Proximity Marketing

Everything you need to know about proximity marketing solutions, how they work and their implementations

Beacon

Proximity marketing

iBeacon and Eddystone

What is proximity marketing? How does it work?

Proximity marketing refers to communicating with customers at the right place, the right time and with highly relevant and personalised messages, on their smartphones - be it greeting at the entry points, special offers in the store aisles, or getting feedback on a new product.

Legacy advertisements on television, billboards, radio and pamphlets could be appealing, but they lack the impulsive drive to avail an offer, or try a new product. However, digital technology, such as beacons have bridged this gap between offline and online.

For decades, traditional shopkeepers and business owners have been communicating with their customers at significant moments, but proximity marketing as a term got introduced to marketers in 2008. This led to brands and businesses sending location-triggered text messages to cell phones that were in proximity to a Bluetooth network and had "discoverable" Bluetooth mode switched on.

The Ultimate guide to proximity marketing using beacons

How does proximity marketing work (using beacons)?

Working of proximity marketing

To understand how proximity marketing works, let us consider an example of a retail store.

  1. Beacons are deployed at the storefront or in aisles with ongoing offers.
  2. These BLE beacons transmit signals in its range. BLE signals are a combination of numbers and characters.
  3. The signals are detected by any Bluetooth-enabled smartphone, in the transmitting range.
  4. The smartphone then sends the ID number attached to the signal to the cloud server.
  5. The server checks the action assigned to that ID number and responds accordingly. It could be a notification about a discount, or a product launch, a feedback form or just a greeting!
  6. These notifications will then drive customers to a relevant form, a webpage or a markdown card (a Beaconstac card creative which works as a substitute for a website).

Location-based marketing vs proximity marketing

Businesses, especially retail and real estate, have been focussing immensely on location for the last decade. This is because reaching out to customers without being sure of the location is just digital marketing, which is not very effective for local businesses. However, marketers and business owners now realize that the targeting needs to be more specific than just GPS and geofencing. This is where proximity marketing steps in. Let’s understand in detail about their differences and when each one of them is useful.

Location-based marketing

Location-based marketing in simple terms means communicating with potential customers within a range. Let’s say, a coffee shop runs a campaign to introduce a new almond flavoured Cappuccino on their menu. Setting a location based marketing campaign would mean that all potential customers in the range of, let’s say 1 kilometer, are notified about the new coffee. This might also include reaching out to a user in the nearby ice-cream store.

This is done by calculating the latitude and longitude of the smartphone using GPS or cell tower triangulation method. It is hence defined as the kind of marketing that uses mobile to target customers in a particular geographical area.

Geofence is a virtual boundary which can range from over 50,000 meters to anything else. Ideally, for interactions above 80-100 meters, business owners must consider geofencing.

Proximity marketing

Proximity marketing however, is a more granular form of location marketing. For the same example discussed above, the coffee shop owner could decide to have a more targeted approach and reach out to customers passing his coffee shop, lets say in the range of 300 meters. This approach is more personalized and contextually relevant.

Proximity marketing is about reaching out to customers based on the accurate position and not a virtual geofence. This makes the communication more contextual and personalised.

Proximity marketing is recommended for highly targeted zones - within 100m of distance. Proximity marketing use-cases involve interaction with customers about a particular product, brand on a shelf, or any other similar application.

Proximity marketing technologies

Business owners and marketers have been using proximity solutions that do not involve technology, for decades - physical signage and banners. But in last few years, technologies have become much more affordable, and therefore, a lot of businesses have integrated them into their marketing strategies. Advanced technologies that make proximity marketing happen are - Bluetooth beacons, NFC, RFID and WiFi.

1. Proximity marketing using Bluetooth beacons

Bluetooth beacons are currently the leading proximity marketing technology. According to Proximity Directory Report Q4 2017, 86% of the proximity sensors deployed across the world are beacons. According to the same report, 7 18,763,000 proximity sensors were deployed by Q4 2017. Beacons are low energy transmitters, equipped with Bluetooth low energy, used to deliver contextually relevant notification on nearby smartphones.

