4 intuitive rules when approaching beacon technology

There isn't a conversation between a marketer, agency, or retailer that doesn't include the word "beacon" in it. Beacon providers are trying to map out business use cases to push adoption, retailers are creating their "beacon strategies," and agencies are tasked with figuring out how to use them.

There's no doubt beacon technology and proximity marketing will have a dramatic impact on advertising and retail. However, we're very early in the game. The required infrastructure must be in place, and consumer expectations aligned, before proximity marketing goes mainstream.

Here are some practical tips for how to approach and test beacon technology right now -- so you are ready when proximity marketing begins to scale.

What's all the fuss about?

To set the stage, let's do a quick "beacons for dummies." Beacons are not new. A beacon is simply a transmitter of signals, often used in navigation. However, for our purpose they can be placed in locations where marketers might want to communicate with consumers -- for example, in the entry point of a store or on a city street with high foot traffic. They are available from several manufacturers for about $10 per unit and easy enough to install.

The beacon hardware is only half the equation. You need a receiver to actually use those signals in a meaningful way. Today's beacons transmit Bluetooth low energy (BLE) signals. So it is only when a smartphone is actively Bluetooth enabled (location is turned on) and there is an app installed that is listening for that BLE signal that any type of interaction begins. And more importantly, that's when there is real value for marketers.

According to Forrester, about 30 percent of smartphones are enabled to connect to beacons using BLE today. That number is expected to grow to 80 percent in the next 15 months. So now you understand why we're early in the adoption cycle, yet there is a real urgency to be the first to figure this out.

Let's get practical

While there is great potential for beacons, there are immediate (and quite challenging) issues to be resolved. Ask yourself this question -- what is valuable enough to you as a consumer that you would not only keep your smartphone location turned on at all times, but you would also happily download and install (with certain permissions) at least one app that listens for BLE signals?

My company ShopAdvisor recently conducted a survey using female shoppers to answer this very question. We asked them to respond to a series of scenarios to determine which would get them to "cooperate" in the context of proximity marketing -- turn location on their smartphone and download a specific app. Their answers were consistent. The value received in exchange for action had to be personally and contextually relevant. The deal had to be for something they intended to shop for, or for a nearby store they liked to shop in. They were not about to change their shopping desires or preferences. Simply providing a discount for a nearby store -- or even the one they were walking into -- was not perceived as enough value in exchange for the required actions.

To sum it up in the words of one respondent: "Allow me to find items that I love, with a price point I also love."

Taking this information into consideration, here are four intuitive rules for approaching the use of beacons for a proximity marketing pilot the right way.

Think like an experiential marketer

These marketers have a different view of what context is. While most of us think about context as related to content, for proximity marketing the context has to be a combination of location and moment in time.

Remove all friction

That means mobile-first design. Remember that smartphones are great for a quick scan -- swipe or text -- but frustrating when typing many characters or numbers (e.g., an address and credit card number).

Make it about their intent

Find a way to start capturing what your audience wants now. According to a recent L2 Digital Report, 67 percent of department store apps feature a registry. That seems to me to be a treasure trove of intent data.

Design the right experience

Remember that you are bringing virtual and physical worlds together. In the physical world, phones are used as a communication device and as a way to gain on-the-spot information. In the virtual world, consumers have been trained to look for information from a QR code scan and relate "check-in" to receiving an incentive or reward. Use this natural and learned behavior to your advantage.

Three beacon-ready programs available today

Now that you understand how to approach this, the challenge is not how to secure or install the hardware -- it is the back-end infrastructure required to translate beacon signals into meaningful customer interactions. The following are three resources for launching a proximity marketing or advertising attribution test:

  • Gimbal (spinoff of Qualcomm) is already partnering with sports venues, retailers, and even event organizers to use its existing platform of context aware proximity beacons.
  • If you advertise with one of the major publishers (e.g., Hearst Corp., Time Inc., Conde Nast) you know that most now offer some form of enhancement to "commerce enable" your ads. These same publishers are now teaming up with beacon solution providers and retailers to pilot tests in which readers can be anonymously tracked from ad to in-store.
  • Titan already offers Bluetooth for some of the out-of-home advertising inventory it sells and has worked with Gimbal to provide beacon proximity services at this year's Tribeca Film Festival. Attendees were encouraged to download an event app that worked with Gimbal beacons, offering attendees a variety of options to supplement their experience based on their location.

In closing, rest assured you are not late to the party. We're just getting started. But if Forrester is right in its predictions, anything you can do today to pilot a proximity marketing program using beacons will put you way ahead of your competition when these programs are ready to scale. And that looks to be in the not-so-distant future.

Karen Macumber is CMO at ShopAdvisor.

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