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As Beacons Reach Two-Year Mark, Industry Needs To Tackle Inaccuracy, Publisher Acceptance

Meanwhile, Unacast PROX network adds two dozen partners to expand beacon retargeting.

Beacons have come a long way since emerging in the fall of 2013, but the wider problems associated with establishing consumers’ precise geo-data and the uncertain involvement of publishers suggests the work platform companies have as they look to 2016, the Mobile Marketing Association’s state of in-store beacon tech report finds.

One of the most promising areas the MMA’s report, Understanding the Beacon Proximity Landscape, is the use of retargeting programs to serve ads to consumers’ desktop and mobile devices after they have checked into a brick-and-mortar location. Unacast is one of several proximity platform players looking to broaden Bluetooth devices’ in-store connections to marketers’ retargeting efforts and has added a 25 prominent beacon providers to its PROX network.

Among the companies that have just signed on to the PROX network include: Estimote, Sensoro, Urban Airship, Signal360, Mowingo, Tamoco,Total Communicator Solutions, Bluesense Networks, ZOS Communication, Pointr, BeaconsInSpace, Dot3, Sweetspot, FreshBeacons, Ebizu, ShopJoy, Fluxloop, Emplate, Nimble Devices, Abriho, SmartFission, Oyalo, GEOConnect, Beekn4U, BubbleMe, and Mobstac. (Read the release.)

The addition of these companies now gives the PROX network access to more than 1 million beacons globally. On average, Unacast has signed up roughly 10 proximity services provides a month, and is thus ahead of its target to sign 100 company partners by 2016.

“The ability to connect what customers do offline in the real world to what they do online — combining their physical and digital selves — means greater convenience, faster shopping, immersive experiences, more relevant communications tailored products and offers,” a Unacast rep says of the company’s expanding alliance. “Customers increasingly expect real time customized services and personalized interactions based on their interests through their smartphones, but the logical progression to convergence between physical and digital hasn’t been possible at scale until now.”

Scaling Beacons

The issue of scale is one that the MMA zeroes in on as one of the issues that could slow the gains beacons have made over the past 24 months.

“Both retailers and brands do not have enough app scale on their own to reach shoppers effectively with beacons,” the MMA’s report says. “They need 3rd-party app publishers involved, bringing large, relevant audiences to the table based on the value that they present.

“So what’s in it for the publishers? Proximity enables publishers to significantly boost their app retention and usage rates, thanks to simply reminding people to use them at the right time,” the MMA’s report continues. “Additionally, retailers and brands are willing to pay for access to the right audiences. However, a couple of challenges need to be overcome.”

Inaccuracy Issues

Chief among those challenges is the problem of location inaccuracy. Although beacons are an indoor marketing tool, without a broader range of outdoor geofencing as part of the chain that starts with a mobile ad to get someone into a store, getting publishers/developers involved is difficult.

After all, if a mobile app serves an ad to someone who incorrectly appears to be near a store, that impression is wasted. As a result, advertisers tend to hold back marketing dollars because they’re not confident about publishers and platforms being able to accurately target a desired consumer. So getting the outside data is imperative for advertisers to expand their indoor beacon-based budgets.

“A 2015 study from Thinknear showed that 63 percent of programmatic location data is inaccurate,” the MMA notes. “And for the 37 percent that is accurate, it is only to within 100 meters — or about the size of a city block.”

To put that in context, that’s the difference between the shopper in the grocery store and the shopper in the dry cleaner next door. “In other words, it’s a risk factor for publishers who are trying to reach people accurately. And the consequences are severe,” the MMA says. “However, accurate micro-location data signals are now available through beacon technology which can be effectives from 50 meters down to centimeters.”

Still, the benefits at this relatively early date related to beacons are clear, the MMA’s report is quick to attest. As we reported this week, retailers’ use of beacons and proximity marketing initiatives are expected to account for $7.5 billion in U.S. Millennial spending this holiday season, according to data from location targeting platform inMarket.

Conde Nast's Epicurious app is a natural platform for CPG brands and retailers.
Conde Nast’s Epicurious app is a natural platform for CPG brands and retailers.

But aside from the clear revenue proposition from mobile, continued to consumer engagement is another certain benefit for those companies selling ads to marketers and agencies.

“Beacon proximity engagements have shown to create a 16.4x increase in app usage within the store, and 6.4x increase in app retention over the next 30 days,” the MMA reports. “In other words, app publishers are actually leaving active users on the table by not delivering proximity-based engagements. Theoretically, it’s simple: By reminding folks to use an app with relevant information at the appropriate time, they use it more often and become more loyal.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.