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Beacon Marketing: The New Frontier of Digital Advertising

As the world evolves, and technology becomes more and more entwined in our everyday lives, advertisers are constantly on the lookout for the next best technological advancement to target consumers. So what’s that next big marketing strategy today? Beacon technology.

Perhaps the easiest way to explain the basics of beacon technology is to compare it to a lighthouse. A lighthouse signals to people that there is something there but then leaves that person at their own discretion to figure out what is there. Beacon technology sends a signal out to the world but rather than identifying landscapes, dangerous waters or landmarks, beacons identify any device that is Bluetooth compatible. And rather than leave the specific identification up to a map, or knowledge of the sea, beacons gather vital information about a device owner’s habits – from age and race to what you were searching for just a few minutes ago (crazy right?). Most of these beacons could fit in the palm of your hand and are placed near key items that give off Bluetooth low energy waves to devices with Bluetooth turned on.

These neat waves require minor battery usage and can penetrate barriers, which allows for beacons to be used in many locations and give off specific information. Beacons typically give off three different types of signals – each of which tells your phone something different. But most importantly it tells your phone what type of ad you’ll be delivered. People tend to argue about how Apple and Android are so different, but with beacons it doesn't matter! All types of phones still receive the beacons’ signals and can act on those signals.

So how are beacons being used in digital advertising? Well, they are beginning to be used in a variety of ways from simple data tracking to location identification, but its focus is looking to be on advertising. The basic premise of beacons is to gather information about the customer and then send him or her a relevant ad in real time while they are shopping.

So for example, let’s say I’m shopping for groceries at the store. If the store is located near beacons and my Bluetooth is turned on, I will get a notification from one of my apps that is beacon adapted. This notification, if I open it, will have an ad for something I’m looking for that is probably right in front of me! As I walked down the soda aisle and opened up my shopping list app, I got an ad for Coke that originated from the beacon set up right next to me. The beacon must have “seen” my phone and then after analyzing my web searches, age, and gender, decided that I fit the demographic that is most likely to buy a Coke. This is a great strategy because it lets advertisers really personalize their ads so that they are seen by the right people at the right time. It is also great for me because I got to see a great deal for a buy one get one free coupon on my phone!

Although beacons seem pretty amazing, there are a couple slight hiccups with them so far. One problem is that not everyone has their Bluetooth turned on for their phone all the time- though it’s commonly estimated around 40-50% do. Another early problem beacons are facing is the cost of maintenance. Because beacons can't send signals that far, you need a lot of them to cover a large area, and it gets pretty expensive to go from beacon to beacon making sure settings are correct and that none of the customers accidentally broke them!

Even so, beacons have a bright future in digital advertising. Beacons are personalizing the advertising experience to levels we never thought possible. As everyone feeds their addiction to social media and their smartphone, generic ads are viewed excessively and consequently being ignored. With beacons though, advertisers are getting out more tailored ads and getting those ads to consumers at a time where it is really easy and convenient for people to take advantage of those offers. Personally, I hope beacons begin to be used more because c’mon, who wants to see another random ad when it can be individualized. That’s the difference between seeing a coupon for soccer cleats and high heels. I’ll take the cleats.

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