When you walk down the aisle of the grocery store and a coupon for peanut butter pops up on your phone it is convenient for you and a great selling tool for the retailer. The technology that allows merchants to target specific messages based on your geographic location is called geofencing.

How does Geofencing Work?

Geofencing tools use the global positioning system (GPS) or radio frequency identification (RFID) to define geographical boundaries. Every time consumers allow applications on their phone to access their location, that data becomes available for geofencing software. Every check-in on Facebook or every time Google maps is accessed, the information is available and businesses can use the location data to send relevant marketing messages.

Create a Virtual Barrier

Marketers using geofencing can define a geographic area and essentially put a virtual fence around it. The area may be as small as a block wide or several miles. Any time someone crosses the geofence and moves inside the virtual barrier, extremely targeted messages can be sent to a potential customer. The ads may “follow” you around the internet, popping up on different sites once you have crossed into the area.

Companies can use the technology to put a fence around a competitor’s location and show ads to consumers as they walk or drive by, offering a better deal. The best case is being able to deliver a message to someone when they need your services the most. A criminal lawyer, for example, might use the technology to push messages as someone enters the office of a bail bondsman.

The Downside of Geofencing

All this sounds great to marketers, but what about consumers who didn’t necessarily sign up to get messages pushed at them? There is a point at which the technology moves beyond data collection into the realm of invasion of privacy, for example, emergency rooms. Personal injury attorneys (sometimes called ambulance chasers) are always looking for a way to get their marketing messages in front of people who have just been injured. While not everyone in an emergency room needs legal services, a significant percentage might. So some enterprising lawyers have been using geofencing to reach their target market.

While the argument might be made that geofencing is the same as handing out brochures or having advertisements in and around the hospital, consumer rights activists and Massachusetts’ attorney general, Maura Healey, doesn’t see it that way. Healey’s office was the first in the country to go after geofencing technology, catching people while they are seeking care.

“Private medical information should not be exploited in this way,” Healey says. “Especially when it’s gathered secretly without a consumer’s knowledge, without knowledge or consent.”

So Where is the Fence?

Geofencing looks to be one of the next big tension points in the expanding conversations about privacy as technology becomes more sophisticated and consumers more sensitive.

Which side of the geofence are you on? Is it good marketing or a creepy invasion of privacy?