In the world of programmatic advertising, relevance is everything. And few tools are as precise as geofencing — a technology that enables ad campaigns to be triggered based on the user’s exact location in real time.
What is geofencing?
Geofencing creates a “virtual perimeter” around a physical location — like a store, a stadium, or even a competitor’s location. When a user enters (or exits) that area with their mobile device, a programmed action is triggered: from displaying an ad to sending a notification or registering an event.
How is geofencing different from geolocation?
While often used interchangeably, they’re not the same. Geolocation refers to the process of determining a device’s geographic position using technologies like GPS, Wi-Fi, or cellular networks. This allows users to pinpoint their exact location on a map in real time.
Geofencing, on the other hand, uses that geolocation data to create a virtual boundary around a specific area. When a device enters or exits that area, the system can trigger a predefined action, such as sending a notification or activating a particular feature. In short: geolocation provides the “where,” while geofencing uses that “where” to drive specific actions or decisions.
How is it integrated with programmatic advertising?
In programmatic, geofencing enables campaigns to be activated with hyper-local criteria. For example, if a user enters a shopping district, a coffee brand can bid in real time to show them an ad for a nearby promotion. The combination of location data and real-time automation opens up a world of personalized and efficient strategies.
Use cases that make a difference
- Retail: Drive foot traffic to physical stores when users are nearby.
- Live events: Reach attendees during or right after a concert or game.
- Restaurants and QSRs: Deliver instant promotions to prompt impulse decisions.
- Competitor targeting: Reach users who visit rival brand locations.
Key advantages of geofencing in programmatic
- High relevance: Contextual messages based on time and place.
- Advertising efficiency: Better budget usage by limiting activation to strategic areas.
- Precise measurement: Possibility to use footfall tracking and assess physical visits generated.
Precision that requires balance
While geofencing offers a powerful level of segmentation, its implementation must consider several variables: user density, the quality of available mobile data, and the size of the defined perimeter. In some LATAM markets, overly restrictive strategies — such as very small or low-traffic zones — can lead to low delivery or high CPMs.
Moreover, geofencing’s effectiveness depends on the user’s consent to share location data. If tracking is disabled on their device or app permissions are restricted, the system simply can’t detect them within the virtual perimeter. This is further affected by policies like Apple’s App Tracking Transparency (ATT) or Android’s granular privacy controls, both of which have reduced the volume of data available for this type of targeting.
This doesn’t mean geofencing has lost its value — it just requires more strategic and responsible execution. The key lies in finding the right balance between precision, scale, and respect for privacy, using relevant creative and meaningful locations so that targeting works in favor of performance and user experience — not against it.
More and more brands are integrating geofencing into their omnichannel strategies. In LATAM, adoption is growing especially in mass consumption, retail, and entertainment campaigns, thanks to improvements in mobile data quality and the expansion of DSPs that allow for precise geolocation-based targeting. In an ecosystem where attention is scarce, being in the right place at the right time isn’t just possible — it’s necessary.
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