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The Deadzone: Why beacons are dead

29th Jul 2016
SmartFocus
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Deadzone

Location-based marketing is a product of the mobile mind shift that has been taking place since the introduction of the iPhone in 2007. In nine short years the proliferation of smartphones to the point of ubiquity in everyday life has opened up a vast consumer group that is always on, and always transmitting their location. Whether it be through GPS, Wi-Fi, Bluetooth or any other technology that smartphones support. With the right software solution these signals can be listened to, aggregated and received as triggers to deliver context rich marketing moments for brands.

However, shrewd marketers now focus on localised personalisation in the context of real-time interactions to drive customer sales, wherever they happen to be. Many brands will have used geo-location in campaigns for a number of years, but the fastest growing trend is indoor proximity-based location marketing, where brands can not only tell where you are (for example, in the mall), but precisely what section and item you are close to (in a store, in the electronics section).

Whereas brands have been playing with this kind of technology for about four years, it is only recently that scalable hardware free solutions have come to the market. This means businesses can track customers’ movement in spaces as easily as they can track web behaviours – and for about the same kind of budget and upkeep.

In 2015 the biggest brands were investing smaller ‘innovation’ budgets in this area, by 2016 we are now seeing proximity and location-based marketing as a substantial line item on the regular digital marketing budget, especially with the larger bricks and clicks players. After all, who wouldn’t want to measure the performance of their bricks and mortar locations in the same way they analyse their web traffic?

In 2013/14 the buzzword in location-based marketing was beacons (commonly referred to as iBeacons thanks to an early Apple launch and not much more). Beacons are Bluetooth transmitting units that communicate to the mobile device. As a brand if you registered the location of your beacon, then you had a framework of micro-location for your customer. The main selling point was that the units were very low cost and battery powered.

Unfortunately - as many first-movers discovered - this meant that they often failed and therefore had a low rate of efficacy although the use cases where there. Brands wanted to know when customers were moving about their real-estate, what the hot and cool spots were and how different customers acted across channels, and the technology simply wasn’t capable of that, yet. Most brands have stepped away from this particular technology due to volume of beacons needed, their unreliability and the cost of maintenance of such an estate.

Virtual beacons

Due to the main issues of using traditional beacon technology, we now only work with virtual beacons, that have all of the benefits of micro-location technology with none of the drawbacks, plus offer more cost-efficiency.

With virtual beacons there are no maintenance costs -  and you only need a digital floorplan and the sensors that already exist in a phone. There is zero infrastructure and therefore no physical hardware to move around with this advanced system. Accuracy is vastly improved plus there are no interference issues, hence they offer a stable proximity marketing solution. Virtual indoor sensors mean proximity tools work across both iOS and Android devices.

Virtual beacons are able to track actual individual customer journeys and offer navigation in-store. This adds extra contextualisation to a proximity programme, which further enhances the customer experience and results in increased ROI for a business.

We recognise the imperative of omnichannel, contextualised communications with prospects and their customers. Programs that include location-based data consistently deliver higher response rates and ROI, since the more personalised the experience, the happier the customer.

Location-based data adds another source of crucial customer information into the marketing mix and is what empowers a machine-learning algorithm to intuit further context of the interaction.

Mobile has the power of 24/7 access to the ‘remote control’ of your customer’s life and the ability to enable location-based personalised marketing messages better than any other medium. In my mind integrating a real-time location based marketing interaction solution is the key to taking advantage of that knowledge.

The reason that it is gaining more interest is two-fold. First is the technology is now available to make the process easier for the marketer, rather than falling to an IT or operations team. Marketers can deploy location-based campaigns as quickly and as independently as they would set up a paid search campaign; perhaps even more so. Second is the increase in customer acceptance about location-based technologies used to track and measure activity. In a recent survey we discovered that 60% of people were happy to share location with a brand if they received a reward (like improved service or a discount) in return. If you looked at the younger audience, this figure increased even higher.

Companies must now go beyond meeting customers where they are and meet them when they are - delivering marketing communication that is in synch with the customer journey. In this ecosystem, personalised and contextually relevant real-time interactions based on location are no longer optional extras for marketers — they are a must-have to achieve success.

Kym Reynolds is a senior marketer at SmartFocus

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