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Blog Banner of What Is Geofencing and How Does It Work

What Is Geofencing and How Does It Work?

Geofencing is an important technology, especially with the increasing number of intelligent devices. Existing for a few years, businesses now see geofencing’s full potential. One of the predominant uses of the technology is in the marketing domain for targeting local ads.

Another domain that uses geofencing technology is the employee attendance tracking system. According to market reports, the geofencing market is expected to reach US $ 1,825.30 million by 2022, growing at a Compound Annual Growth Rate (CAGR) of 27.5%.

What supports such buzzing growth of this technology, and how it works?

Let’s find out.

Geofencing is a location-based service for an app or software that uses GPS, Wi-Fi, RFID, or cellular data to trigger a pre-programmed action when a device enters the pre-determined virtual boundary set up around a location as a geofence. The technology can trigger several actions depending on the application.

In advertising, it is used for mobile push notifications, trigger text messages and alerts, or displaying targeted ads on social media. In security applications, geofencing tracks vehicle fleets and disables certain technologies, or provides authentication. Some secured areas use a geofence to manage traffic.

Whenever someone enters or leaves the secured area, an alert is generated. Businesses can benefit from employee attendance systems like Truein that use geofencing to monitor workers on the field, automate the time and attendance recording, and ensure employees are present at the designated site when punching in.

How geofencing works?

First, a developer or administrator has to set up a virtual boundary for a specific location in GPS or RFID-enabled software. It is the same as setting location on Google Maps when we put the radius for a certain distance. In mobile applications, Google Maps API is used to enable geofencing.

Once the targeted device enters the virtual geofence, the response is triggered. In mobile applications, the geofence is hard coded within the application because the users have the option to opt-in to enable location access for the application for the geofence to work.

An example of such use is when people visit a concert or an event. They get an option to download an app automatically to get more information and instruction about the event. Modern devices like iPhones also have geofencing capabilities that users can implement.

For instance, iPhone users can set up iOS Reminders triggered when they reach a chosen address or location. The functioning of a geofence is based on the “if this, then that” command. In this approach, the app’s action is programmed to trigger a movement based on another activity.

For instance, some home automation apps have set up rules like “If I am 3 feet away from the door, turn on the lights.” We used examples of mobile applications to make it easier for you to understand the work. Geofencing is a technology that has myriad applications in the shipping industry, agriculture, mining, and drone technology.

Geofencing applications and uses

As the use of mobile devices is rising, the scope of geofencing technology is broadening. Today, it has become a standard practice for many businesses to use geofencing to identify and target prospective customers. The number of opportunities it offers for micro-managing actions is vital for marketing and social media applications.

It is an easy way to target competitors’ customers with geofencing. Many retail and hospitality businesses set up a geofence around their competition. When customers approach the boundary, they get a push notification with an offer prompting them to visit the other establishment.

Similarly, retail stores use geofencing to offer customers coupons when they enter the vicinity of their stores. But let’s take a closer look at what geofencing is used for in different sectors:

1. Social networking for location-based stories, posts, and ads

The most recognizable use of geofencing is by social networking websites and apps to serve location-based content to users. For instance, Snapchat has location-based filters, stickers, and shareable content, made possible due to geofencing.

Facebook also uses the same technology to provide more relevant content like nearby events, people, or offers. Google’s Adwords ad network uses geofencing to trigger ads at a particular location. When searching for a service or content, Google ads are served based on your location.

2. To send in-store promotions to users

It is easy to understand that the ability to target an audience based on its location opens limitless marketing opportunities. From serving location-based ads to delivering in-store promotions, geofencing can help businesses increase the ROI on their advertisement and marketing spending multifold.

When you can target an audience based on their location, you save costs and spend on running broader marketing campaigns. Digital ads are entirely dependent on geofencing technology to provide targeting features. With millions of brands running billions of ads, it is impossible to reach with right people with the right offers without this technology.

The caching technology, when combined with geofencing, allows advertisers to serve ads to people who visited the geofenced location even when they leave.

3. Security for people and devices

There is no denying that geofencing can be an invasive technology, but it is solely dependent on how developers and engineers propose to use it. On the contrary, geofencing can enable more security for locations, people, and devices. An example is Android’s ‘Locate My Phone’ or ‘Unlock My Phone’ features that work based on the device’s location.

4. Companies use it to monitor employees' location

Companies use geofencing for workforce management. There are software solutions like Truein that allow companies across industries to track employee time but with the added assurance of ensuring workers are indeed present at the geofenced location when they clock in.

It is making it easier for companies where workers spend most of their time off-site fieldwork to manage and accurately pay the employee. Truein is a face recognition employee time tracking and attendance software. Its cloud-based architecture supports geofencing by default.

You can easily automate time cards and monitor the location of employees when they are clocking in or out. With Truein you can also check on workers taking too long or frequent breaks during work. Apart from location targeting, it also offers overtime calculation, leave management, attendance policy creation, and easy integration with most payroll software.

The future of geofencing

If you pay attention to the “targeting” aspect of geofencing technology, you can assume how it can be risky in specific scenarios. Location-based marketing has privacy concerns, and many people are uncomfortable with the idea of their location being tracked by apps or businesses.

This is stirring laws, and Massachusetts became the first state to enact a consumer protection law restricting location-based marketing. Despite privacy concerns, geofencing technology is steadily growing. Experts believe the growth is sustainable because of the “technological advancements in the use of spatial data and increasing applications in numerous industry verticals.”


We hope this article gives you a clear explanation of what geofencing is and how it works. With the digital penetration of the internet, it is possible to reach people with the offers and services they want and when they want them. Geofencing has applications in many industries and is expected to keep growing amidst privacy concerns.

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