What is a Bluetooth beacon?

How do beacons work? Why is beacon marketing so appealing?


Proximity marketing

iBeacon and Eddystone

What is a beacon?

A beacon is a small Bluetooth radio transmitter, powered by batteries. Beacons are similar to a lighthouse in functionality. These small hardware devices incessantly transmit Bluetooth Low Energy (BLE) signals. The Bluetooth enabled smartphones are capable of scanning and displaying these signals.

Beacons could be deployed on store-fronts, real estate properties, amusement parks, events and other public venues to broadcast contextually-relevant advertisements and notifications.


What is a BLE beacon?

It is important to understand the difference between classic Bluetooth and Bluetooth Low Energy to appreciate BLE beacons. Classic Bluetooth consumes high power and transmits to long ranges, which is suited for Bluetooth headsets and speakers.

However, Bluetooth Low Energy transmits less data over a smaller range, hence consuming much less power. BLE beacons transfers small amounts of data at regular intervals of time.

How does a Bluetooth beacon work?

To understand how beacons work let's take an example of a coffee shop with beacon deployment.

  1. Let’s assume, beacons are deployed at the entrance of a coffee shop
  2. These beacons transmit signals in its range. The range of beacons vary from 20m to 300m. (Know more about the range of Beaconstac beacons)
  3. Smartphones in the range of beacons is itself indicating that the smartphones are nearby.
  4. The smartphone then sends the ID number attached to the signal to the cloud server
  5. The server responds with the action linked to the beacon ID. It could be a notification introducing a new appetizer in the cafe, combo deals, video of coffee making or a feedback form!
  6. These notifications drive customers to a webpage, a form, a phone number or whatever you plan to do.
Working of proximity marketing

What is the physics behind a Bluetooth Smart beacon? What is a beacon like on the inside?

Beacon is a tiny device with a massive impact on advertising. A beacon is designed with three major components - a small ARM computer, a Bluetooth Smart connectivity module and batteries for powering the entire circuit. The CPU of the ARM computer has an antenna attached to it, which broadcasts electromagnetic waves with specific length and frequency.

Beacon is a tiny device with a massive impact on advertising. A beacon is designed with three major components - a small ARM computer, a Bluetooth Smart connectivity module and batteries for powering the entire circuit. The CPU of the ARM computer has an antenna attached to it, which broadcasts electromagnetic waves with specific length and frequency.

Inside a beacon

What does a beacon transmit?

Beacons transmit data packets. The components of these packets are slightly different for iBeacons to eddystone. But in general, they just contain an ID with their spatial data, a component that indicates the status of the beacon (e.g temperature, battery status etc.) and a URL (only for Eddystone beacons) that would correspond to some data in the Nearby server.

Why are beacons so appealing to marketers?

Bluetooth beacons are a convenient way for marketers to communicate with the customers. Not just convenient but also contextually relevant and personalized. Here are few of the reasons why BLE beacons so appealing to marketers -

1. High click-through rates

Click-through rates of beacon campaigns are way superior than competing technologies. These technologies include RFID, NFC, QR codes and WiFi. Apart from the click-through rates, these technologies have their own set of challenges - high upfront cost, needs users to have an app on the phone, requires user to initiate and more.

Social media marketing, such as Facebook and Twitter ads also witness click-through rates lower than average CTR of beacon campaigns. The average CTR of Facebook ads in 2018 is 0.119%, whereas the average CTR of Twitter ads is 1-3%. However, the average CTR of beacon campaigns is 3-4%. Well-executed beacon campaigns yield a CTR of 12-15%!

The CTR of beacon campaigns is approximately 80 times the CTR of display ads, across all ad formats and placements (0.05%) [TWEET THIS]

Beacon campaign comparison

2. Beacon campaigns do not require APPS to broadcast marketing campaigns

Most other marketing channels, such as social media, QR codes and NFC require an app on the user’s smartphone. Unlike these beacons are capable of communicating with the smartphones via Bluetooth. Google Nearby and Samsung Closeby, default services on Android phones, enable smartphones to scan and display beacon notifications.

