“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Hilmi Ozguc, founder and CEO at Swirl.
Beacons, those small wireless devices used to trigger delivery of location-specific mobile content, have moved out of the lab and into the mainstream.
During the past 12 months, they’ve appeared at the Super Bowl, Tribeca Film Festival, airports and sports stadiums. Macy’s, Lord & Taylor, Walgreens and Marriott announced beacon marketing programs to connect physical and digital experiences through consumer smartphones.
As more venue owners roll out beacons and proximity marketing capabilities, the beacon marketing ecosystem will grow and extend far beyond retailers and the technology providers that power them. The industry is just beginning to scratch the surface of what lies ahead for a broad set of players, including publishers, brands and agencies.
Much of the attention on beacons has been focused on the underlying hardware and technology. More than 50 vendors have developed battery-friendly broadcasting devices that give retailers a plethora of options for Bluetooth-powered beacons. An early push from manufacturing heavyweights Qualcomm and Motorola established scalable supply chains and pushed beacon costs down to the $20 to $40 range.
With so much focus on the hardware, it’s easy to lose sight of the fact that beacons themselves are really just basic transmitters that beam location data to Bluetooth-enabled smartphones. But they can trigger the delivery of hypertargeted mobile content through a mobile app at a particular time and location. Since mobile browsers cannot recognize beacon signals, mobile apps are a necessary component of any beacon marketing program.
Many early beacon marketing programs were launched as “walled gardens,” where venue owners delivered content or offers via their own branded mobile apps. While great for engaging with brand loyalists, this limits the overall business impact since most retailers’ app audiences are just a small fraction of the total in-store traffic and many shoppers are loathe to download yet another retailer-specific mobile app.
To reach much larger audiences of beacon-enabled shoppers, retailers are beginning to work with publishers with beacon-sensing capabilities in their mobile apps. Early pioneers in this space include Condé Nast and SnipSnap, but that’s just the beginning. A number of the largest third-party mobile apps, including Facebook, are already adding beacon-sensing capabilities to tap into new user engagement and monetization opportunities. Many more will follow in the coming months.
Brands: Bringing The Budgets
As the footprint of deployed beacons in retail expands and a scaled audience of beacon-enabled apps is established, major brand advertisers will enter the beacon marketing ecosystem in a big way. Retailers will invite their most important brand partners to participate in their in-store mobile marketing programs. These brand partners will be expected to contribute relevant and engaging content that enhances the shopping experience.
By controlling access to beacons and the audiences that can be reached with beacon-triggered messages in their stores, retailers will become the hub of a burgeoning proximity-based marketing ecosystem. For brands, being featured in this marketing channel offers opportunities to deliver highly engaging mobile experiences at the precise locations where their products are sold. With them they’ll bring shopper marketing budgets and resources to develop compelling content.
Agencies And Service Providers: Bringing The Manpower And Expertise
As the beacon marketing ecosystem grows, it will likely open new doors for agencies and service providers. As brands and retailers tread further into beacon marketing, digital and mobile marketing agencies will undoubtedly devote resources and develop new capabilities to help them create, manage and optimize in-store mobile marketing campaigns.
Media agencies will have no choice but to become adept at navigating the opportunities presented by retailers that open up their beacon networks to brand partners with private in-store ad exchanges. System integrators will be asked by their clients to create omnichannel customer profiles, merging online customer profiles with in-store behavioral data. The emergence of these enhanced customer profiles will pave the way for even more advanced offerings in the data analytics and digital marketing spaces.