How Location-Based Technologies Are Creating Out-of-Home Advertising Markets of the Future
If you want to take advantage of new location-based technologies for innovative outdoor campaigns, check out our guide to the best protocols, devices, and methods to take your marketing on the road.
Over the last fifteen years, new technological advances have begun to change the nature of location-based advertising and information services. From the simple expediency of ensuring that your chain or sole business appears in popular online map services through to high-tech campaigns around events and happenings, the impetus to leverage a customer's location has gained steady traction in marketing.
The concepts behind smart 'out-of-home' (OOH) marketing techniques are developed and refined by some of the biggest players in marketing. They are backed by forward-thinking municipal authorities around the world, which are increasingly partnering with the private sector to deliver smart city experiences.
The core enabling technologies include proximity communication protocols, which facilitate the flow of location-activated information, and beacons. The latter are devices that can communicate with nearby people and with other beacons in a wider-ranging network.
These are relatively new methodologies that are only now proving their value, robustness, and versatility. So, now is a perfect time to engage in enterprise mobile app development and explore the potential of the 'exterior' marketing experience.
Proximity Communication Protocols in Brief
Opting in to the terms of in-store Wi-Fi can enable a retailer to communicate directly with a customer via text messages or digital messaging systems. Depending on the granularity of the permissions that the customer grants in exchange for the service, user-specific data can be incorporated into wider communications, including online activities and re-engaging at other outlets.
Bluetooth Low Energy (BLE)
Bluetooth 5 has extended the utility, operability, and range of this older local-field protocol, allowing for connecting with customers and prospects who are nearby but not quite in the target location yet.
However, its greater range comes with a trade-off in data integrity and throughput, which is limited to 125 KB at higher ranges. This means that brand communications need to be very tightly-designed and implemented.
Near Field Communications (NFC)
NFC operates in inches, the narrowest physical range compared to other protocols. Although it is traditionally associated with point-of-sale (POS) terminals, it can be used for file transfer too. Companies such as Campari, Lego, Nike, and Wired Magazine have leaned into NFC limitations to develop marketing applications exploiting the possibility for location-aware technology to be placed very close to the end user.
Starting from 2017, developers can make use of the ability of iOS devices to read non-payment (NDEF) NFC tags, though with some format restrictions. Google's Android also provides open-source classes to implement the necessary protocols. Android's more open implementation and earlier adoption have made NFC/NDEF development a mature workflow for Google's OS.
These familiar blocky ciphers can provide an attractive 'legacy' portal into more up-to-date and innovative location-based technologies. Since they require initial action from the end user to take effect, one might consider QR codes as a 'last-generation' OOH method. However, they come with the advantage that customers usually know how they work, which is not necessarily the case with NFC implementations.
For non-connected end users, QR codes can be employed, for instance, to download a dedicated app and unlock a fuller location-based experience—also accomplishing a huge primary or secondary hurdle in any campaign's mission objectives.
Global Positioning System (GPS)
For open-air events and more speculative marketing campaigns, GPS has the advantage of being very familiar to the customer. However, its occasional failures around location accuracy can be a hindrance, making it a non-starter for some of the campaigns where it would otherwise be most beneficial, such as in large enclosed expo spaces.
Here, instead, marketers must rely on mesh-based networks which can assemble a network view of the space from individual beacons or near-field units. One such possibility is a Bluetooth-based mesh network, although other Indoor Positioning System (IPS) technologies are available (see below).
Zigbee and Z-Wave
Zigbee's set of high-level communication protocols has gained significant uptake since its conception in 1998. It's frequently deployed in low-power wireless mesh networks that have become available in recent years for both domestic use and public installations. Notably, lighting manufacturer Philips uses Zigbee for its innovative Hue smart lighting system.
Conceived around the same time, Z-Wave has also gained good traction in smart homes. Z-Wave has a larger native range (100 feet) compared to Zigbee (33-66 feet), but is a less cohesive and discrete product. However, it operates at low frequencies around the 918/960 MHz band, whereas Zigbee can additionally connect in the 2.4Ghz range familiar as a Wi-Fi frequency. Since both protocols scale in a modular fashion, based on the frequency of linked units around the location, individual transmission reach is not usually a critical factor in installations.
