As beacons and proximity technology have exploded onto the scene in the past couple of years, dozens of companies have popped up with hardware or tech solutions to try and grab a share of the growing pie. Unacast, which was founded a year ago, aims to partner with the companies deploying beacons and stitch together their data so that advertisers can potentially get a comprehensive view of how consumers pass through the funnel toward purchase.
Today the company is announcing that it has raised $5 million in series A funding, led by Open Ocean Capital and Investinor. The company says it will use the funding to develop more partnerships to build out its network of proximity companies so that it can use the aggregate data to “index the physical world.”
Co-founder and CEO Thomas Walle will be among the featured speakers at Street Fight Summit West on June 7th in San Francisco. We caught up with him recently to talk about how his previous company, Tidal, informed his thinking around beacons — and why the early applications for beacon technology might not be representative of where the industry will eventually go.
Your previous company, Tidal, is the music-sharing service now owned by Jay-Z. Tell me a little about how you got from the music business into beacons.
My Unacast co-founder Kjartan and I were part of the founding team at Tidal, and built up that service for five years before Jay-Z acquired it. And at Tidal I was responsible for revenue — and I wanted to know more about where people were going to concerts. We knew everything about what they were listening to — all the guilty pleasures, Justin Bieber, et cetera — but I wanted to know that if you went to a Beyonce show on a Sunday, then the next time you logged onto the music streaming service the page should be covered with Beyonce — to create a very tailored view.
I tried to go out and find that data but I couldn’t get anything accurate enough. So we said “what if we use beacons?”
So that was the genesis of Unacast?
Well, we thought “if we can pull up data from beacons, and can link up the companies out there with beacons now, it could be very valuable information.” Rather than deploy beacons ourselves, we wanted to find a way to be the back-end for all of these companies and aggregate that data from them, and, in a sense, create a physical-world pixel.
So where are you these days with Unacast and where is this new round of financing going to take you?
We launched Unacast/Proxbook 12 months ago, and in that time we’ve built up a huge network of proximity companies — 52 in total now. The market has grown very quickly, so even though we have some cash in the bank we saw that the only way that for us could really deliver value to brands and retailers that want to use data from proximity for retargeting and attribution — we needed to be that #1 network. And I think that ties back to the music space, because if you don’t have all the music then your service is less valuable. By the same token, if you don’t have all that proximity data available then you are missing out on the end-user’s journey across all of these physical locations. So the money will be spent very much on growing and supporting our existing network of proximity companies.
The second part is then focusing on how the data is collected and structured. One of the problems that we’ve had is that all these 300 companies [in our network] all collect data in different ways. That doesn’t work from a demand side. So we have started a process over the past six months — and this is what a lot of the money will be used on — to help proximity companies tag and structure and harmonize their data, so that this very unstructured and fragmented data can be used for online retargeting.
One thing that ends to happen with new technologies — and I think this is especially true in local — is that everyone tries to immediately find a retail application for it where it could be very easily monetizable. Do you think beacons’ main use case is the main one that we’ve been hearing about for the past couple of years — guiding people through stores and that kind of thing? Or are there next-generation ways that beacons will be used that are less related to that?
Absolutely. We’re seeing especially the last two quarters. When beacons were first introduced it was all about “sending the right message to the right consumer at the right time.” Then people started to use beacons for analytics. Now retailers and brands are starting to use beacons to collect data and do online retargeting. And to be frank I think we have just seen the tip of the iceberg. Beacon technology is so powerful because you can find out more and more about what consumers do in the real world.
And so I think this what happens with new technologies — new tech fosters new tech. The online industry is very much penetrated in terms of what data can be collected and what can be done. This is completely untouched territory in the offline space, by comparison. We’re really bullish on the different kinds of proximity technologies that our partners are deploying, and I think retargeting definitely won’t be the end.
What are some beacon use cases that you’re finding the most interesting these days?
The use cases that we find interesting and the ones we know that consumers are really enjoying are where it creates a more seamless experience. Airlines are starting to use beacons at the gates — so instead of fiddling around with boarding passes, now it just pops up on your phone. And just having that kind of experience, where it pops up on your phone as soon as you are near the gate, that’s very helpful.
The cases with hotels are also really interesting like that. When you enter a hotel, why should you have to stand in a line at the front and get checked in? It doesn’t make sense when you’ve ordered the room online and have paid for it online. So some hotels now, the second that you enter their lobby, they detect, boom, you’re there — and a screen pops up to help you find your room, and then you can use your phone instead of a key to open the door.
So brands are moving beyond the whole coupon/discount thing, even though it’s still an important part of the whole proximity proposition. They’re becoming more creative.
David Hirschman is a co-founder of Street Fight.
Hear more from Unacast’s Thomas Walle at Street Fight Summit West on June 7th in San Francisco. Click on the icon below for tickets!