The Benefit of Beacons Is in the Past and the Future — Not in the Present

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Screen Shot 2014-08-26 at 4.56.14 PMMost of the discussion around bluetooth beacons and other proximity messaging technologies has centered on real-time advertising. Walk into a store, and boom — it’s an ad on your phone. But the benefit of beacons extends well beyond the “here and now” scenario; the devices create new opportunities for marketers to build deeper audience segmentations and more advanced location targeting that we’ve barely begun to explore.

When GPS-enabled smartphone entered the market in the late 2000’s, marketers raved about the opportunities for proximity-driven advertising campaigns. But the industry quickly learned that real-time messaging was more effective in theory than practice. And with beacons, the benefits are equally limited and the challenges are even more acute.

Before a brand can send its first beacon-facilitated in-store ad, it must install the beacon hardware in all locations and places of interest, which is a big undertaking. What’s more, the only way to collect ongoing data about customers who are near beacons is through a native app. That means the brand’s app must be installed on a critical mass of smartphones to collect a meaningful amount of beacon-proximity data, which brings with it a whole new challenge of convincing customers to download and install that app — often while they are standing in the store.

Finally, the only way to message the user in the moment is via a push notification, SMS or email — all of which require their own individual user opt-ins. So, even if a brand is able to get beacons installed in stores and apps installed on phones, it still needs to convince a large share of those users to opt in to notifications, which is not a trivial task. And, even with all these in place, the company will only be able to message its most loyal customers, those people that feel good enough about the brand to give its app precious real estate on the most personal device they own.

Instead, the value of beacons is in the past and future — not the present. Imagine being able to segment users and advertise to them at scale based on exactly where they have gone, when and how often. Maybe you want to target users who have been in your store in the past month, or who haven’t been in your store in the past month, or who go in your store once per month every month. Or maybe you want to target that fitness enthusiast who visits the gym everyday or that auto-intender who visited several car dealerships over the last few days.

The industry has dabbled with this type of advanced location targeting in mobile media for a few years now, using users’ ongoing GPS data to build advanced audience profiles and target accordingly. Unfortunately, that method is also hard to scale, as advertising platforms can only “see” users when they have an ad-supported mobile experience launched on screen. Luckily, beacons solve this problem, as they can communicate with a smartphone (iOS 7+ & Android 4.4+) even when when the phone’s screen is off, tucked away in a pocket.

An even more interesting advertising use case than in-store alerts is using advanced beacon data to hyper-target an audience across a broad set of mobile apps and sites, times of day and contexts. Finding that fitness addict when he is watching sports highlights, or reaching a loyal customer while she is checking the news are what we should be getting excited about.

Beacons still need to be distributed across retail locations and other places of interest, but over time, this part of the equation will be less and less of an issue as brands and platforms begin to install and potentially share beacons.

When brands let go of the real-time messaging concept, it frees them from having to even use their own app to collect beacon data. Brands could partner with existing, high-penetration apps to collect that beacon data and export it for one-to-one targeting across their preferred mobile media partners.

This is the real future of beacon-fueled advertising: custom, accurate location-targeting across a wide array of mobile inventory and contexts. Everything else is just a stepping stone.

Andrew-DubatowkaAndrew Dubatowka is Director of Innovation Product Strategy & Marketing at Opera Mediaworks, where he oversees the product innovation, product strategy, sales support and new product merchandising and marketing for all departments.