Location-based marketing: Thoughts on geofencing

Guest author:
András Csenterics
lawyer
Réti, Várszegi és Társai
Ügyvédi Iroda PwC Legal

The COVID-19 pandemic has changed consumption habits and made the online world – and online marketing – more important. One of the latest tools is geofencing, which in the retail world is basically using the GPS coordinates of a person’s mobile phone to target them with personalised advertising messages when they enter a certain geographic area. These targeted messages usually take the form of some kind of message sent by a smartphone app, which is called a push notification.

This type of marketing creates big advantages for the businesses that use such push notifications, but at the same time the technology also has certain legal, primarily data protection aspects. For instance a person’s GPS position qualifies as personal data, so marketing activities based on this must comply with GDPR rules. Consumers targeted with push notifications must be informed in detail about how geofencing works in advance, and they need to give their consent to receiving such messages. It must also be taken into consideration that personalised marketing messages relying on the target person’s geographic location is basically a kind of ‘profiling’, which generates extra tasks for the data manager.

Geofencing offers many advantages to businesses if they use this technology for marketing purposes, but they shouldn’t forget about the fact that they must also make efforts to keep the whole thing legal. If they can’t guarantee this, the advantages they hoped for will turn into unexpected damages, for instance in the form of having to pay a fine for data protection violation. //