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How The Orlando Magic Generated $1 Million In Ticket Sales With Beacons

Proximity technology helped boost the NBA team's app adoption by 30 percent plus a 233 percent jump in Fast Break Pass sales from last season, according to Unacast's Q2 Proxbook report.

Retail may still be the biggest category when it comes to using proximity marketing tools, but as Unacast’s Q2 Proxbook report (registration required) suggests, sports venues and teams may be realizing the biggest boost.

Sports franchises that have aligned their branded mobile apps with beacons and other sensors installed at their stadiums and arenas are generating a return on investment as high as 40x. That ROI is mostly in the form of driving incremental merchant sales within the first year, according to the report.

Although running merchandise and ticket sales for a major sports team is fairly unique, the use of indoor proximity signals has wide applications across marketing verticals.

“The Orlando case is a perfect example of a well-executed campaign that can be translated to all sorts of verticals, especially to retail,” Unacast Founder/CEO Thomas Walle told GeoMarketing. “Beacons and proximity are not solely responsible for the immense success of the team’s physical marketing strategy. It’s how well the team managed to integrate every piece of data into one singular system. Through proximity technologies they were able to leverage that data and turn the fan experience into something that was extraordinary.”

Proximity Touchdown/Basket/Home Run/Goals

The Orlando Magic is claiming a positive revenue rebound thanks to the use of beacons.

Alongside fellow NBA teams such as the Cleveland Cavaliers, Golden State Warriors, and the Milwaukee Bucks, The Magic says beacons have opened up an entirely new revenue streams beyond merchandise and ticket sales by connecting fans to sponsored content. Not only have paid placements provided an additional revenue assist, but it’s also promoted greater app engagement with teams’ respective fans.

For example, Proxbook notes that 47 percent of NFL stadiums, 93 percent of MLB stadiums, 53 percent of NBA stadiums, and 47 percent of NHL stadiums have already started to employ proximity technology as part of their overall marketing efforts.

And here’s why: higher engagement only reinforces the drive toward higher ticket sales and merchandise purchases at places such as The Magic’s home at the Amway Center.

The Magic’s Ticket Rebound

The Orlando Magic drove over $1 million in increased ticket sales, 30 percent app adoption (compared to industry standard of 5 percent), and a 233 percent increase in Fast Break Pass sales from last season, Proxbook points out. More than 80 percent of season ticket holders have accessed and used the app.

“We attribute the use of proximity technologies to our dramatic increase in fan engagement, ticket sales and season ticket holder renewal rates,” said Orlando Magic CEO Alex Martins, in a statement. “The biggest complaints in our business centered around the long lines at the concessions and the fact that you had to miss a good portion of games because you were in that line. Now, we were able to eliminate that problem and look forward to utilizing the enormous amount of data to provide the best possible fan experience in our venue for our customers.”

The team worked with app developer VenueNext on content management and with Canopy and Wisdom,  a data and analytics platform. The two systems combined to help the Magic realize “a comprehensive view of their venue systems over the course of an event, and insights into guests’  behaviors so you can adapt and make changes in real-time.”

Ultimately, The Magic also saw $500,000 from in-app sponsorship revenue. To date, more than 80 percent of season ticket holders have accessed and used the app.

Unsold tickets for pro sports games added up to $184 million in lost revenue for the NBA, NHL and NFL combined in 2015. For the MLB alone, the loss was even more pronounced, with $955 million practically evaporating from empty seats in 2015.

“Proximity technologies and beacons in particular are not only helping to sell more tickets, they are redefining how sports teams communicate with fans, increasing revenue from merchant sales as well as seat upgrades,” Walle said. “Proximity technology also opens up brand new revenue streams by enabling sponsors to interact with fans and monetize hyper-accurate visitor segments through advertising. We also expect that a number of NBA teams will be leveraging retargeting as an additional solution in the 2016-2017 season.”

Beacon Forecast: Retail’s Reign Remains

When it comes to using beacons and other indoor sensors for marketing purposes, retail remains the leader among other business verticals.

“Retail is the biggest and shall remain the biggest for a while – the 50 top retailers control 195,000-plus locations alone,” Walle notes. “We also see Airports and Cafe/Restaurants growing quickly.”

The proximity industry is still in an early phase in terms of the amount of sensors deployed globally, Walle adds.

Proxbook’s industry forecast is 400 million beacons by 2020 with 6 million deployments as of Q2.

“Every new technology takes time to implement and using only beacons for push communication is not enough,” Walle says. “It needs to be aligned with an overarching marketing strategy.”

Among the topline findings in Proxbook’s Q2 report, which is based on information of 330 proximity providers:

  • The amount of proximity sensors sees a large uptake in Q2 with an increase of 2,072,500 proximity sensors.
  • There are now 8,273,500 proximity sensors deployed globally registered by Proxbook members as of Q2 2016.
  • 6,061,500 of these sensors are beacons. 2,099,000 are NFC sensors and 113,000 wifi points. Since Q1 2016, there has been an impressive 33 percent increase in global sensors
  • The 6,061,500 beacons deployed by members of Proxbook, are aligned with ABI Research’s forecast of 8 million beacons by the end of 2016.
  • While Apple may have ignited the beacon craze with the introduction of iBeacon for iOS 7 three years ago, Google is becoming the accelerant: Eddystone adoption continues to grow as half of the proximity industry supports the newest beacon format from Google up from 45 percent since Q1, 2016; Apple is yet to answer, says Proxbook.

The use cases for beacons are evolving just as quickly as the adoption and deployments of the Bluetooth-powered devices are.When the first Proxbook Report was published a year ago, many companies were mainly focused only on push communication, Walle points out.

“Now, we see that companies are starting to understand the value of proximity data and how it can be used for rich analytics, online retargeting and data monetization,” he says. “To conclude, the projects are getting increasingly bigger each quarter and the same goes for sensors deployed.”

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.