There are two beacon standards :-

iBeacon: Apple first launched beacon standard in 2013. That is when physical and digital started merging. A lot of retailers like Macy's, Walmart and Starwood hotels stepped up to the plate to implement iBeacon in their store outlets. iBeacon allows apps on smartphones to receive BLE signals from the beacon.

Eddystone: Google introduced the Eddystone protocol in 2015. It is an open URL protocol specification that defines Bluetooth low energy (BLE) message format for proximity beacon messages. It has since become hugely popular among businesses and has only continued to grow. Eddystone protocol restricted the popularity of iBeacons in no time. Now, smartphones can receive Eddystone signals with or without apps.

Beaconstac beacons support both Eddystone and iBeacon.

2. Proximity marketing with NFC based systems

NFC was designed to enable highly secure payments and applications. NFC enabled customers to pay just by tapping smartphones against NFC-enabled devices. This technology did not fly off really well, even though it appeared promising in the beginning.This failure could be due to the following reasons -

3. Proximity marketing with Wi-Fi-based systems

Wi-Fi has not traditionally been a proximity solution. However, with the widespread of public Wi-Fi, marketers are now leveraging Wi-Fi to send notifications. The Wi-Fi hosting website can send location-specific content to the consumer’s browser.

However, Wi-Fi requires users to consent to a connection each time they enter the business location. And, Wi-Fi-based systems are not very accurate when it comes to proximity marketing.

4. Proximity marketing with RFID based systems

RFID tags are used to track store product movement and inventory. RFID introduced in 2003, was considered a revolution. It quickly went from the little-known technology to the next big thing. However, this rapid growth was ephemeral. Here’s why RFID has limited adoption :-

Comparing proximity technologies

Why is Bluetooth beacon better than competing technologies?

Proximity with beacons yield results way superior to legacy channels and other competing technologies.

1. 10 billion smartphones in 2018 are Bluetooth-enabled

Beacons broadcast notifications to Bluetooth enabled smartphones. In 2018, nearly 4 billion devices will ship with Bluetooth technology. The percentage of people having their Bluetooth switched on, varies from country to country.

Based on our research and statistics over the internet, approximately 50% of the users in Canada and US have their Bluetooth switched on. Russia has 25%, whereas the UK has 33% of the users with Bluetooth switched on all the time.

2. Beacon campaigns do not need an app

With beacon technology, businesses may or may not leverage the experience of their brand app to communicate with their consumers. With the Eddystone protocol, sending notifications without an app is a breeze.

Google Nearby, a pre-installed service on Android phones, scans for Eddystone URLs and displays the content linked to it. Other than Google Nearby, Physical Web compatible third-party apps and browsers also work similarly.

3. The click-through rate is far superior to competitor technologies

The click-through rate of a beacon campaign varies based on multiple parameters :

However, when done well, beacon campaigns have yielded a click-through rate (CTR) of 55% - 60%. However, this is not typical for all businesses. On an average, most small businesses see a CTR of 2% - 4%. With higher targeting and personalisation, the results get better.

A CTR of 2% is incredible for offline businesses given the results attained by other advertising channels. CTR of an average beacon campaign is 25 times that of a social media campaign.

Beacon campaign comparison

4. Beacons have an excellent ROI

The three factors which contribute to the brilliant ROI of beacons are - low cost, long battery life and minimal efforts.

  1. These tiny devices cost less than $20
  2. Most beacons have an average battery life of 2 years. However, it varies based on the type beacon in use and its transmitting range
  3. Beacons work out-of-the-box! This means business owners do not need an engineer onboard to start broadcasting beacon campaigns. It’s easy to use and seamless to configure

With Beaconstac, Creative Marketing Clinic achieved a 40% increase in customer engagement!

According to Unacast’s Proximity.Directory Q1 2017 Report, retailers can improve their position and increase the operating profit by nearly 9% with an ROI of 175%. This ROI figure shoots to 365% for small and medium businesses.

