A dentist asked us last month: “My marketing guy wants to do geofencing around the competitor’s office. Is that a real thing or is he making stuff up?”

It’s real. Geofencing uses GPS or cellular data to create a virtual boundary around a physical location. When someone enters that boundary, they can be served targeted ads on their phone — even days later.

How Geofencing Works

You define a geographic area (a fence) around a specific location — your business, a competitor, a relevant venue. When a mobile user enters that area, their device ID is tagged. You can then show ads to those people for up to 30 days.

For example, a roofer could geofence Home Depot locations. Anyone who visits Home Depot and searches for roofing materials gets served the roofer’s ad on their phone later that day.

When Geofencing Works for Local Businesses

High-Traffic Competitor Locations

If your competitor has a storefront that gets foot traffic, geofencing around it can put your brand in front of their customers. A dentist geofencing around a competitor’s office catches patients who are already in the market.

Events and Trade Shows

A landscaping company geofencing a home and garden show reaches hundreds of homeowners who are actively thinking about their yard.

Home Improvement Stores

Service businesses that geofence Home Depot, Lowe’s, and specialty stores reach DIY homeowners who might decide they need professional help.

When Geofencing Doesn’t Work

Low-Traffic Areas

If your competitor is a solo plumber working from his house, there’s nobody to geofence. Geofencing only works when there’s meaningful foot traffic in the target area.

Too-Small Budgets

Geofencing requires a minimum ad spend to reach enough people. At under $500/month, you likely won’t get enough impressions to generate meaningful results. Most geofencing campaigns need $1,000-2,000/month to be effective.

When You Haven’t Fixed the Basics

Running geofencing ads when your Google Business Profile has 3 reviews and your website loads in 8 seconds is wasting money. The geofenced customer sees your ad, Googles you, finds a weak presence, and calls someone else.

The Cost

Geofencing CPMs (cost per 1,000 impressions) typically run $3-15 for local businesses. Click-through rates average 0.3-1.2%, and cost per click ranges from $1-5.

At $1,500/month, a well-targeted geofencing campaign might generate: - 100,000-500,000 impressions - 500-2,000 clicks to your website or landing page - 10-40 phone calls or form submissions - 3-12 new customers

The ROI depends on your average job value. For a dentist ($500-2,000/procedure), 5 new patients from $1,500 in geofencing is a clear win. For a house cleaner ($150/clean), the math is tighter.

Better Alternatives for Most Small Businesses

Before investing in geofencing, make sure you’ve maximized these higher-ROI channels:

  1. Google Business Profile optimization — Free. Generates more leads than most paid campaigns.
  2. Google Ads / LSAs — More intent-driven than geofencing. People actively searching for your service.
  3. Review generation — Free. More reviews = higher ranking = more calls.
  4. Content marketing — Blog posts that rank in Google and AI search. Compounds over time.

Geofencing is a supplement, not a foundation. Build the foundation first.

The Bottom Line

Geofencing is a legitimate marketing tool, but it’s best suited for businesses with established Google presence, $1,000+/month marketing budget, and a clear high-traffic target to geofence.

For most local service businesses, fixing your Google presence and generating reviews will produce better results at lower cost.

Not sure where to start? Run a free audit to see what’s working and what’s not.