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What is Proximity Marketing?

In the next few minutes, I'm gonna teach you everything that you need to know to get started with proximity marketing. Let's do it.

 

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VIDEO NOTES | location based marketing series

 

What is proximity marketing?

Well, basically, it's a form of location-based marketing. We’ve covered this in previous videos before when we spoke about geo-fencing and using different technologies to locate customers when they show up for you in the physical world.

But proximity marketing is a little bit different to geo-fencing in that it is more contextual, it's more granular, and you can understand customers usually down to an accuracy of just a few meters or less.

When customers are near that product, or they’ve just walked in the door, you can do something with this information. Maybe you want to survey them when they leave.

Or maybe you want to highlight products in the store. Hopefully based on segmentation data as well. You're showing people that are interested in certain products that are also physically near them.

This technology helps us to get very specific, rather than just using a geo-fence, to let people know that you want to bring them into the store or to promote an offer when they're in the general area.

This is about going from macro right down to the micro. You're very sure that they are beside that product, piece of media, or an object.

And that's when we can use and harness the power of things like Bluetooth RFID, and NFC, and some other things we're going to speak about later in this episode to bring people in and engage them based on these very granular zones within your store, within your restaurant, within your casino, your hotel, whatever it might be.

And this engagement is usually done, so we have these sensors, QR codes, RFID chips and beacons that we have in the real world to help us with this proximity marketing.

They’re kind of like the lighthouses that are shining and sending signals out into the world. The chips are the mobile devices whether it's a smartphone, maybe a tablet or maybe even a wearable device and they listen to these signals in the case of beacons, or in some cases need to be tapped for some of the other proximity marketing techniques that use NFC or RFID.

But usually you have the smartphone, the tablet, or a wearable that is needed to perform some kind of engagement to see these sensors to be tapped against them to then link you to a piece of relevant content that sends you an in-app message, a push notification, or some other form of interaction to give you that virtual tap on the shoulder and say,

"Hey! Over here, we have something that you might be interested in."

That's a little bit about what it is and how it works and the fact that you do need some devices and an app, of course, on the device itself.

On certain devices, on Android operating based systems, you can, use NFC, you can link people directly to web URLs, and of course through QR code apps, that can link people to places with beacons.

You're going to need an app unless you're using Eddystone.

There's some interesting things you can do. We'll be covering that off in other episodes and we do have a video already on Eddystone from, I think, about nine months ago if you're interested. Go back and have a quick look.

But, you know, in general, proximity marketing today, in 2016 and beyond, we're talking about these Bluetooth beacons essentially.

Let me just give you a quick evolution of proximity marketing and where this has come from.

Bluetooth 3.0

As you know, Bluetooth is a very familiar technology. Bluetooth 3.0 is...we're actually at 4.0 now. Bluetooth Smart or Bluetooth Low Energy as it's sometimes referred to. Bluetooth 4.0 is where we are now and where we were before was Bluetooth 3.0. And this was basically a technology that was developed to allow the wireless transfer of content and information between two mobile devices.

Maybe you wanted to send a picture. Maybe you wanted to pair with a Bluetooth speaker. You wanted to play music or a car stereo. You wanted to make phone calls and this technology, Bluetooth 3.0, is where this came from and, in essence, what it was used for.

Of course, it was very rigorous...it places huge demands on battery and often having Bluetooth on and having it paired with your headset or playing music, would really wear down the battery on your feature phone or indeed your smartphone as well.

We've come leaps and bounds since the introduction of Bluetooth 3.0 to 4.0 where we can now listen for Bluetooth signals with very low power consumption. And these devices themselves, such as beacons, can run on a battery for many years and send out a very low energy signal out into the world. They can do this every second, every five seconds, whatever it is, and can continue on sending out that Bluetooth signal with a very small amount of battery required which is incredible that we've moved so far on.

That's one of the things that we need to move past, is that consumers are still a little bit concerned about keeping their Bluetooth on because they think in terms of Bluetooth 3.0. We, as marketers, as mobile app developers, we have a little bit of work to do in educating the market and moving things on. That's Bluetooth 3.0.

Wi-Fi

We have Wi-Fi, of course, as well, which is being used still today to locate customers. Now, it's not really about engaging customers, it's more...you see it used a lot in retail analytics so we know what devices have been in the area and we know what devices are returning to that area.