How to set up a proximity marketing campaign using beacons?

1. Choose the right beacon form factor for your business

Beaconstac supports various beacon hardware options which are found to be best in field tests. The hardware lineup consists of all-purpose indoor beacons, robust long range beacons, pocket beacons and keychain beacons.

The lineup includes beacons in various form factors to suit multiple business needs and applications. Learn more about the options we support on the Beaconstac hardware data-sheet.

Types of beacons

2. Plan the beacon deployment strategy

Beacon deployment strategy depends on what the business wants to achieve. However, there are few tips for beacon deployment which work across industries.

3. Create a markdown card/form (Or, an https website)

Beacon notifications can direct to a custom URL (any website), a form, or a markdown card. Markdown cards are creatives used instead of websites. Beaconstac provides markdown templates which can be easily modified to suit various campaigns. [Download inspirational markdown cards across verticals]

Beacon notifications markdown card

4. Assign it to a beacon

Assign the markdown card or form to the transmitting beacon. Watch the video to learn how to do it.

5. Create a notification

Beaconstac allows the notification creation in multiple languages. This helps marketers target customers in their preferred language. [Read more about dynamic notifications]

Dynamic notifications

How are business using proximity marketing?

Beacon technology has changed the way brands interact with customers. Although advertisement remains the primary benefit of proximity marketing, marketers leverage it for a lot of other use cases.

1. Advertisement

Gone are days when brands were courting customers only by sending out advertisements on television, radio and magazines. In the last few years, advertisements have made a significant shift to a more targetable and data-driven option - beacons. Legacy ads cannot be micro sliced via location or demographics. This is why marketers are now relying on proximity marketing solutions to find, engage and most importantly, bring back customers.

2. Personalisation to enhance engagement

Brick and mortar stores can achieve the level of personalisation that e-commerce sites like Amazon and Walmart offer. With beacons in stores, marketers can achieve the following :-

  1. Send recommendations related to their purchase history.
  2. Upsell products.
  3. Send recommendations based on shopping habits.

Personalization leads to positive experiences that, in turn, leads to more engagement, loyalty and sales. According to research by Marketing Insider Group, 78% of consumers say relevant content increases their purchase intent.

3. Loyalty programs

Customer loyalty programs are all about keeping current customers engaged and happy. These programs enable customers to automatically check in, get credit for their purchases and earn loyalty rewards. Big brands and local merchants are now using beacons to provide mobile loyalty among customers. Interesting use cases of beacon-based loyalty programs are :-

  1. Send customized notifications on offers to patrons when they are closeby.
  2. Deliver time-sensitive geo-targeted offers with greater precision.
  3. Reward loyal customers for spending time with you.

4. Amassing offline data

Businesses today, rely heavily on sophisticated data gathering mechanism. This is because data-driven campaigns help in better understanding of shopping behaviour. Many successful retail brands like Macy’s, Walmart, Kenneth Cole are using beacons to gather extensive data for future campaigns.

With beacons, retailers can,

  1. Track footfall
  2. Create heatmaps of zones in the store
  3. Analyse merchandising effectiveness
  4. Gauge customer loyalty
  5. Analyse the content type that drives consumers

Implement a proximity marketing campaign without an app?

Very few technologies have seen the kind of success that beacons have. And this is primarily because with the introduction of Eddystone; marketers did not require apps to communicate with their customers. Beacons communicate with Bluetooth enabled smartphones via two different protocols - Eddystone and iBeacon.

Eddystone beacons broadcast URLs that can be detected by smartphones even without an app. Services on the device such as Nearby Notifications, Samsung CloseBy or Physical Web compatible apps scan for and display these Eddystone URLs after passing them through a proxy.

Samsung closeby and Android nearby sevices

On Android phones - Nearby is a Google service developed for Android phones. It scans for Eddystone URLs and detects packet if any.

On Samsung phones - Similar to Nearby, CloseBy in Samsung phones continuously scan for Eddystone URLs in its range and once found, it displays information on the Samsung devices through its Internet browser.

