Beacon Companies Pivot Toward Attribution As Acquirers Come A-Knocking

beaconsBeacons 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.”


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3 Comments

  1. While the shopper behavioral data generated from in-store location signals such as beacons is incredibly valuable for marketers, the ability to trigger highly contextual and personalized in-store mobile experiences is still a highly prized capability. Winning retailers will use mobile presence technology to enable much more valuable content, services and shopping experiences rather than simply using it to deliver uninspiring mobile product ads at store shelves. Powered by the massive reach enabled by Google Nearby notifications, and the location signal networks that have been deployed by some of the nation's largest retailers, we will likely see a number of innovative in-store mobile programs introduced in the coming year. This next wave of beacon-powered experiences will illustrate just how transformational this technology really is.

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  2. I agree with Rob that there is value in the ability to trigger contextual and personalized mobile experiences. While seemingly arbitrary pop-ups in a store might feel "spammy," at PlaceCodes, we have seen success offering relevant "pairings" between SMBs. For example, offers to "tap and have wine delivered" when entering a BYOB restaurant, or "tap for the perfect coffee pairing for your chocolate," have been greeted positively by consumers in our pilots with downtowns and chambers of commerce that are interested in using beacons and location-based technology to support their businesses.

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  3. @Rob Murphy, thanks for the thoughtful comment.

    I agree with you that trigger based campaigns deliver value. That was a core part of our acquisition thesis of Gimbal, and I don't think that anyone would dispute that premise.

    To me the most relevant part of your comment though is that it is made in the future tense: "retailers will use” and "we will likely see”. I agree with both of those statements, but the problem is that retailers and publishers need scale NOW, not just in the future. How many years have pure-play beacon companies been saying “this WILL be the year of the beacon”?

    The reality right NOW, is that all the current beacon solutions lack the 1 to 1 scale to have a critical mass of data, mobile message inventory, or even users. Too many conditional variables exist today for a pure-play beacon company to deliver against its potential at scale. Without a doubt, as more and more consumers have Bluetooth/GPS enabled, AND have the retailer app on the device, AND have messages enabled, the retail experience will change. I think that will be a positive development for both retailers and consumers.

    With the Gimbal acquisition, we have 1 to 1 data (both location and identity) mobile message inventory and users at scale NOW. With those, our ad delivery tools can deliver a contextual and relevant experience on a 1 to 1 basis at scale NOW. As the consumer retail experience continues to evolve, and the mobile device settings evolve along with it immediacy at scale will become a larger part of every campaign we do. That will be the case for us and other companies in the space. The bottleneck is not what we want to happen in the future, but the conditions present now.

    If a solution delivers results (as pure-play beacon providers do) but lacks the necessary scale to move the needle for a retailer, then what's the point? Personally, I believe that is why many pure-play beacon companies failed to deliver on the hype. It's a great idea, and it works in small test buys, but can’t be scaled given the current constraints.

    In the meantime, we aren’t standing by idle, waiting for a future state of retail and device readiness. For that reason, we give retailers other messaging options that just immediacy.

    Whether or not you agree I'm thrilled to have another thoughtful voice in the dicussion 🙂

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