Mechanisms of Engagement
There are a variety of devices and methods capable of engaging with consumer devices such as smartphones, many of which can also work in concert with each other.
Inexpensive and simple to install, beacons are currently the first choice for interactions with consumers. Apple's iBeacon protocol is of great interest for many marketing sectors, since the Apple consumer profile is such a desirable target, However, it is a relatively closed-source solution. At the same time, Google's Eddystone protocol for Android currently represents the direct competition with a visible uptake in its open source offering.
Based on GPS, a geofence defines a sector of land against which to apply rules for location-enabled devices. Governments use them, for instance, to ban drone flights from prisons, while marketing companies employ geofences to delineate areas where a campaign is active—such as a store or open-air event where messages can be pushed to opted-in consumers.
Radio Frequency Identification (RFID)
RFID was introduced primarily as a payment method, frequently for transport systems, in the early 2000s. Although it can be retro-fitted for marketing purposes, it has inherent limitations. These include:
- A lack of industry standards
- The tendency for multiple RFID devices to conflict or interfere with each other's operations
- The relatively high upfront cost of the equipment, particularly compared to BLE
- A typically limited catchment field
- No opportunity to personalize RFID (i.e. for a particular time of day)
- A very limited native compatibility in the smartphone market
There are now a large number of scalable, enterprise-grade facial recognition APIs that can be hooked into proximity marketing solutions. Open-source efforts such as OpenCV are joined by semi-open-source industry powerhouses such as Google Cloud Vision, and commercial offerings like IBM Watson Visual Recognition, Amazon Rekognition, Microsoft Face API, and insurgent offerings from Animetrics and FaceX.
In 2015, an innovative campaign to highlight domestic violence brought facial recognition marketing techniques into the news when Women's Aid, a British NGO, created an interactive outdoor display advert featuring a woman with bruises. Facial recognition cameras were set to recognize viewer attention and diminish the injuries as more people looked on and reacted. The campaign's hook was “Don't turn a blind eye to domestic violence” and this inventive spin on new marketing technologies made a notable impact.
A Municipal Ride
Cities which have adopted beacon technology as a municipal mandate can offer advertisers a pre-existing framework for geolocation campaigns and initiatives. In 2016, Amsterdam opened up its own implementation of Google's beacon technologies to developers looking to leverage civic APIs to create new urban experiences and facilities for tourists and natives alike.
In another example, the 100 Resilient Cities project targets 100 municipalities around the world which are addressing crumbling infrastructure or insufficient public services with IoT and data-driven solutions, frequently in concert with sponsors and local businesses.
This growing convergence of IoT-driven civic and business frameworks, requirements and solutions is described by the Gartner Group as the Nexus of Forces, and by others as the Third Platform—a space where mobile devices, Big Data analytics, the internet of things and the cloud converge to create cross-sector (i.e. the public and the private sector) connectivity platforms. Where these public initiatives are developing, there are extraordinary opportunities for new location-driven experiences created by the private sector.
Creative Approaches and Compelling Cases for Opting-In
Many online resources paint an attractive picture of IoT-based OOH campaigns which effortlessly push promotional messages to consumers based on their location. However, this assumes that your customer has already opted into your marketing system.
Where this isn't the case, an OOH campaign will need to provide value, novelty, and innovation in order to get a non-participating consumer at least initially into the interaction space. You can't offer discounts, deals or other calls to action if you haven't yet been able to open the primary channels for communication with the customer.
It's important for an effective IoT campaign to have more than one possible point of entry (see 'QR codes' above), and to target outlying as well as subscribed consumers via a broad range of location-based technologies and approaches. Pushing messages to converted or semi-converted customers will sometimes reap only limited rewards, and this industry space is currently looking to invent its way past push marketing messages and into more novel and inventive campaign designs.
One appealing approach is to create engaging experiences that make consumers willing to opt in to your framework with experiences that invite curiosity, such as augmented reality (AR) overlays on portable consumer devices.