Beacon marketing without an app

On iOS phones - To implement beacon campaigns on iOS devices, these devices need to have Physical Web compatible apps or browsers. iOS devices need third-party apps to scan and detect notifications. We have developed our app - “Nearbee”, which continuously scan for Eddystone URLs.

How to run proximity marketing campaigns on iOS devices?

Proximity marketing for iOS devices needs apps. This could be the brand app or a third party app that customers have on their phones

Proximity campaigns on iOS devices

Businesses that have a brand app

Proximity marketing campaigns which leverage their brand apps yield impressive results. Companies such as Heineken, Coca-Cola and Screenvision leveraged their brand apps to implement proximity campaigns and witnessed massive success.

Beaconstac SDK enables quick integration of beacons into any application.

Beacon marketing with an app

Businesses that do not have a brand app

Such businesses need high performing and innovative third-party apps to implement proximity campaigns. Third-party apps strike the right balance between respecting a consumer’s privacy while providing timely proximity marketing notifications. These third-party apps continuously scan for Eddystone URLs and display the notifications as soon as they detect an Eddystone URL.

Beaconstac has developed an app – Nearbee. This app scans for Nearby notifications and displays the notification on the iOS device. Here’s how it is superior to any other third party app :–

  1. Add an app intent to the campaign.
  2. Allows delivering notifications at a specific time of the day, or days of a week.
  3. The app is designed to run and scan quietly in the background. This means users get the notification even when the device is locked.
  4. With the app, you can send telemetry information to the Google beacon platform where you can monitor the health of beacons.
  5. Send multiple notifications from a single beacon.
Nearbee

Proximity marketing across industries

Proximity marketing in retail

Proximity marketing in retail has moved beyond push notifications and coupons. It is now in the next level of personalised content delivery. It has eventually become the biggest drivers of beacon deployments. Retail is leveraging beacons for attracting new customers, enhancing their store experience, building loyalty through personalised messages and collecting customer feedback.

Beaconstac for Retail

Beacon 101 for retail

Proximity marketing in real estate

Real estate is one of those transforming industries that has recently picked up significant interest in beacon-based proximity marketing for boosting customer experience. The real estate brokers and agents are currently using beacons to attract home buyers, capture leads, push business cards and engage with them.

Beaconstac for real estate

Beacon 101 for real estate

Proximity marketing in hospitality and travel

Given the hyper-local and contextual capabilities of proximity marketing using beacons, they are of immense value to both travellers and the tourism industry. Proximity marketing using beacons is being widely used at airports, hotels and attractive tourist destinations to enhance the experience of visitors.

Proximity marketing in small businesses

Small businesses like coffee shops, stand-alone restaurants, spa and salons, retail stores, and car dealerships have found enormous success with exciting and compelling beacon use cases. Beacons provide an excellent ROI to small businesses given the cost and minimal effort needed in setting it up.

Beacon 101 for small business

Latest news in proximity marketing space

Proximity marketing in action at Collingwood’s annual street event

A street festival is conducted in the Downtown Collingwood every year. The organisers introduced proximity marketing using beacons to this annual art event. Each year’s festival has a different …Read more

AFRC leverages beacons for recruitment

AFRC (Air Force Reserve Command Recruiting Service) recently launched an interactive Mobile Marketing Platform (MMP) for recruitment. The purpose of this MMP is to increase awareness, drive engagement, …Read more

Starbucks edges out Apple Pay

Businesses are creating their own payment apps, which help them to capture valuable data about their users besides easing the payment process. Starbucks is one of those successful businesses. …Read more

Proximity marketing is 16 times more effective than Google Pay per click

Millennials rate personalisation and convenience as keys to a great shopping experience. Shopping platforms are continuously improving their services by enhancing the level of relevance and personalisation …Read more

Proximity marketing regional analysis

The regional analysis of proximity marketing market by digitaljournal.com reveals that North America will hold majority of proximity marketing market share with high penetration of mobile devices …Read more