New ad tool 'beacon' to chase mobile users

These little transmitters could make the world around us richer, more useful and more interactive.

The beacons are here. And they might not be all bad. Beacons, tiny low-powered radio transmitters that send signals to phones just feet away, have quickly become a new front in the advertising industry’s chase to find you whenever, and exactly wherever, you are.Although most consumers are just learning about these devices, tens or even hundreds of thousands of them have been installed across the USA: outdoors on buildings, inside stores and even at National Football League and Major League Baseball stadiums.

The point of the devices is to send a specific signal, using low-energy Bluetooth, to phones that come into proximity, as long as those phones are running apps that can respond to the beacon. Those codes then set off an action on the phone, like a coupon, a reminder, a reward or just information. A beacon at the gates of a baseball stadium could open a map to the user’s seat and offer a beer or hot dog coupon.

Already, though, pitfalls have emerged. Last week, BuzzFeed reported that an advertising company had installed hundreds of beacons in phone booths across New York, with the city’s permission. The devices could communicate with a select few apps on people’s smartphones as they passed by, pushing advertising to those phones. Shortly after the beacons’ presence was reported, the city ordered that they be removed.

 The flap illustrates the unfortunate ways that beacons are likely to be used in the short term: as a cheap, easy way to set up advertising networks that use the apps on our phones to send us spam with promotional messages or collect personal information about us.

That’s too bad, because while it is easy to think only of coupons, advertising and data collection when we think of beacons, the reality is that these little transmitters could also make the world around us richer, more useful and more interactive. They could enrich museum experiences, deliver the right recipe in the grocery store aisle, take us on interactive tours of cities and towns, let us quickly and easily check in to hotels or even pay at the gas pump. And used properly, sure, they could also deliver the right coupon at the right time.

One important point to keep in mind about beacon technology is that the transmitters — which range in size from a tiny USB dongle to a silver dollar — don’t store or send any information. The devices use low-energy Bluetooth to send unique codes that cause an action from an app. In order for any beacon-led action to happen on a phone, you must install an app that communicates with beacons. And installing one kind of app doesn’t mean you are authorising all beacons to talk to your phone. An NFL app, for example, can communicate only with the beacons the NFL has installed. 

Most of those beacon-friendly apps are available on Apple’s iOS operating system, because Apple included the necessary technology in iOS 7, and the OS communicates with a network of beacons built to Apple’s specifications, called iBeacons. The next version of the mobile operating system, code-named Android L, is expected to be able to respond to beacon codes.

The apps that now work with beacons include the Apple Store app, which responds to the devices inside Apple’s physical stores. The app then offers in-store notifications that let you pick up online orders, check in for a tech support reservation or buy accessories from your phone. Or you could be using an app like Shopkick, which offers shopping rewards once users enter a store, and which recently conducted a beacon-specific experiment with the clothing retailer American Eagle.

“Looking at these beacons, we saw tons of potential but really started with something simple,” said Joe Megibow, the chief digital officer of American Eagle. “With just little tiny incentives, nudges or pushes, could we actually change the behaviour and get a positive reaction out of our customer?”

The test focused on users who had installed the Shopkick app and were already using it to get rewards when they shopped in physical stores. When those users entered an American Eagle store, about half of them were told they could get more rewards for trying on clothes in the fitting room. Beacons installed near the fitting rooms determined whether those shoppers went inside. Megibow said people who got a reward for trying on clothes visited the fitting rooms at twice the rate as those who didn’t get the reward message. “That’s pretty amazing,” he said. “It tells you the power of getting the right message at the right time.” 

The technology has uses far beyond shopping, though. Doug Thompson co-founded a marketing company called Dot3, which uses beacons to enhance real-world experiences like museum visits. In Britain, Dot3 is introducing a beacon experience at the Royal Botanical Gardens in Kew, a World Heritage Site that includes a palace and several greenhouses spread over about 300 acres just west of London.

App to guide visitors

An app that guides visitors through the gardens, he said, will display horticultural illustrations and pictures of the garden from the 1800s, as well and paintings and photographs. Users don’t have to search for the information and it will appear on their devices when they are near the relevant spot.

Thompson and others see beacons as a way for local businesses to add messaging to their users — even personal messages, like from a trainer to a client, sent when the client walks in the gym door. “The most important thing is that your app is more aware,” he said. “You might have the grocer’s app and get a message when you walk in but what you really want is when you open the app in the fish department, it has fish recipes.”With that power will come temptation. Some companies will surely consider beacons as an easy way to set up networks of ad-serving transmitters that pop up messages. And the apps they use could collect and share data about you, including your location history. 

Justin Brookman, director of consumer privacy at the Centre for Democracy and Technology, said he would like restrictions on the data that could be collected and how it was sent. The platforms, he said, needed to “find ways to put contractual limits in place to find out what installed apps can collect and whether they can phone home.”

But consumers can take their own steps to avoid beacon alerts. For one thing, you can simply uninstall any app that starts showing unwanted messages. And if you’re really concerned that you have accidentally installed apps that communicate with beacons, you can turn off Bluetooth. Unfortunately, data collection and aggressive advertising will almost certainly be part of the early days of the beacon rollout. But hopefully the phase will pass quickly, because beacons have a lot of potential to deliver rich digital context on top of the real world.

To realise that future, users will have to know which apps to trust and reject the apps and the companies that take advantage of our phones’ home screens. The ultimate future of beacon technology is really up to us.