Proximity marketing isn’t anything new.
Marketers have been looking for ways to target customers at pivotal, decision-making moments for the past decade.
As consumer response trends towards personalization, brands are reorganizing their marketing strategies around hyper-local techniques and location.
If “right place, right time” marketing is at the top of your marketing to-do list, it may be time to harness the power of proximity technology.
What is proximity marketing?
Proximity marketing, also referred to as “hyperlocal marketing”, serves local ads to consumers based on how close they are to a specific location or “beacon.”
When a customer is near this beacon, brands then release highly relevant, personalized messaging.
Brands deploy local marketing for a variety of reasons. Some of these reasons include:
- Providing consumers more information on a service or product.
- Enticing customers to make a purchasing decision in the immediate future.
- Engaging and improving the consumer experience.
- Retrieving feedback on a new product or service.
- Better realizing the wants and needs of consumers, including patterns of behavior.
Why proximity marketing matters
Targeting consumers without knowing their location is a broad form of digital marketing. This kind of digital marketing may be useful for eCommerce brands, but it isn’t an effective strategy for local businesses.
As the number of cellular subscriptions climbs past the total number of people on Earth; marketers are beginning to realize the power of proximity tech.
The demand for anywhere/anytime Internet access tells us that serving generic ads to broad demographics isn’t enough. Customers also want ads that are customized to their real-time experiences.
Don’t just take our word for it . . .
- 7 out of 10 consumers yearn for personalized ads. (Adlucent)
- Consumers want fewer but more personalized ads. (IAB)
- 4 out of 5 consumers are more likely to make a purchase when a brand provides a personalized experience. (Epsilon)
- 71% of consumers feel frustrated with impersonal shopping experiences. (Segment)
- Consumer demand for personalized content is at an all-time high. (Adobe)
So, what does this mean for advertisers?
According to Adobe, consumers are using smartphones more than any other device. Plus, they want brands to provide them with memorable experiences that are created just for them.
Traditional forms of digital marketing serve ads based on past behavior and consumer history. Proximity marketing, on the other hand, serves ads related to a consumer’s current experience happening in real-time.
With proximity marketing, both the consumer and brand ultimately benefit. Consumers benefit from receiving highly relevant, individualized information right when it means the most, while marketers benefit from gaining trust and loyalty with their customers.
Proximity marketing vs. location-based marketing
Many people confuse proximity marketing with location-based marketing.
It’s true that both techniques target consumers based on their current location. However, proximity does so on a more granular level.
Here are their differences explained.
Location-based marketing is communication with potential customers within a specific range.
For example, a business may want to get the word out about a new product. With a location-based marketing campaign, the merchant can send potential customers a notification. This notification releases to all devices in a range of, let’s say, a mile.
Marketers achieve location-based marketing by harnessing latitude and longitude data through the GPS devices in consumers’ smartphones. Customers are then targeted when they enter in a certain geographical area. This area is identified with the creation of a geofence, or virtual boundary.
Geofencing may be a good choice for those who want to initiate an interaction within 80-100 meters and over from a specific location.
Proximity marketing, on the other hand, is a more granular approach to location marketing.
It is so precise that it doesn’t require a virtual boundary at all. Instead, business owners place proximity marketing beacons in and around their businesses.
Proximity techniques are much more personalized. Furthermore, it is contextually relevant to the user’s real-time experience.
Proximity doesn’t require a virtual fence. Instead, the focus is to target each customer based on their accurate position. Therefore, it is best to target a zone between 100m or less of the targeted location.
More specifically, beacons focus on interactions with consumers regarding certain brands or products. Personalized offers are then issued to influence impulse purchasing decisions.
Proximity marketing requirements
Proximity marketing involves the use of physical beacons, set up at a specific location.
When a Bluetooth-enabled device comes within range of that beacon, it releases information in the form of images, text, or video via the targeted mobile app.
To deploy this technique, there are some requirements:
- First, marketers must set up a beacon in a specified location, where they would like to initiate marketing messages and other information.
- Next, consumers must have a Bluetooth-enabled mobile device in range of the beacon location where proximity is applied.
- Lastly, the targeted consumer must have the brand’s mobile application installed on his or her phone. That app must also be capable of receiving push notifications.
How does it work?
Once you have your proximity marketing devices purchased and set up, here’s how the technology works.
1. Device detection
A beacon will broadcast a unique ID number at regular intervals while scanning for Bluetooth-enabled devices. The proximity-aware mobile app will also carry a list of ID numbers to beacons that have been activated. When the app and beacon ID number match up, the beacon lets the app know it’s within range.
