Late last year, ad tech firm Juice Mobile spun off a separate company focused exclusively on beacons, and the internet of things. The idea was to create a large enough network of beacons to allow large brands to use their data to inform and measure mobile advertising in an accurate and scalable way.
We caught up recently with Neil Sweeney, chief executive of both Juice Mobile and the spin off, Freckle IOT, to talk about how wearables will impact the mobile ad industry and why beacons will finally make mobile location data “honest.”
In an interview earlier this year, you argued that mobile is going advertising is a medium that’s going to be driven by activation.” Can you expand on what you mean, and how that fits into the rise of a more distributed internet of connected devices?
It’s important whenever we talk about next generation connected devices — which includes everything from wearables to beacons — it all has to start with the core DNA being in mobile. If you don’t understand the nuances of mobile, your ability to be successful in next generation devices is going to be really, really difficult. In understanding mobile, you’re also able to see the trend of mobile and where things are going with mobile and what is actually going to take place.
The whole rationale about starting Freckle in the first place was the understanding that mobile is fundamentally changing, and what’s happening is mobile originally embraced a lot of the standardized formats its predecessor had. Embracing something like the 320-by-50 banner in mobile was OK for the short term, but when we look at where things are going, whether that’s through watch or glass or wearable or any of these various things, the one thing I’m pretty clear about is that a lot of those traditional formats which the entire mobile industry is based upon will not migrate. There is no room for a 320-by-50 on the Apple Watch.
How do you think mobile will need to change from an advertising perspective in order to adjust to these new connected devices.
Mobile today is about pull messages from your phone. But if the mobile device becomes a computer that sits in your purse to power things around you. well then it’s not about you opening an application, consuming content via a vertical feed and seeing a 320-by-50. Instead, it’s about how that phone interacts with the wearable that’s on your body and how that wearable interacts with the various things around you. That’s where the premise comes from, of moving to a world of activation.
The emergence of some of the new devices and technology will change the way marketers actually use them. The future, in my mind, is going to be about sending contextually relevant information to people based on their proximity. The question then becomes how are we going to do that, through what devices? What are going to be the operating systems that power that. What are the tactics that are going to make that effective?
The Apple Watch is finally out, and reviews are mixed. When you think about potential advertising on a watch” what’s different and what’s the same in terms of the way we think about advertising on mobile devices. Do you see the smartphone as closer to the desktop computer or the watch and wearables in terms of advertising strategy?
The Apple Watch is great, but the question is still about the way in which that connects with everything else that’s going on around you. The power of Apple is not the actually the products itself but rather the ecosystem of products to which it connects. If it was the watch itself, the Moto watch to me in many ways looks even better, but it doesn’t have the same kind of seamless ecosystem that Apple offers. When I look at wearables that’s why I think the watch represents an inflection point. It’s less about the utility of the device itself, but more about the interconnectivity of the device.
When you look at how people are actually advertising to mobile devices today, they’re doing that through a lot of standardized formats. Those standardized formats don’t exist on Watch. So the ability to actually move that model over isn’t there.
Do you think the lack of standardization is an opportunity or threat to the wearables ecosystem?
I think you could argue that mobile should never have embraced the 320-by-50 banner in the first place, but they did it because online did it. I would also argue that online should never have embraced the CPM, but they did that too.
The fact that the real estate of the watch is so fundamentally different than both desktop and mobile means that you are not in a situation where you can port standards from one to another. But because you can’t do that, it’s going to create this completely new way of thinking about mobile. It’s going to be the first time marketers will ever really start marketing to people on a mobile device the way they should be.
What does this mean for the way the advertising business will develop on Apple Watch and other variables?
Platforms change, technology changes, but when you look at building businesses you have to focus on the components of the business that are not going to change. This is going to be a really interesting time for big brands because you can throw away every platform that exists today and just have nothing but next generation devices, but those brands and those agencies are still going to have to market to those, but this is the first time they are really going to have to think what they are doing here and how they are actually going to market their product and do that effectively and move the needle in regard to selling more product.
Beacons have grown in popularity but it’s still unclear whether they will represent a hint of a future that may come or the future itself. Do you see beacons as the lasting technology solution or simply as an indicator of something else?
Of course it’s an indicator of something else: It represents progress, it represents a kind of iteration. What’s interesting about Beacons is there’s generally a belief that everyone is embracing beacons, but I’m not convinced everyone is embracing beacons the way they should be embracing beacons. Beacons are great because they have components other forms don’t offer. There’s a unique data set, a unique activation option and a unique location component all associated to beacons.
What I get feisty about is people throw around the notion of working with beacons without really having a strong understanding of mobile. Beacons are an extension of mobile. If you understand mobile, you evolve from there to understand the nuances of beacons and now you have a very strong foundation from which you can start to understand wearables. If you just start at beacons and go right to wearables, you don’t have the core basics and understanding of mobile you’ll fail and if you just jump to wearables without doing these other pieces you are also going to fail.
How should brands think about beacons with respect to their ongoing mobile initiatives?
Beacons have a ton of value when used in conjunction with the rest of your mobile campaign. It’s when beacons are used in conjunction with a much larger location campaign and where you are actually using data to influence other tactics, that they truly work. They have to be used in conjunction with a much larger strategy for mobile. Just doing beacons in isolation doesn’t really work.
Beacons represent a very easy point for marketers to transition to. I think once they get their head wrapped around the ability to actually move up to wearables is an actual revolution. Remember, beacons talk to SDKs which sit inside applications. Beacons are push-based while when you migrate to a wearable, what does a wearable contain? it contains an SDK and push messaging.
How will the growth of these beacon networks impact the existing ecosystem of location-based advertising on mobile, which is predominantly based on lat/long and wifi-based positioning data?
There’s a dirty secret in mobile that not one wants to talk about. That is that 30 to 40 percent of the location you’re getting in a bid request is inaccurate. With mobile, unlike desktop, location is very much kind of the cookie. So if you are not getting the location, than your ability to build any sort of interesting option from a marketing campaign is virtually zip. The problem with that is if you’re not actually being smart about your location, 40 percent or 50 percent of your campaign is actually inaccurate.
Beacons are going to turn location on its end, to be honest. When you look at the big mobile companies out there today they are all killing themselves talking about their algorithm, attribution and mapping etc, but nobody is really offering a unique location set the other company doesn’t have. They are all basically using similar tactics to get to the same result. I think beacons represent a completely different opportunity in that space. That’s one we are really focused on.
Liz Taurasi is a contributor to Street Fight.