A new report from Juniper Research released earlier this month forecasts that the market for Mobile Context and Location Based Services will rise from $12.2 billion in 2014 to reach $43.3 billion by 2019. The purpose of this article is to understand how beacon technology works and how it can be used by marketing professionals as another powerful tool in the digital marketing arsenal. This article is written based on research gleaned from Brainstorm’s Thought Leadership team.

What are beacons and how can they be used?

Beacon technology is a relatively new way of delivering location based services. The leading proponent has to date been Apple with its iBeacon technology, which is Apple’s own trademarked variant of the beacon standard. A beacon is a low energy Bluetooth chipset known as Bluetooth Smart which has its own integrated power source and emits a 2.4GHz signal which communicates with a smartphone to pinpoint your position to within 200 feet. The big opportunity for marketers is the ability to combine the location information derived from beacons with other customer information to generate personalised offers and communications, enhancing the customer experience and maximising marketing ROI.

Which Location Based Technology to choose?

How, you may wonder does beacon technology compare with other location based technologies that are already in existence such as GPS, GSM or NFC? Well one of the key differentiators is its precision in locating a mobile device within a relatively narrow circumference. It does require a smartphone app installed on the user’s mobile device which means that it is particularly powerful in communicating with audiences with whom you already have an existing relationship, to build loyalty over the customer lifetime rather than in one-off purchases.

So how can you choose the right location based technology for your campaign?

Start by determining the audience, proposition and required outcomes. The retail sector has been at the forefront in adopting Beacon technology, possibly because they already have an existing base of customers with installed apps and are looking to accurately track consumer activity in store and know when a customer is browsing in the vegetable section, rather than the wine section. They are then able to offer real-time personalised promotions by combining information held on their CRM system on previous buying behaviour, with their in-store location information and popping up a message with a special offer for their preferred tipple, or a new menu using in-season vegetables.

GSM on the other hand comes in two flavours: passive and active. It is less accurate than beacon technology and requires working with the mobile operator to be able to target their subscribers. The active version is available for everyone to use, and the location information is delivered via a network ping from the operator, although it requires the consumer to sign up for a service. The passive variant involves more complex engineering to integrate with the operator’s backend systems in order to obtain location events, which are automatically logged without the need for network pings, user check-ins, log-ins, or even a smartphone app.

NFC on the other hand presupposes an existing need by the customer for the service as it requires the consumer to tap the phone on a sensor. It is effective for simple transactions such as minor payments but less effective in anticipating customer needs or being able to offer a more sophisticated personalised message.

Generating maximum ROI

Nonetheless each different approach has its relative merits and needs to be evaluated in the context of the audience, the proposition, the offer and the required outcomes. Today’s marketing department takes a much longer term view of customer engagements and is keen to better understand the way in which the end customer interacts with the brand. There is no “one size fits all” solution and the complexity of the customer engagement is further increased by the variety of mobile devices that the average consumer has at their disposal, as well as the preferred channel of communication. Adding the extra dimension of location is a powerful adjunct but still requires substantial expertise to choose the appropriate technology and to know how to deploy it effectively. As always context and content are of paramount importance in using location based technology to gain maximum impact.

One other important aspect of beacon technology is the fact that they contain sensors that can read information on weather conditions or acceleration and what’s clear is that we have only touched the tip of the iceberg in terms of its potential deployments. Beacons themselves are just the enabling technology, their true power will be unlocked by developers and marketers coming up with truly innovative new ways to improve the customer experience and drive customer engagement.

 

By Donald Stuart, CEO of Brainstorm Mobile Solutions. 

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