2. Permission request
Once the app is within range, the beacon will initiate a request to the consumers, seeking permission to communicate with their device.
3. Content upload
When the consumer grants permission, it will then display a personalized message via a notification on their device. The alert may include text, audio, images, or video on products/services found at that location.
Proximity marketing devices
Local marketing used to be banners and physical signage. However, advancements have made tech more affordable for local businesses. Now, companies from small to large are deploying location tech in their marketing strategies.
As the industry grows, marketers search for new ways to capture and serve data based on location. Proximity marketing beacons may be the most popular of proximity technologies. Still, there is a host of tech to choose from. WiFi, NFC, and RFID are some other options, but they aren’t quite as effective as Bluetooth-enabled beacons.
Proximity marketing with Bluetooth Beacons
Bluetooth beacons are the leading proximity technology. Proximity Directory reports that 86% of active micro-location sensors are beacons. It’s easy to see why. Beacon transmitters and Bluetooth use low energy. This helps to keep them running efficiently for more extended periods.
There are two gold standards when it comes to beacon technology:
iBeacon was created and launched by Apple in 2013 and is popular among larger retail outlets. This software allows smartphone apps to receive beacon BLE (Bluetooth low energy) signals.
Google crafted Eddystone and introduced it in 2015. The open URL protocol first set the stage for BLE format and proximity messages. However, the most significant benefit of Eddystone signals is that smartphones can accept messaging with or without apps.
How to choose a proximity marketing beacon
Beacons have a unique ability to identify ambient context and contact consumers at their “zero moment of truth.”
Local marketing bridges the gap between offline and online consumer experiences. Because of this, it has become useful across all sectors. Stadiums, theme parks, local merchants, and department stores have all found unique use cases for proximity marketing.
But before you head out and buy the first beacon you see on the market, you want to make sure that it is the right choice for you. Look for proximity marketing companies like LiftIntent. We can help you launch a winning proximity advertising campaign that will help you earn real results.
Before you make a purchasing decision, keep these factors in mind:
1. The right aesthetic
Beacons are not a one-size-fits-all solution. Depending on your unique needs and architecture, you may need a different type of beacon.
Whether you manage a hotel or fast food establishment, you’ll want a beacon that blends in with your interior decor. Outdoor venues, such as theme parks and stadiums, may wish to consider a sturdy, all-weather option.
Many businesses require multiple beacons. In that case, you may be purchasing beacons from various manufacturers for your locational needs.
2. Number of beacons and where to deploy them
You’ve chosen a proximity marketing beacon that fits your needs, and now you need to decide where you will place them.
The placement of your beacons comes down to how it will work with your existing application. If you’d like to highlight a promotion on a single product, you may place the signal at the entry point of your store.
However, if your app is going to offer indoor-navigation, you will need to deploy a large number of beacons throughout your venue. Furthermore, they must be placed in the right proximity to give your customers a consistent experience.
3. Power arrangements
Just like any other technology, beacons need power to run.
You may place a USB-enabled beacon near a USB hub. However, if your beacon location is not near a power source, you may opt for a battery-powered option. Alternatively, you may choose a beacon powered via ambient electromagnetic-waves.
Battery-powered beacons have challenges that affect battery life. These challenges include accurate positions, advertising intervals, and broadcasting signal power.
Start by discussing these options with proximity marketing companies like LiftIntent. We can help you determine the best choice for your situation.
How do businesses use proximity marketing?
Proximity marketing beacons have influenced the way brands approach and interact with their customers. Proximity advertising may be the primary benefit, but proximity technologies apply for many use cases.
Traditional advertisement relies on legacy ads through television, radio, pamphlets, and billboards. They ultimately lack a sense of urgency and impulse-drive to try out a new product or avail an offer. Further, they cannot be micro-sliced via demographic or location.
By 2019, beacons are expected to reach 60 million customers, and more than 400 million beacons are to deploy by 2020.
– Tech Crunch/Media Post
As advertisements shift toward targeted, data-driven solutions, proximity advertising has hit the ground running. This is because proximity marketing beacons give marketers the tools to find, engage, and bring back or create new customers.
Sharing information to a specific location is one of the most common uses of beacons. Beacons make information readily available on consumer’s mobile devices. The use of beacons also saves money spent on printing and enhances the customer experience.
Advertisers use beacons to:
- Share information on products and brands.
- Raise awareness of promotions.
- Broadcast sales and discounts next to relevant products.
Interact and Engage
Consumers lean toward existential retailing. Thus, forming an enjoyable shopper experience is key to gaining and retaining customers. Proximity marketing creates the couture ads that consumers crave.
