrier supports the use of A-GPS location capabilities, which are extremely accurate in outdoor environments, to less accurate options for mobile phones that use G-CID, Cell ID and Enhanced Cell IDs, which will produce a mobile geofence location accuracy ranging from one to five city blocks, or 100 – 5,000 meters.
A Mobile app has access to a large range of sensors and location providers to calculate your position: Wi-Fi signals, GSM Towers, Bluetooth, Accelerometer, GPS and even light and sounds! Our solution use a combination of the most common ones and minimise the use of GPS in order to save your battery. Our benchmarks show an average accuracy around 25 meters indoor and outdoor in urban and suburban areas.
Cost of building an app may vary according to technical and functional requirements.
According to a very good article from AppMuse:
Alex Ahlund, former CEO of AppVee and AndroidApps, and later an advisor to Appolicious, wrote a guest blog article about app sales on TechCrunch. According to that article, a survey of 96 mobile app developers showed the average cost to develop an app was $6,453. An article on OS X Daily about iPhone Development Costs reported that the development cost range for “small apps” is $3,000 to $8,000 and that “more complex or recognized brand apps” can cost $50,000 to $150,000. A well-written article on PadGadget.com explored The Cost of Building an iPad App and suggested the development costs (as compared to design and other costs) range from $12,000 to $150,000 or more.
The cost of developing an app needs to be balanced with the expected ROI you’ll get from it. With geofencing techniques used correctly, it can double the ROI on your marketing campaigns, increase the loyalty of your customers, and reduce operational expenses.
Application development and maintenance costs can be avoided by companies whose needs can be met instead with software-as-a-service (SaaS) offerings. We are such a company: our solution sits in the cloud, is easy to implement, cost-effective and can help meeting your marketing goals. Just give it a go now!
6. Rich Analytics / Rich Targeting
You probably already noticed it in our comparison table, but we have added Rich Analytics and RichTargeting as some key advantages of mobile app geofencing. Indeed, your mobile app can help you collecting and analysing actionable data: purchase habit, latest locations visited, who are your most viral users, unusual spending patterns etc etc.
With our rules engine including demographics and user preferences criteria, you can now get enough information about your most loyal customers to send them a highly personalised message giving an incentive to stop in when they are near your store to make a purchase on their favorite products/brands or alert them exactly where and when it is useful for them.
The ability to send a message based on real time geolocation is very effective but making a message even more relevant to the customer will make it even more appealing.