by James A. Martin

6 things marketers need to know about beacons

Feb 24, 2016
InternetInternet of ThingsMarketing

Bluetooth 'beacons' are a simple way for marketers to communicate with customers in physical locations, but the platforms and infrastructure behind the tiny wireless sensors can be quite complex. Here's a quick guide to the basics of beacons.

In today’s noisy culture, it’s increasingly difficult for enterprise marketers to reach customers and prospects, much less prompt them to take desired actions. However, this complex challenge appears to have at least one relatively simple solution: Bluetooth Low Energy (BLE) “beacons.” Also known as “proximity beacons,” the inexpensive devices transmit relevant, targeted messages and information to nearby mobile devices.

Retailers are among the earliest BLE beacon adopters. A beacon-equipped department store could, for example, send special offers on baggage to customers as they enter, proceed through, or linger in the luggage department. Drug store chain Rite Aid recently announced a rollout of proximity beacons in each of its 4,500 U.S. stores, reportedly making it the largest retail deployment to date, according to ZDNet.

Beacons aren’t just for marketers from brick-and-mortar retailers, either. They’re also being deployed in sports and concert arenas, airports, trade shows and conferences (such as CES), schools, and museums that hope to engage and learn more about their customers. In many cases, the goal behind beacons is to increase customer engagement and, thus, sales and loyalty. Enterprises use beacons for logistics, as well, and some hospitals use the devices to improve patient care or track expensive assets.

ABI Research estimates suggest 3.9 million BLE beacons shipped globally in 2015, and the company projects the type of enterprises that adopt the technology in 2016 will continue to diversify, according to Patrick Connolly, ABI’s principal analyst. Here are the basics of BLE beacons that every CMO and their marketing teams need to know. 

1. What exactly are BLE beacons? 

Beacons are small, battery-powered, always-on devices that use BLE technology to transmit signals to devices, such as smartphones and tablets, within a range of about 300 feet.

Beacons are one-way transmitters; they detect nearby devices in order to send them messages, but the target devices don’t send information back to the beacons. Beacons are like lighthouses, according Patrick Leddy, CEO and founder of mobile marketing firm Pulsate, who spoke on the subject in a whiteboard video. “They send out a signal. They’re unaware of themselves and any other devices around them … They’re just sending out these BLE packets and saying ‘Hey, I’m here, see me, take action if you want.” 

Multiple beacons can be positioned around an area, such as inside a store or airport, to broadcast relevant information to portable devices within their proximity. Mobile device owners can then react to, engage with, or use the information for indoor, turn-by-turn navigation and store discounts, among other things.

Beacons can also be used to track devices, and their users, when in range. For instance, marketers can use beacons that connect to mobile devices to determine how long customers linger in a specific store aisle.

2. Are there different beacon platforms?

The two biggest players in the beacon market are Apple and Google, and they both have their own standardized BLE beacon implementations. 

Apple’s iBeacon was the first standardized BLE beacon platform. The company introduced the technology during its summer 2013 Worldwide Developers Conference, when it added iBeacon support to iOS 7. The iBeacon platform lets developers build mobile apps that can receive transmissions, such as location-aware notifications, from iBeacon-compatible devices. 

On Dec. 6, 2013, Apple installed iBeacons in all of its 254 U.S. retail stores. Shoppers with the Apple Store app installed on their Bluetooth-enabled, iOS devices with active location services can receive in-store notifications about deals, new products and more.

In July 2015, Google announced Eddystone, its BLE beacon technology. (A U.K. lighthouse inspired the name). Eddystone is similar to iBeacon, but unlike Apple’s implementation, Google’s is open source, and it’s available on GitHub.

Both iOS and Android users can receive messages sent via the iBeacon and Eddystone platforms, according to Errett Kroeter, vice president of marketing for Bluetooth SIG. Marketers “don’t need to worry about buying an iBeacon versus an Eddystone beacon,” he says, because they work across the two platforms. 

However, some differences between Apple’s and Google’s implementations do exist. Most notably, Google’s beacon platform can transmit URLs to mobile devices, which can then be opened in a mobile browser, Kroeter says. This feature coincides with Google’s philosophy of the mobile browser as an all-purpose app. Apple’s iBeacon implementation, as of now, interacts only with mobile apps on users’ smartphones.

3. Who makes beacons, and how much do they cost?

Google and Apple don’t make their own beacons. A variety of vendors manufacture and sell beacons based on one or both implementation standards, including Aruba, Estimote, Gimbal, and Radius Networks.

Beacons aren’t expensive. Gimbal Proximity Beacons cost between $5 and $30, for example. Prices differ due to beacon signal range, types of batteries used, typical battery life (which can be several years), and other factors.

Facebook for Business makes BLE beacons available for free to businesses with Facebook pages. The beacons are specifically designed to trigger Facebook Place Tips and deliver information about the businesses to users’ smartphones.

4. Why should marketing and sales use beacons?

Proximity data from beacons can provide brick-and-mortar retailers and other organizations with the some of the same physical personalization and targeting advantages they already have online.

