Commentary

Beaconing & the Retailer Programmatic Ad Exchange

Shoppers are about to start receiving highly targeted ads directly from brands while in stores, near where specific products are sold.

This programmatic ad buying is coming to retailers, courtesy of beacons.

Swirl Networks, the ad network company whose beacon platform is used by Timberland, Lord & Taylor and Kenneth Cole, among others, just introduced the Swirl Ad Exchange (SWx) for proximity-based, in-store mobile marketing.

The idea is essentially to create a private ad exchange controlled by the retailer, Hilmi Ozguc, founder and CEO of Boston-based Swirl told me.

A brand would have a dashboard where they could see retailers’ departments in which their products are sold. They then could request to run ads for shoppers within a certain distance of those products, determined by beacons in those departments.

For example, at Lord & Taylor in Boston, where I regularly test the in-store beaconing, I already have received full-screen mobile ads from Michael Kors upon entering the department carrying handbags.

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The retailer essentially becomes the publisher, selling advertising space to brands to interact with highly coveted shoppers while near their products. Once the retailer approves a brand for a department, the advertising process becomes totally automated and the retailer sees a potential new revenue stream.

It also is in real time. And this is where it can get interesting.

Since multiple brands may be approved for certain departments, this can provide an opportunity for real-time bidding for those departments, a future plan of the ad exchange, according to Ozguc.

To reach these opted-in shoppers, the cost per view will be around 50 cents to $1.50, Ozguc estimates.

The retailer also needs a ‘co-publisher,’ the provider of the app in which the consumer interacts. In the case of Lord & Taylor, the app SnipSnap is used, though a retailer can determine which app is activated by the beacon, since in most cases there ultimately will be a number of apps equipped to be beacon-triggered.

However, from the consumer’s viewpoint, it appears that the messaging is coming directly from the retailer.  

At scale, the ad exchange could provide a brand with opportunities for flash sales based on inventory, offers by region, store category or department as well as automatic programming for reaching a pre-determined number of mobile shoppers within a certain timeframe.

Beaconing is moving into the advertising world in a big way. More importantly, it’s moving ever-so-closely to when and where a consumer buys.

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Check out the MediaPost conference on beacons, being held Nov. 3 in New York (IoT: Beacons).

 

 

10 comments about "Beaconing & the Retailer Programmatic Ad Exchange".
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  1. Doc Searls from ProjectVRM, October 20, 2014 at 1:36 p.m.

    Somebody please create an app that steers customers clear of retailers beaming unwanted, un-asked-for advertising at them.

  2. charles martin from Chuck Martin, October 20, 2014 at 3:47 p.m.

    That would be some app, Doc. In this case, the only people getting the ads would be those who actually agreed in advance to see them.

  3. Doc Searls from ProjectVRM, October 21, 2014 at 12:29 a.m.

    The people seeing the ads would ideally be self-qualified leads, rather than targets of guesswork who don't regard their phones as billboards.

  4. charles martin from Chuck Martin, October 21, 2014 at 11:43 a.m.

    Exactly right, Doc. Still to be determined is how many will do this and what messaging will be most effective. Some of the beaconing provides services rather than ads, which holds great promise.

  5. Brian Singleton from Local Corporation, October 22, 2014 at 11:03 p.m.

    “To reach these opted-in shoppers, the cost per view will be around 50 cents to $1.50, Ozguc estimates.”

    That is a $500-$1500 CPM on a mobile banner ad… seems a bit aggressive, but perhaps they will get some buyers for that.

  6. Doc Searls from ProjectVRM, October 23, 2014 at 11:13 a.m.

    Chuck, take a look at intentcasting, where the customer does the signaling. Here's a list of developers already working on it: . All are VRM (Vendor Relationship Management ) developers, working on the customer's side, rather than the seller's — but producing fully qualified leads, and reducing the amount of guesswork on the seller's side.

  7. Doc Searls from ProjectVRM, October 23, 2014 at 12:08 p.m.

    Well, it won't let me put in links. Still, not hard to look the subjects up.

  8. charles martin from Chuck Martin, October 23, 2014 at 4:20 p.m.

    Yes, Brian, translated into CPM would be a bit on the high side, as an understatement. However, the perceived value is that the potential buyer is in buying mode (in a store) and near a product, so the value is the potential (and measurable) influence point on that specific purchase.

  9. charles martin from Chuck Martin, October 23, 2014 at 4:27 p.m.

    Thanks Doc, most interesting (and the links came through in my notification email, so thanks for those.) A leading edge concept.

    http://cyber.law.harvard.edu/projectvrm/VRM_Development_Work

    http://en.wikipedia.org/wiki/Vendor_relationship_management

  10. charles martin from Chuck Martin, October 23, 2014 at 4:27 p.m.

    And I got your links to appear Doc, so thanks for sending.

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