We've examined the marketing potential of AR in a previous article, and discussed some compelling use cases which encourage consumer adoption of geo-specific campaigns. Those willing to join the vanguard of the coming AR revolution with innovative experiences where the novelty transcends the aim, are set to reap the collateral benefits of opt-in to wider tranches of geo-based brand advertising.
Gadget-driven IoT innovations
Another possibility is to solve a tiresome everyday niggle with inventive use of near-field technologies. Drinks company Martini took this approach in developing a 'smart' ice-cube that uses BLE and Apple's iBeacon to understand when a customer's drink is finished, and automatically order a refill.
In 2017, wine and sherry manufacturer Barbadillo used an extremely thin NFC-enabled film attached to 126,000 bottles of wine to create 'smart bottles' containing a call-to-action around their competition.
Geoconquesting is a new wrinkle on the long-term commercial warfare between local stores, which has traditionally been dominated by the purchase of diversionary advertising space near the site of the 'enemy'. It's is an aggressive guerilla marketing tactic that seeks to divert potential customers from a competitor's actual location to one's own.
One notable example occurred in 2013 when Guatemalan shoe retailer Meat Pack hijacked former customers who were approaching a rival store. Meat Pack had erected a geofence around the competitor's premises; when the former customer (who by now had opted into Meat Pack's promotional infrastructure) approached the rival store, a gamified promotional ad was sent to the customer's phone offering the maximum of a 99% discount, dropping by 1% every second. The result? 600 customers were poached from the competitor, with 89% the highest discount awarded.
In 2018, fast-food franchise Burger King operated a similar geo-strike against McDonald’s. The 'Whopper detour' campaign generated a reported 1.5 million extra app downloads by targeting the larger chain's nearby stores.
However, the effectiveness of geoconquesting is perhaps best limited to one-off strikes whose inventiveness is likely to generate suitable and welcome publicity. For one thing, your rival could strike back in the long term with equal or greater force; certain campaigns or aggressive actions could provoke legal issues in particular territories or circumstances; end users could learn to game a long-term algorithm in their own favor; and finally, one has to consider the demographic quality of customers so easily appropriated, and the cost of supporting a long-term undercut in a market that may have thin margins.
The Potential of OOH Marketing Implementations
The evolution of near-field technologies and geolocation marketing solutions offer companies a chance to generate 'Zen' moments of wakefulness in consumer segments that have become otherwise immured to traditional online channels. Commercial messages developed in this way offer a novelty and appeal that transcend traditional resistance to advertising.
Here are some of such notable case studies:
- Amazon has used a range of IoT location-based technologies to implement stores without registers
- Italian media group RCS geo-fenced 200,000 square meters for the final two days of the 2015 Giro D'Italia, serving 45,000 impressions to 30,000 individuals with iPhones via Apple's iBeacon system
- French supermarket chain Auchan instigated a beacon-based system of navigation and promotion for customers traversing one of its largest (31,000 feet) outlets in Ukraine
- In 2016, a new system of proximity sensors helped NBA team Orlando Magic increase app adoption by 30%, as well as boosting ticket sales by 233%
However, new customer profiling and tracking procedures are not limited to major event producers or large-scale service providers or retailers: in Australia, one coffee-shop uses customers' biometric data (with their permission) to improve service via home-spun facial recognition technology. Dutch real estate agents Makelaardij Hoekstra use the Lightcurb beacon framework to provide property viewers with virtual information on site. Finally, a library in Orlando, Florida, provides patrons with welcome messages and virtual guides through a beacon-enabled app.
Geofencing and other established and emerging location-based technologies offer unparalleled opportunities to gather actionable data about your customers' shopping habits when they are in proximity to your store. While these technologies also offer deeper insights into on-premises consumer behavior, OOH campaigns can be equally effective when the goal is conversion or acquisition of a new customer.
To wrap up, these are the key ways to approach OOH marketing:
- Understand your customers' motivations and drives
- Have clear objectives and achievable metrics to evaluate the effectiveness of your location-enabled campaigns
- Ensure logic and consistency in campaigns (such as not offering inventory which is out of stock, or channeling customers to a location that is currently closed)
- Finally, have some fun with the amazing possibilities for 'real-world' interactive marketing and analytics, so that this enthusiasm can express itself in enjoyable and rewarding location-based campaigns
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