Apple are making this a little bit more complicated with the latest releases of their software, meaning that the mobile phone IDs are rotated and it can be a little bit more difficult. Again, we see this kind of falling away and it was never really a way of doing proximity marketing, it's more location targeting. But I just wanted to bring it up today so we can discuss it, it's more from an analytic standpoint.

QR codes.

Of course, we have QR codes, or Quick Response codes, and these don't do anything by themselves, they're just like a sticker that you print out and put on a product or, you know, some signage at an object or product in the store that needs to be scanned.

The user has to see this QR code with their own eyes, it's not sending any signal out into the world. They need to download an app on most devices and then scan this quick response code to then be linked to a piece of content in the virtual world on their device.

It seems like a very antiquated method and I probably stay away from using QR codes in your campaigns. It is similar in ways to an NFC tap, because you have to bring out your camera and scan the code. With NFC, you have to tap your phone right off the chip. Right? It's very, very proximal. Beacons, again, might be several meters. QR code, it’s very close, NFC code, very close as well.

That's QR code you simply scan it and you get a piece of content. Again, these were all the rage a couple of years back. I haven't seen a QR code in a while. You guys might not want do this with your latest campaigns.

Consider things like beacons, maybe NFC.

Geofencing.

Geo-fencing, while not strictly proximity marketing, and I will be covering geo-fencing in an episode coming up very soon, is a technology that uses ambient Wi-Fi signals and cell towers to understand when customers show up for you in the world.

It is a macro location technology usually. Some companies like ours, Pulsate, have the ability to go down to like 15 meters of accuracy and even lower in some cases indoors which is incredible, but generally, Geo-fencing is, you know, maybe 50 meters or 100 meters as a general vicinity around your location and you're using this to bring passers-by into your store and increase your footfall or foot traffic.

Not really proximity marketing, it's the macro. Today, we're talking about the micro location, a few meters of accuracy, or maybe even a few centimeters of accuracy if we're talking about using NFC and RFID. That's geo-fencing. Not really proximity, but worth...like along with Wi-Fi, but worth bringing it up and discussing it so you know what the differences are.

NFC.

Then we have NFC or Near Field Communication. Of course, most Android devices are equipped with NFC chips and can scan these codes. Basically, what you can do, or these sensors rather, you can embed these sensors which are all RFID based, in products, in places, at sites where you've deployed media, and you can basically prompt the user to tap their phone right off the NFC chip.

“Near” being the operative word in Near Field Communication, means that it has to be pretty damn near. You're talking, it needs to be right on top of the sensor or maybe, you know, an inch or two away. There is some exceptions to this rule, but that's generally the way it is deployed.

Since the introduction of the iPhone 6, Apple do have an NFC sensor, but this is actually locked down and Apple are the only operators that can actually use this inside their own device. They have not made the APIs available for other developers.

Really, if you're deploying NFC as a proximity marketing technology, it's only gonna work for now on Android devices. We look forward to seeing Apple release that, but we won't hold our breath on that one.

Bluetooth Beacons.

I've spoken already about moving from Bluetooth 3.0 to where we are today with Bluetooth 4.0, and beacons are really, as we've seen from their introduction in late 2012 all the way up to now, have been probably the preferred method of doing proximity marketing. They are very cheap and very accurate, and these beacons are powered by battery companies like Kontakt and Estimote and Radius Networks.

You can deploy them with a single coin battery lasting, in some cases, for years and can locate customers. You can turn the beacon up to 70 meters. You can dial it all the way back down to two meters. You have a lot of flexibility. You can stick them anywhere. You don't have to place them at power sites, and users don't have to tap their phone right off it. You can adjust it to do different things.

Bluetooth beacons, they essentially send their signal, as I've already mentioned, like a lighthouse out into the world and you need an app installed on a mobile device that's opted in for beacons that then sees the lighthouse and can then tell a server,

"Hey! I have this user here at this beacon." And then maybe the server says, “Send this push notification and show this piece of relevant content.”

A lot of flexibility with Bluetooth.

And that's it for today. A quick introduction to proximity marketing. I hope you've enjoyed it. If you have any questions, as always, you can send me a tweet. I'll leave my handle below, or you can leave a comment below the video. When you do, you inspire the whole community. I'm Patrick Leddy, see you guys next time.

Take care.