Beacons: 10 Things Every Marketer Should Know

Tuesday, March 10, 2015
Media
Beacons: 10 Things Every Marketer Should Know

Beacons are an emerging cost-efficient way for both retailers and location-based businesses to gather information about consumers.  From welcoming people as they arrive at a sporting event to providing information about a nearby restaurant, beacons provide a value to both consumers and businesses. Beacons open a world of possibilities for location awareness and countless opportunities for interactivity with phones.

1. What are beacons?
Beacons are a low-cost piece of hardware — small enough to attach to a wall or countertop. Most beacons’ signals can reach anywhere from 100 to 160 feet. Beacons are battery-friendly and consume very little energy. They utilize Bluetooth connections to transmit messages directly to a smartphone with the aim of improving the in-store shopping experience or overall in-location experience.

The terms “iBeacon” and “beacon” are often used interchangeably. But iBeacon is a trademarked term by Apple that refers to the protocols, devices and uses of Bluetooth LE to create user experiences with Apple/iOS devices. However, Apple devices can receive signals from any type of beacon, as long as they are following Apple programming protocol.

2. How do beacons work?
Beacons are small, cheap Bluetooth transmitters. Apps installed on your iPhone listen for the signal being transmitted by beacons and respond accordingly when the phone comes into range.

3. Who makes beacons?
There are many manufacturers of beacons. In fact, even an iPhone could be programmed to act as a beacon. In many cases, beacons do a lot more than just promoting content to shoppers in a store. Beacons in stores can transmit Bluetooth LE signals, but they can also detect humidity, temperature and acceleration, and they can include modules for Wi-Fi. There are dozens of manufacturers of beacons of all types, from USB beacons to battery-powered, powerless beacons to all-weather beacons, open-source 3D printed beacons to audio-compatible beacons.

4. How much do beacons cost?Beacons range anywhere from $30 to $135.

5. What are the potential advertising uses?
Beacons can be used for active outreach to customers, as well as for collecting information on consumers. For example, if a consumer has a retailer’s app installed and walks past their beacon-friendly location, he or she could get a special-offer alert from the store. Or when visiting a big-box store, specific information on nearby sale items could be displayed, using the consumer’s distance from beacons placed near displays to work out the consumer’s position. Beacons can be a much better option for in-door mapping — which GPS struggles with.

Furthermore, it is predicted stores could even create their own in-store advertising networks. For example, a big-box store may place beacons in its beverage aisles and have Coca-Cola and Pepsi bid against one another for the exclusive right to advertise via those beacons.

Beacons can also be used as point-of-sale systems and to collect information on those consumers — particularly how consumers maneuver through stores.

6. What is the use case for your business?
If you’re not a retail location, or you are, but are not prepared to enhance a consumer’s in-store experience, there may still be a use for you and your business.

Location technologies let marketers retarget offline behaviors with online advertising. Brands such as Unilever have been working to gather data from beacons to retarget users on mass-consumer apps, based on their in-store behavior and engagements with both Unilever and similar or complementary products and brands. Furthermore, this same level of data-gathering could be leveraged to retarget visitors to your location. Gathering what is called first-party data — in this case, in-store data — via beacons can allow marketers to then take this data and retarget or market their products to those same individuals via their smartphones. We expect this practice to grow, as well as other new creative practices for leveraging the in-store and location-based experience.

7. What are the benefits to a retailer of using beacons?
As mentioned earlier, there are multiple potential benefits, including the ability to message consumers while they’re in stores and the ability to collect consumer data. The hope is that by interrupting the shoppers’ experience by pushing ads and coupons to them, it will induce them to buy. Many consumers have a tendency to “showroom,” or research pricing and product features in-store, only to later purchase at a lower cost online, on sites like Amazon.

Many marketers and research groups suggest that the data-collection element of beacons is far more valuable than engaging consumers in-store. 

8. How should consumers feel about beacons?
It is expected that consumer reaction to beacons will be mixed.  Beacons are a relatively new technology that many consumers are not yet aware of. Many consumers are averse to interruptive mobile advertising, but a common belief among marketers is that consumers are open to mobile ads as long as the ads are relevant to the consumer. Beacons allow for mobile content delivery on an incredibly targeted scale, but it’s still a fine line to walk between targeted, relevant marketing and “creepiness.” Additionally, it’s a fine line to walk between interrupting a consumer with a potentially relevant advertisement and the consumer then disengaging with your app because of receiving irrelevant ads.

But what if the ad is of interest? That’s the recipe for a successful engagement and a potential sale.

9. Can a consumer opt out or stop ads?
Yes. Consumers can opt out by changing permissions under the location services for the relevant app by switching off their Bluetooth or by uninstalling that particular app. For iOS, this can be accessed via Settings > Privacy > Location Services.

10. What other impact could beacons have on consumers?
Beacons could be a big step toward mobile payments, something that smartphone makers have been looking at for a long time without getting it right. With Apple launching its own payment gateway via Apple Pay, having beacons that integrate with iBeacon could mean the simplicity of purchasing items without even having to visit a checkout counter. iBeacon is not the only game in town — PayPal has developed its own “PayPal Beacon” technology, which allows shoppers to “check in” and pay for goods from the PayPal account on their phone. Near-field communication is another technology finding a niche in the payments world.

 

Sources:

http://www.businessinsider.com/beacons-and-ibeacons-create-a-new-market-2013-12

http://support.apple.com/en-us/HT202880

http://www.zdnet.com/article/what-is-apple-ibeacon-heres-what-you-need-to-know/

http://www.mediapost.com/publications/article/243805/beacons-open-up-prospects-for-physical-retargetin.html

Jordan Yospe

Experienced in branding and direct response marketing. Expertise includes an array of media, including: Direct Mail, TV, Print, and Outdoor, with particular expertise in Interactive/Digital Marketing (CPM, CPC, CPL, SEO & Social Media) and Radio.

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