With proximity, brick and mortars can offer customization that was once cornered by big eCommerce brands like Walmart and Amazon. More personalization creates more positive consumer experiences. In turn, beacons lead to more loyalty, engagement, and sales.
78% of consumers say that relevant content raises purchase intent.
- Marketing Insider Group
Here are some exciting ways you can boost engagement with proximity marketing in your brand:
- Motivate shoppers to visit forgotten areas of your store.
- Gamify their experience with treasure hunts.
- Interact with consumers through fun quizzes.
- Transform a mannequin into a talking salesperson with relevant information.
The possibilities with proximity marketing are truly endless.
But that’s not all. Marketing leaders also aim to bridge the gap between social media and in-store proximity campaigns. This connection will make it easier for consumers to share their experience and smooth out retargeting campaigns to perfection.
We know that acquiring a new customer costs up to five times more than retaining an existing one. But did you know that raising customer retention by just 5% can boost your profits 25-95%?
75% of U.S. retailers have integrated beacon technology into their marketing strategies and seen a 9% increase in profits and a 175% ROI.
– Prox Report
Customer loyalty programs benefit your brand by keeping consumers involved and engaged. Everyone from local merchants and big brands are leveraging proximity tech to support brand loyalty. These methods include:
- Initiating a custom offer when patrons are near.
- Delivering precise geo-targeted offers that are time-sensitive.
- Receiving feedback on recent experiences.
- Rewarding loyal customers for spending time with your business.
Capturing offline data
As the power of Internet-connected devices increases, so do the mechanisms companies use to harness rich data.
Data-driven campaigns help businesses understand the shopping behavior of their customers. In turn, they can use this information to give consumers more of what they want.
By the end of 2018, retailers reached 3.5 million active beacons.
– Business Insider
Several big brands are already harnessing the power of localized marketing. Walmart, Target, and Macy’s have all introduced beacons in their stores with one goal in mind – to create better experiences and gather data for future campaigns.
Here is some of what proximity marketing beacons can do:
- Track the number of people entering a store.
- Create heat maps of popular zones within their stores.
- Gauge customer loyalty to their brand.
- Analyze what content drives consumers.
Help visitors navigate
GPS is amazing, and, for some people, necessary technology when navigating to or through an outdoor location. However, it doesn’t work the same when visitors enter a building.
Indoors is where proximity thrives. Beacon-powered applications leverage the triangulation method. This method allows beacons to pinpoint micro-specific locations of Bluetooth enabled devices.
Okay – in simple terms, beacons act like a GPS while you’re indoors. Easy, right?
Apps like Target have already implemented this technology. Now you can find a product, see its location on your in-store app, and navigate there, just like a GPS.
Navigating with proximity tech can help users move through large buildings. Multi-story malls, large museums, and airports are now a breeze. Beacons can also highlight essential locations. Some examples are bathrooms, refreshment zones, and art pieces.
The future of proximity marketing
Market Research Future predicts that the proximity marketing market will grow to 52 billion by 2023, with a 28% CAGR between 2017 and 2012.
This isn’t surprising, considering the momentum proximity marketing continues to gain as it moves past the trial stages. In the next year, we expect to see more brands choosing to add local advertising to their marketing campaigns.
As consumers continue to favor native ads, OTT, and connected TV, marketers look for ways to collect this data. In turn, brands seek to connect with their customers and enrich their experiences, ultimately resulting in a positive impact on their bottom line.
However, there are some kinks to work out in regard to proximity. One of the biggest struggles with the success of beacon technology is its requirements. First consumers need to download the right app, then enable Bluetooth on their device.
Despite this, proximity marketing isn’t going anywhere. We only expect the technology to improve from its current form. In the future, retailers may embrace machine learning devices and neural networks to get more connected. Analysts will also continue to track behavior and traffic data critical to creating experiential shopping destinations.
No matter how you look at it, proximity tech has a unique impact on the structure of the market. That’s because it capitalizes current tech to boost location and data-driven experiences from brand to consumer.
Proximity marketing companies
Proximity marketing is still somewhat young in the market. As smartphones advance, so does the need to reach consumers at the right place and the right time.
But you won’t have to wait until the future to harness the power of proximity marketing devices. The technology is already all around us, and brands are leveraging its capabilities here and now.
Launching a proximity advertising campaign is the first step to meeting your consumers where it means the most. Start by leveraging the expertise of expert proximity marketing companies – like LiftIntent.
At LiftIntent, we can help you set up, create, and track localized campaigns. If you want to learn more about how we can help you bring in more customers and boost your sales, call us.
We’d love to learn more about your unique needs, give you our media kit, and share our case studies with you.