Commentary

Be Wary of Beacon Technology Hype

Marketers at retail companies were the first to test beacons and implement in-store marketing, but now marketers in other industries, including fast-moving consumer goods, travel and hospitality and conference and event organizing, are starting to embrace the technology.

Beacons have a great deal of disruptive potential as they bridge the digital and physical worlds, but marketing leaders must resist the hype and think strategically and responsibly about how — and if — to implement beacon marketing programs.

By identifying consumers in shops, stadiums, airports or events through beacon transmitters, marketers have the ability to initiate conversations with consumers by sending real-time content, services and promotions. One of the most obvious benefits of beacon technology is to engage consumers via in-app interactions.

However, marketers tend to overhype opportunities and forget to put the customer at the center of their strategies. Despite the hype, reach today is limited and few players, such as Major League Baseball, are rolling out thousands of beacons nationwide.

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Part of the problem with beacon technologies is that many marketers are confused about what they are. Some believe there is a lot of intelligence in the beacons themselves. The reality is that beacons are dumb pieces of hardware that simply communicate location information that can be interpreted by mobile applications. Marketers will be tempted to try to push advertising messages through beacons directly to smartphones, but intelligence and engagement will come from marketers’ ability to deliver deep and immediate value to customers by contextualizing their offerings in real time.

This will require more effort than most marketers are ready to deliver today.

To fully leverage the potential of the technology, marketers must contextualize and personalize the marketing experience. To take into account customers’ preferences, tastes, past purchases and motivations to ensure the relevance of their message, marketers should integrate the location data from their beacon programs into their campaign management, customer relationship management (CRM) and marketing systems.

In addition, it will be key to evolve the privacy policy and be very clear about the data marketers are using and what they are using it for, in addition to messaging the benefits that consumers get. A third (33%) of U.S. online adults that Forrester surveyed mentioned privacy as the top reason for not being interested in receiving digital coupons or product information on their mobile phone while shopping in a physical store.

The smartest use of beacon technology is more extensive than simple marketing promotion.

Moving forward, marketers will also be able to:

  • Improve the customer experience. While there may be the potential for retail discounts and offers, it is key to look at beacons to see how to provide a more seamless customer experience. That’s how airline companies like Virgin Atlantic and EasyJet are testing the technology.
  • Understand customer behaviors. Beacons can act as “cookies” of the physical world, giving indications on the physical places that consumers visit, provided the users have given consent for the app to capture their location. By passively tracking behaviors through aggregated and anonymous location data, brands can gain meaningful insights on their customers’ behaviors in the real world.
  • Help close the attribution gap and measure effectiveness of marketing campaigns. In the longer run, by matching data on mobile ads and in-store purchases, beacons will facilitate attribution of offline performance to mobile marketing.

 

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