How Beacons will Revolutionise Advertising

A few years ago QR codes were regarded as the holy grail of advertising, promising to change how people interact with advertisements.

The idea was to scan that ugly black and white pixelated pattern with your phone in order to load their website, however they never really caught on for a few important reasons. The most notable of these reasons being people’s reluctance to take the effort to view more advertising. A new technology called Beacons, or iBeacons as Apple brands them, might just fulfil the promise of QR codes and provide new opportunities for companies; but at what cost?

The idea behind a Beacon is that it can notify nearby smart devices of their location in a specific context. For example, a Beacon might be situated in a particular shopping aisle to send notifications of specials to nearby shoppers based on their previous purchasing history, as well as their online habits. The technology powering Beacons isn’t especially new, as it is essentially a subset of modern Bluetooth called Bluetooth Low Energy, however their integration is innovative. Their best feature of all: unlike QR codes they don’t require the user to perform an action, as the Beacon notifies the user. This opens up many applications, such as showing more information about nearby products in a store, however it also brings a new swarm of privacy concerns. QR codes may not have caught on because shoppers had no intention to view more advertising, but without the need for a user to do anything, Beacons may no longer give them the choice.

The most valuable asset in the advertising industry is data. Every move you make online is carefully tracked to create mountains of data that feed into complex algorithms, which learn about your interests to display more relevant advertisements. This is how massive companies like Google and Facebook can survive without charging a cent. Online shopping stores track your purchases across the web, but they are blind to the physical world. How do people navigate aisles to come to a purchase? How can you target customers in brick and mortar stores with data gathered from their online activities? These are some of the problems in the advertising industry that Beacons could revolutionise.

At this point, retailers that want to push information to a device or personally identify somebody cannot unless the person already has their app installed. In some cases the store can anonymously track a device’s movement through an area by picking up it’s MAC addresses (not to be confused with Apple computers) over Wi-Fi or Bluetooth, but Apple devices now scramble this address when searching for networks, possibly to encourage the use of Apple’s iBeacons. There are even companies taking advantage of this unique identity to measure traffic flow by tracking drivers’ devices!

Recently, some companies have flipped the Beacon model on its head by making each user a Beacon. How would they get people to use this? By embedding it in the conscientious shopper’s favourite asset, the humble loyalty card! By carrying around a Beacon, a customer’s movements throughout the store – and possibly the wider world – could be tracked and associated with purchases, credit cards and Internet shopping accounts. This data is a gold mine for advertising data analytics, not to mention national intelligence organisations. Our world is more subtle than Orwell’s, but our issues are still terrifying. These applications might seem far-fetched, but with the mobile advertising market alone predicted to be worth $76.57 billion by 2018, the money is there to drive innovation. Amidst the data collection of Beacons, iWallets and loyalty cards, no doubt cold hard untraceable cash will be here to stay.

Jake Coppinger, 2015
jakecoppinger.com


Further Reading:

Apple, (2015). iBeacon for Developers. [online] Available at: https://developer.apple.com/ibeacon/ [Accessed 24 Feb. 2015].

Expletiveinserted, (2015). Apple’s M7: Filling the Gaps for Indoor Location Estimation. [online] Available at: http://expletiveinserted.com/2013/09/14/apples-m7-filling-the-gaps-for-indoor-location-estimation/ [Accessed 24 Feb. 2015].

Howden, B. (2014). iBeacon win – iOS 8 to introduce MAC address randomization. [online] Lighthouse Blog. Available at: http://blog.lighthouse.io/ibeacon-win-ios-8-introduce-mac-address-randomization/ [Accessed 24 Feb. 2015].

Loiwal, N. (2015). The Potential Of Beacon Technology. [online] TechCrunch. Available at: http://techcrunch.com/2014/11/01/unlocking-the-potential-of-beacon-technology/ [Accessed 24 Feb. 2015].

Marketsandmarkets, (2015). Cross-Platform and Mobile Advertising Market worth $76.57 Billion by 2018. [online] Available at: http://www.marketsandmarkets.com/PressReleases/mobile-advertising.asp [Accessed 24 Feb. 2015].