Beacons can also help marketers gain more detailed customer insights. For example, retailers can get a better sense of how long customers spend on average in their stores, and in which aisles. “If you know customers spend a great deal of time in this store versus another store, and this product grouping versus another, you might do some retargeting across one of your ad networks, or maybe in your app” as a result of that knowledge, according to Pulsate’s Leddy.

Beacons can help boost customer loyalty by “rewarding not only transactions but physical presence in the store and getting click-and-collect orders ready as soon as customers walk in, and then letting them know,” Leddy says.

Marketers are also more likely to get the attention they want for their marketing messages when they use beacons. And the geo-targeted messages beacons transmit can increase the “open rate” of mobile marketing messages significantly. In fact, people open standard push notifications about 14 percent of the time, but they open messages transmitted by a beacon 53 percent of the time, because they’re more immediately relevant, according to mobile advertising firm Beintoo.

Coupled with special offers and promotions, beacons can help increase sales of merchandise, food and beverages, as well. For example, at the recent Super Bowl in Santa Clara, Calif., Levi’s Stadium used about 2,000 beacons, along with the stadium’s app, which helped increase food and beverage orders by 67 percent compared to the stadium’s previous record, according to John Paul, CEO and founder of VenueNext. (VenueNext developed the infrastructure that let fans order food and drinks from their smartphones and have them delivered to their seats, as well. It also provided directions around the stadium and video replays.) 

5. Do beacons have disadvantages or shortcomings?

As Shelley Bernstein, the Brooklyn Museum’s vice director of digital engagement and technology explained in a blog post, “there’s a lot of overhead to deal with” when deploying beacons. Bernsteincited a number of potential problems, including the need to match the colors of beacons to the museum walls they stick to; keeping the beacons stuck to those walls; and identifying faulty beacons, because the devices typically lack individual serial numbers. 

Managing a network of beacons can also pose multiple challenges. The limited range of BLE devices may mean many beacons are required to fully cover a large area. Marketers may also need to adjust signal strength and manually check some inexpensive beacons on a regular basis to ensure they’re charged and working properly. For more expensive beacons, firmware updates and other management tasks can be performed via Wi-Fi. (InfoWorld recently detailed these and other beacon deployment challenges.)

Beacon implementations costs aren’t always affordable, either.According to a February 2016 Forrester Research report, “Beacon implementation costs appear to be low … However, many business and technology decision-makers don’t take into consideration that the operational costs of deploying and managing these devices on an ongoing basis can be around $300 per beacon per year. For example, with beacons, someone has to manually place one and map it on a drawing. And this assumes that one is using the same type of beacons. Managing beacon technologies from multiple vendors exponentially increases the operational costs to install, update, and maintain them across each of these platforms.”

Too often, enterprise marketers get excited about the potential to reach customers in new ways, according to Michele Pelino, a principal analyst with Forrester Research and coauthor of the report, “but they don’t think about who will manage the beacons over time, what the full business costs will be, what happens if something goes wrong with the beacons, or what to do if their signals overlap another store next door.”

Many different firms manage enterprise beacon deployment and the maintenance of mobile-marketing or customer engagement efforts, including Aruba, Swirl (for retailers), Proximity Sense, Gimbal, MOCA, inMarket and Rover.

Most beacon-based marketing efforts are immature at this point, however, according to several analysts interviewed for this story, because marketers are still trying to figure out how to leverage the technology. Krista Garcia, a retail analyst for eMarketer, recently visited three stores in Manhattan that she knows uses beacons: Sephora, Macy’s, and Lord & Taylor. Her goal was to receive location-aware offers and notifications in the stores. Of the three retailers, only one deliver an in-store offer — a Macy’s promotion for Dolce & Gabbana perfume, which Garcia got when she wasn’t even in the perfume department. (She was on the same floor, though).

Marketers must tread a fine line between enabling better customer experiences and annoying those people with too many messages, according to Mark Hung, a research vice president with Gartner. “Retailers are still trying to figure out the best way to engage customers, and the last thing they want to do is alienate them by pushing coupons that annoy them,” he says.

Beacons can also raise privacy and security concerns. They typically transmit to mobile apps on users’ smartphones and may “ask permissions for things people don’t quite understand,” says Kurt Roemer, chief security strategist at Citrix. When consumers accept those requests, “beacons can install software, access contacts, your location — they can do anything on your phone you can do,” Roemer says. “CMOs and digital marketers should ensure that consumers are aware of privacy policies associated with beacons, or lack there of.”

(This blog post lists a number of beacon-related security best practices for marketers.) 

6. What’s next for beacons? 

Beacons are still a nascent technology. After the initial hype around beacons during the past year or two, some observers say they are likely to go the route of the QR code and remain a niche technology.

Others, such as Gartner’s Hung, say beacon deployments will continue to grow, as a way for marketers to reach customers and as a logistics technology, helping companies manage assets in large facilities. And beacons are also being used in many new ways, such as helping to guide blind commuters through London’s Tube system, according to Wired.

In the near future, beacons will find their ways into smart home systems, too, according to Kroeter of the Bluetooth SIG. Imagine arriving home after a long day — at an enterprise marketing job, perhaps — to a home that automatically senses your presence, switches on the lights, and turns on a favorite playlist. This sort of “useful contextual awareness,” according to Kroeter, could play a significant part in the future of beacons.