Contributed by Jonathan Mellinger, VP of Enterprise Partnerships at Goodway Group

Getting started with “Proximity Marketing”

There has been a lot of buzz about beacons in the last year. You may have even read an article or two on high-profile companies like Lord & Taylor or McDonald’s testing beacons in their stores. First, it should be noted that proximity marketing is a very new industry segment. In baseball terms, the second batter is up in the first inning of a nine inning game—it’s a very nascent business. But startups in this space have already begun to differentiate their products, platforms, and business models, so much so that it presents a challenge for marketers to choose which vendor works best. The goal of this blog post is to help you better understand this new marketing-technology niche.

What are beacons?

Beacons are small devices that emit a Bluetooth Low Energy (BLE) signal. When a Bluetooth-enabled mobile device passes within range of the beacon’s signal, it communicates with beacon-enabled mobile apps, determines the mobile device’s proximity and Device ID, and sends personalized notifications and content to a customer’s smartphone.

How do beacons work?

Beacons rely on first- and third-party mobile apps to detect their signal, which then triggers a notification on a customer’s smartphone. Retailers with their own apps can install a beacon vendor’s SDK—basically a few lines of code—in their apps that allows the beacons in the store to talk to the app. Other beacon vendors partner with mobile apps who install their SDK. This allows marketers without their own apps to also communicate with potential customers.

Are Beacons Right for my Business?

Beacons are ideal for retailers and large venues. For the purpose of this post, I’m focusing on retailers because of the myriad of marketing applications. Brick-and-mortar retailers are best positioned to take advantage of beacons and proximity marketing for several reasons:

Foot traffic—It’s much easier to develop an audience for targeting or a sample size for measurement when 1,000 customers come through your store doors each day. Beacons also can collect business intelligence.

Mobile apps—Beacon vendors have their own software development kit (SDK)—remember, essentially a few lines of code—that retailers can install in their own app, allowing it to communicate with beacons placed around their stores.

Customer engagement—Beacons provide marketers a new tool to communicate with their customers. For example, if a national paint retailer has its own mobile app and beacons deployed at its stores and wants to promote a launch of a new line of home paint, when a browsing customer enters the range of the beacon, he or she can receive a notification about the new line of paint and see a “design idea” photo gallery—all from within the retailer’s mobile app. This is just one example of how retailers can creatively enhance engagement with their customers.

Attribution—Beacons provide one more touch point in the customer journey and will allow us to more accurately measure lift in store traffic from online campaigns.

Proximity-marketing beacons spent the last couple years as “bleeding edge” technology. As many retailers have tested them and beacon companies have improved their product and platform offerings, they now have graduated to “cutting edge.” In subsequent posts, I’ll explain the differences between vendors and provide more sophisticated examples of beacon-marketing programs.

 

Jonathan Mellinger

 


As one of the founders of EyeWonder, Jonathan has experienced firsthand the evolution of digital advertising from the nineties to the present day. In his Goodway role, he manages partner and vendor relationships, which affords him a birds-eye view of the digital media industry’s emerging technology and trends.