Here’s how you can run a beacon marketing project without an app. Notifications

3. Cost effective marketing strategy: excellent ROI

Beacons cost less than $20 and are powered by batteries that last for a couple of years. The low cost coupled with minimal effort needed to install the beacons makes it an out-of-the-box and cost-effective solution to deploy and derive great ROI.

According to a report by Unacast, retailers can increase their operating profits by 9% with an ROI of 175%. For small businesses, the ROI can go upto 365%!

4. Online retargeting with Facebook and Google Adwords

Retargeting is emerging as a compelling use case in the proximity marketing space. With this in mind, Beaconstac allows marketers to deepen the connection with their customers even after they have left the store. Marketers can retarget users who viewed the campaign in-store, on Facebook and Google ads.

Online retargeting

Here’s how you can create a beacon campaign to retarget customers using Facebook Pixel.

5. Measure offline analytics and customer behaviour

Beaconstac serves as a proximity marketing data platform that gathers all the analytics needed to iterate on campaigns. It helps marketers understand customer’s spending habits and product preferences, enabling them to create highly personalized and targeted beacon campaigns. Some of the important analytics on Beaconstac platform are -

  1. Notifications sent
  2. Click through rate of individual places and campaigns
  3. Which type of campaigns are performing well
  4. Visitor details and more

6. Small businesses out tech the competition

Technologies like beacon are something only larger retailers could afford or at least that is what the perception is today. But actually, Beacons are a revolutionary way for small businesses to compete with the large retailers. Your ability to use them helps level the playing field.

How does a beacon connect offline and online worlds?

You can promote your online store from your offline premises or push notifications to the people in the vicinity of your store to download your shopping app. For example, You can shout out an exciting offer through your app and lure the user with to visit your store or entice the user to download your app when the she is shopping in your store.

How do you activate a beacon?

Depending on the kind of beacons you are using, indoor beacons, long range beacons, keychain beacons, pocket beacons and outdoor beacons, the activation process will vary. Some of these requires you to insert batteries whereas some of them have inbuilt batteries. Here a comparison -

Beacon External battery needed? External power button?
Indoor beacons Yes No
Long range beacons No Yes
Outdoor beacons Yes Yes
Pocket beacons No Yes
Keychain beacons No No

Based on the requirements from the list below, you need to insert batteries and press and hold the external power button. The beacons will then be activated and ready to transmit beacon notifications.

Once the beacon is activated, it pulls the campaign assigned to it from the Beaconstac platform and broadcasts it to smartphones nearby.

What is a proximity beacon used for?

As the beacon market matures, the use cases related to it also expand. Among many other beacon applications, businesses are using beacons for driving new customers, transforming the customer engagement engaging, gathering feedback and passing valuable information. Here’s a list of the most popular beacon use-cases -

1. Location-based personalised advertisements

Beacons are being leveraged in retail stores, supermarkets, restaurants and spas to broadcast daily offers, deal of the day, promotions and more. Beacons are replacing standees in front of stores and traffic signals in a much more personalized and contextually relevant manner.

Customers are welcoming to relevant marketing messages rather than being bombarded with a plethora of deals that do not excite them. A customer in the kids’ section is likely to avail offers on kid garments. However, a standee displaying offers on kids’ garments is not relevant to most customers walking passed it. This is why beacons are such a powerful tool in the marketing and advertising arsenal.

With Beaconstac’s integration with Apple Wallet, sending offers and deals has become all the more interesting. Customers can save the offers and deals as a pass which can be used when required. This makes sure that businesses do not lose on customers who do not require the deal currently.

2. Wayfinding and navigation

Let’s say, a retail store leverages a billboard at the busiest traffic signal to inform potential customers about a store launch 700m away. This obviously is quite a smart move given the impressions that the billboard might have. However, this campaign lacks the impulse to act upon.

