Conversion Zones What Are They and How Do They Work?

If you are running a geofencing advertising campaign, you need to gather the right data so you can adjust your marketing efforts to meet goals. One important thing you need to figure out is how effective your ads are. Geofencing applications can create conversion zones to track how effective your ad campaigns are. Let’s talk about what conversion zones are and how they work.

What Are Conversion Zones? 

A conversion zone is a geofence that tracks conversion rates of geofencing ad campaigns. Conversion zones are a means of figuring out how effective your geofencing advertising efforts are and what your total geofencing marketing ROI is. 

Conversion zones keep track of which customers have received geofencing ads then notify when those customers enter one of your locations. They are a powerful tool for measuring your marketing campaign’s conversion rates (conversion = customer takes a desired action as a result of your ads).

How Do Conversion Zones Work?

Conversion zones are actually pretty simple. First, a company sets up geofences around several “target zones” where they want to focus their advertising efforts. They then set up a virtual “conversion zone” around one or more of their locations. 

When a customer enters one of the target locations, they get a push notification to their mobile device from the advertiser. If the customer then enters the conversion zone and has been previously targeted with the advertiser’s ad, the geofence recognizes that user and counts it as a conversion. 

In other words, conversion zones get set up to tell you how many people visit your locations as a result of seeing your ads. Here is a simple example of how this process might work in the real world:

Say you own a chain of hamburger restaurants. You would likely want to target your advertising at customers who eat at your competitor’s restaurants. You could create geofences to push ads to people who visit all your competitor locations. You could then build conversion zone geofences around your locations to keep track of how many customers who have been targeted with your ads visit your restaurants. 

With all of this data, it would be easy to see how many people are targeted with your ads then find their way to your restaurant. You can use these numbers to calculate your total visit rate (TVR). 

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Say you served 100,000 ads last month and 400 of those who saw your ads came to your restaurant. That would correspond to a TVR of 0.4%. The higher the TVR, the more effective your geofencing campaigns are. 

Conversion zones are just another one of the reasons why geofencing marketing has exploded in the past few years. The ability to track real-time conversion rates across geofenced locations is a powerful metric for judging ROI on marketing efforts and allows for more precise marketing strategies.