SMX West 2016 recap: A deep dive into beacons and how marketers can use them

For experienced marketers looking for advice on how to leverage beacons and hyper-local targeting, “Beacons: The Opportunities, Limitations and How Marketers Can Use Them Today” was the panel to attend at Search Engine Land’s SMX West 2016.

This session brought together seasoned industry veterans to discuss the basics of beacons and local targeting from a hardware and software standpoint, as well as the challenges and opportunities that come with utilizing beacons within your business.

Beacon-based marketing holds the potential to change the way businesses connect with consumers and could help people become more engaged with your products and services. They also could help you get analytical insights, aka the holy grail, to tie online and out-of-home (OOH) marketing back to in-store actions.

Below are the key takeaways from each of the presentations.

“Beacons: Opportunities, Limitations and How Marketers Can Use Them Today” by Keri Danielski

Keri Danielski, the VP of Marketing and PR at Gimbal, spoke about the technology and the use cases for beacons. Gimbal provides both the hardware and the software that a business needs to leverage hyperlocal targeting.

Beacons are just one of many hardware form factors that are available in the market today, but they’re among the most cost-effective, with prices ranging from $5 to $500. A survey showed that 84 percent of shoppers engage with a mobile device before or while shopping. And it’s estimated that 57 percent of shoppers engage with location-based ads.

Beacons help bridge the gap between your mobile ads and in-store shoppers.

Throughout her presentation, Danielski had in-depth content that reviewed at a high level some of the available form factors, ranging from GPS (Global Positioning System) units to RFID (radio-frequency identification) chipsets to beacons, as well as in-depth materials explaining the basics of how beacon technology works.

The basics of how beacons work:

• Beacons are small devices that transmit a secured ID signal that says “I’m here!”
• The transmitted signal can be detected by an SDK (software development kit) within a mobile app.
• The smartphone relays detection to a content management system.
• The content management system determines if and how to engage with the consumer.
• If part of the engagement plan involves pushing data, then the content management systems sends content directly to the app on the smartphone.

Beacons can help you understand and engage with your customers. The path to purchase isn’t always straightforward, and today there are many blind spots in tying online and offline together.

Beacons can help fill in some of the gaps and create a better view of the consumer purchase journey.

While retail is the clear leader in beacon usage at this point in time, don’t write off other industries and the opportunities to reach consumers. For example:

• Sports & Entertainment Venues: Personalize the mobile experience for fans.
• Retailers: Engage with shoppers and provide attribution.
• Agencies/Advertisers: Better understand mobile audiences and attribution; create audiences to be used across marketing channels.
• Out-Of-Home Networks: Tie attribution of physical assets to digital or in-store engagement.

Key takeaway: There are many possibilities for the use of beacons to help tie together your offline and online experiences. Don’t forget that the process goes from crawl to walk to run.

“Beacons — Opportunities for Marketers” by Raj Nijjer

Raj Nijjer, the VP of community at Yext, discussed both the challenges and the opportunities businesses face in leveraging beacon targeting.

According to Nijjer, store visits are a new KPI (key performance indicator). Beacons are the most popular option, in terms of proximity technology and software, especially when paired with geo-fencing.

Beacons can help retailers address the problem of “showrooming,” where consumers go to a physical retail store to touch and interact with a product, only to purchase it online at a discount retailer. Beacons can allow the retailer to create unique experiences and offers to the consumer in the physical store.

Challenges:

• Hardware infrastructure.
• Most beacon SDKs are tied to a specific mobile app.
  • If a visitor doesn’t have that specific app, the beacon can’t engage or tag the user.
  • Unless the app has large adoption and usage, it can be difficult for local retailers to gather enough information for audience remarketing or specific analytical trends.

Yext offers a XONE, a beacon solution that isn’t tied to a specific app but to a network of apps, increasing the likelihood for beacons to identify and tag consumers. In the Q&A portion of the session, the panelists were asked about other app networks or solutions similar to XONE, but they weren’t able to identify additional networks.

Opportunities:

• Audience: Build an audience of local visitors, and then gain insights on their demographics and interests. You can then leverage these audiences for remarketing campaigns.
• Attribution: Measure the impact of your media buys against the store visits.
• Presence: Improve engagement with your customers based on what they engaged with inside a retail store. You can choose to send them specific coupons or promotions with push notifications or promote new items/events based on their previous purchases.
• Analytics: Get the data you’ve been wanting so you can measure the impact of online to offline metrics like store visits and purchases.

The key takeaway: While there are challenges with beacon technology, leveraging an app network can help businesses move into the crawl and walk phases of beacon adoption.

“Smokin’ Hot Tips for Beacon Marketing” by Greg Gifford

Greg Gifford, the Director of Search & Social at DealerOn, provided a real-world case study of the usage of beacons in a local auto dealership and the direct impact on digital marketing campaign performance.

• Location services work even if the app isn’t open or running on your smartphone. Beacons will tag anyone within the active radius that you set. That radius can be as big as 50 feet or as small as one foot to get hyper-local targeting.
• The Xone system is directly integrated with Facebook ads. This allows tagged users to be uploaded into Facebook to create a Custom Audience.
• The Custom Audience updates automatically in real time.
• Now you can run retargeting ads to in-store foot traffic. (This could also tie to people who walk by out-of-home advertising!)

Right now, there is a technology constraint that only allows the placement of a single beacon per location. However, as technology advances, it will allow us to place multiple beacons at strategic locations to understand customer behavior and interests and then create Custom Audiences in Facebook based on the consumer behavior.

Here are some of the examples Gifford presented as to how an auto dealership could place beacons to create audience segments:

• Inside specific car models on the showroom floor.
• In the Sales Department.
• In the Service Department.
• In the Sales Finance Department.
• Throughout the used-car portion of the car lot.

After four to six months of collecting enough data from visitors, Gifford was able to create customized audiences and send ridiculously targeted offers. His team created an A/B test showing the ad to the audience that was at the dealership versus a general Facebook audience and saw 34-percent increase in CTR (for what was not an amazing offer, based on the constraints that the dealership gave them).

Then the visitors received a better offer, and in a second similar test, the dealership saw a 45-percent increase in CTR for the Custom Audience created by the beacon traffic.

The key takeaway: Using beacons to create Custom Audiences, combined with good offers/deals in Facebook, can show some significant lift in campaign performance. Using multiple beacons to create customized segments will be a whole new ball game for local businesses.

There is a wide world of possibilities with beacon technology for local businesses, and despite some of the current challenges, it can be a worthwhile investment to create custom hyper-local targeted audiences and get better insight on the online-to-offline funnel.