Now imagine adding a long-range beacon on the billboard - in a way transform it into a talking billboard! This beacon broadcasts a notification with a Google Map link attached to it. In a single click the potential customer will be ready to navigate to the new store. Various marketers are using this trick to drive customers into their stores and offices!

3. Pushing business cards or service information

Most service-based businesses like freelance marketing, delivery services, self-defence tutor and car mechanics want to inform residents about their services in order to grow their customer base. Pushing information about a service via beacons is highly effective because it does not require an app. Professionals can reach out to all nearby smartphones that have their Bluetooth switched on.

Beaconstac also allows you to push business cards which can be directly saved to the mobile device for future references.

4. Retargeting users on Facebook and Google Ads

It’s incredible when customer journeys are linear - users hear about the brand, they head to the nearest store and make a purchase. Unfortunately, such user journeys are rare. Retargeting with Beaconstac makes it easy to create a clear path back to your business. It’s just few steps before you can start reaching out to visitors who showed some interest but did not return.

5. Amassing customer data for creating better campaigns

Using beacons, you can get many insights of customer behaviours for example: if you run a retail store, beacons will help you out with understanding the customer’s in-store experience. You can learn about entry and exit data,footfall patterns, time spent in the store, time spent in a particular section, least visited sections, iteration of visits, etc. You can use these data to understand the customer and make your advertisements more personalized.

Not just these, but Bluetooth beacons can be put to use for a host of other use cases including and not just limited to-

6. Loyalty programs
7. Online payments
8. Treasure hunts
. Passing information about a monument or painting at a museum

How do end-users interact with a beacon?

When campaigns are assigned to a beacon, it broadcasts them to Bluetooth-enabled smartphones in its proximity. Android phones can instantly receive campaigns because they have in-built services (Google Nearby and Samsung CloseBy) that are built to scan these signals and display the associated campaign. iPhones, however, require a separate third party application, such as Nearbee, to do the same.

Based on what you have chosen to broadcast, the user can either receive a markdown card, form, or custom URL. It will first appear as a notification on the user’s lock screen. On clicking this notification, the user will be directed to the campaign which will display across the screen.

Here are some ways to can encourage users to engage with your campaign:

  1. Call To Action: Providing users the opportunity to take further action is a great way to increase engagement. Using call to action buttons you could use a phone number, email id, or a link to your website.
  2. Relevant videos: To make users remember your, visual aids are key. Embedding powerful and relevant videos can make your campaign very effective and encourage users to take further action.
  3. Apple Wallet: This gives iPhone users the opportunity to save your campaign to their Apple Wallet. This can be very useful if they are interested in redeeming your offer at a later point in time. While Android users do not have a Wallet, they can select a “Save to your device” option which saves a screenshot of the campaign to their gallery.
  4. Forms and Surveys: These are campaigns that can be used to collect useful information about users. Encouraging customers to give feedback is great way to maintain engagement.
Proximity marketing with beacons

Terms related to beacons

TX Power: It is a measure of the level up to which a beacon can transmit signals. The Tx power of a beacon can range from -30dBm to +4dBm.

The maximum range (at a transmission power of +4dBm) of different beacon hardware types are as follows:

Transmission Power Level Output Power Maximum Distance
Long Range Beacon Pocket Beacon Keychain beacon
0 -30 dBm 1-2 m 1-2 m 1 m
1 -20 dBm 7 m 5 m 4 m
2 -16 dBm 18 m 13 m 10 m
3 -12 dBm 28 m 22 m 23 m
4 -8 dBm 42 m 27 m 27 m
5 -4 dBm 64 m 41 m 38 m
6 0 dBm 90 m 71 m 54 m
7 +4 dBm 270 m 100 m 80 m

Advertising interval: This determines how often packets are being broadcasted by the beacon.

Battery life: Beacons have long battery lives of two years, when they are set to their default configuration.

Transmission power and Advertising interval affect the battery life of a beacon. Transmission power is inversely related while advertising interval is directly proportional to battery life.

Transmission Power ↑     Battery ↓

Advertising Interval ↑     Battery ↑

Useful resources about beacons

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