Geo-fencing is a variation on the more commonly known geo-targeting – that is, restricting the placement of digital ads so they only show to users within a predefined area or location based on the user’s IP address.
1) Ahead of the Curve
"More Google searches take place on mobile devices than on computers in 10 countries including the US and Japan."  More people are searching on mobile than any other device. Geo Fencing is a great way to stay ahead of the curve and reach an audience your competition may be overlooking. National campaigns are already moving to this type of targeting - 58% of national brand advertising campaigns employed geo-precise targeting (including geo-fencing and geo-behavioral targeting) in Q1 2013.  Be the local advertiser ahead of the curve.
Targeting or "fencing" a specific location to advertise your message is more cost-effective and has shown to have a higher CTR (click thru rate) percentage.