Beacons started out as a solution in search of a problem. And now some beacon providers are companies in search of a home.
On Monday, mobile ad platform The Mobile Majority acquired geolocation beacon company Gimbal, a spinoff of Qualcomm.
In June, location data company Verve Mobile bought beacon provider Roximity almost exactly one year after Verve’s acquisition of beacon startup Fosbury.
Gimbal, which collects consumer location data and runs and analyzes proximity and location-based campaigns, has an SDK footprint of 160 million and around 100,000 active beacons in its network. The Mobile Majority declined to share the deal price.
“It makes sense for people to start buying up beacon companies, especially if they do analytics and we’re not just talking about their hardware,” said Andre Kindness, a principal analyst at Forrester. “Like all technology, it’s probably going to be the 80/20 rule – 80% will get acquired and 20% will just go out of business.”
There are more than 500 proximity and beacon companies, each with their own network of hardware deployments.
Consolidation in the fragmented beacon space could ramp up as the original use case around in-the-moment messaging, which arguably never left the experimentation stage with retailers and brands, withers on the vine.
Others companies are taking a more opportunistic approach to beacon fragmentation. Norwegian startup Unacast is capitalizing on the sprawling beacon landscape as an aggregator of beacon and sensor data across beacon and sensor companies.
But that data isn’t being used to target people when they’re strolling past a Starbucks.
“That’s not the reality,” said Unacast CRO Chris Cunningham. “This data is being bought and sold as a look-back, a way of rolling up and aggregating audience for retargeting or validating deterministically that someone walked into a store.”
Regardless, beacon companies have an inherent scale issue.
“Anytime you have to install hardware, getting to scale becomes infinitely more difficult,” said David Shim, CEO and founder of Placed.
But even if the scale is there on the hardware side, there’s no guarantee the audience will be.
“The consumer needs Bluetooth enabled or location services on, they need the app of the retail store installed on their phone, they need to give that app permission and they need the app turned on so they can see the message,” said Rob Emrich, CEO and founder of The Mobile Majority. “Every one of those steps limits the amount of users that meet those conditions.”
There’s also no guarantee an audience will care even if they are in a position to see the message.
“I’m a big retailer, I put an SDK in my app and a bunch of beacons in my store and then I send notifications to people who are already in the store to buy underwear on the 13th floor – that’s just super-spammy,” said Neil Sweeney, CEO and founder of beacon network Freckle IoT. “I never understood why people were so hot and horny about this idea. It’s just sort of … stupid.”
The value of beacons is around online-to-offline attribution, not push, Sweeney said.
“Pushing notifications was the first-generation model,” he said. “But being able to tell a brand that these or those people were seen in their various stores – that will impact where the brand allocates its marketing dollars.”
Attribution and data are also what attracted The Mobile Majority to Gimbal, Emrich said, not the hardware part of the business or “being able to target someone with a mayo ad when they’re walking past the mayo aisle.”
“We care about expanding the SDK footprint,” he said. “We care about identity and we care about always-on background location data as a signal of intent. You could argue that location is a far better signal of intent than what content someone has consumed.”
A beacon is nothing more than a dumb signal, a radar blip. But when a phone has an app with a particular SDK installed and location services enabled, it captures an IDFA which allows a store, stadium or other location to see that an individual came inside, dwelled or returned.
Combine that with media exposure and point-of-sale data, and you’ve got something, said Mark Marinacci, VP of audience development at beacon tech provider Swirl.
“If you know who came into a store and you understand certain of their behaviors, that can be used to validate a media investment or optimize media partners,” Marinacci said. “And if you think about a trip to a store as the most high-fidelity signal of intent, you should capture that information just like Google’s been capturing search intent for the last 15 years as a way of deepening your understanding of your customers.”
That’s why Verve bought Roximity in June, said former Verve CEO Nada Stirratt.
“The promise of beacons as a data signal is very real, to have a better understanding of people in a store and paint richer portraits of behavior,” Stirratt said. “But pushing someone to an end display in the cereal aisle? That’s just not it.”
