Beacon Networks & Your Beacon Strategy: Pros & Cons

Beacons continue to make waves in the mobile space this holiday season. According to a recent study by Swirl, a mobile marketing company, 73% of consumers reported to have agreed that they are more likely to purchase from a store that sends beacon-triggered content and offers. Contrary to common public opinion that most consumers consider beacons to be creepy primarily due to privacy and security concerns, a recent Placecast report revealed that 52% of U.S. consumers know what beacons are and find it to be a very appealing technology.

In fact beacons have been touted as a ‘consumer-friendly’ technology for the fact that they don’t collect consumer data, but instead send brands information on consumer behavior, their movements and purchase history. With 61% of consumers having agreed that they are more likely to do their holiday shopping at stores that deliver mobile content and offers, beacon marketing is all set to go ahead with full throttle this holiday season.

Unaware of how to launch their own beacon campaigns, a number of brands are now turning to beacon ad networks. Of recent there has been a lot of debate about whether such networks will destroy a developing industry. In this post, we will talk about the pros and cons of getting started with beacons using beacon ad networks.

[Tweet “Are beacon networks the best way to kickstart your beacon strategy?”]

Pros

1. Removes the need to convince consumers to download the brand’s app

When it comes to leveraging beacons, one of the biggest challenges faced by brands is getting consumers to download the proprietary app. This is the one crucial pain point that gives Samsung’s Proximity platform a cutting edge over Apple’s iBeacon, by cutting out the need for a brand to have its own app to detect beacons. The platform works at a much deeper level by providing an uber-application, Proximity Service app that sits at the device layer and helps detect a shared registry of beacons and then pushes messages through a shared service.

Besides this solution by Samsung, few brands are fighting this barrier by opting for apps that consumers already use and these apps are what we call ‘beacon networks’. According to the latest data from comScore’s Mobile Metrix study, inMarket, a beacon platform, reached around 31.5 million of unique monthly visits, which means the platform is already reaching 18% of all U.S mobile shoppers through existing apps that support the platform. This represents a significant percent of U.S consumers, when compared to the 20 million users on one of the most popular retail apps such as Walmart and 4 million monthly users on other apps such as Target, Walgreens etc.

[Tweet ” How beacon networks can cause brands to lose out on loyal customers”]

2. Removes the need for brands to struggle their way through purchasing the right beacon hardware

Although beacons are fast gaining momentum, a number of businesses are still struggling to handle challenges related to purchasing the right beacon hardware, deploying them and integrating beacons to their mobile strategy. From our experience of having interacted with clients across verticals, the first and the most important step towards kickstarting your beacon strategy is deciding on the right kind of beacon. This of course depends on a number of factors such as power requirements, whether they will be deployed indoors or outdoors and more.

But with beacon networks, brands can easily cut their way through that. Mainly because existing apps that support the platform automatically work in stores that have deployed hardware supporting the platform. Further, this gives brands the opportunity to advertise in stores where they sell products but might not have the ability to deploy beacons in.

Cons

[Tweet “How beacon networks could destroy a developing industry”]

1. Provides for little more than blanket marketing

While businesses across various verticals are busy leveraging beacons to bridge the offline and online worlds, it’s crucial that they understand that by merely using beacons for marketing notifications, they are contributing to a bad user experience. According to a recent inMarket study, too many irrelevant push notifications nudged consumers to stop using an app or uninstall the app altogether. Thus, with every other push notification that is delivered per store visit, marketers risk a whopping 313% drop in app usage. Most beacon networks merely allow brands to push notifications to users, without being able keep a check on the relevancy of the content. Thus, chances are that such brands are already bombarding their users with unnecessary notifications.

For beacons to reach their full potential, brands should be able to convince consumers that there is great value in engaging with the brand’s messages.This can be done by crafting messages and notifications based on a deeper understanding of consumers’ behavior, demographics, location and actions such as purchase history, app usage etc.

For example, brands can utilize such insights to enhance their customer loyalty programs and give consumers relevant customized offers that are nearly impossible to ignore. This technique of rewarding consumers for staying loyal to your brand will help brands drive in more revenue, given that 61% of brands are reported to drive more than half of their revenue from repeat customers, rather than the new ones.

2. The ownership of content lies in the hands of beacon network

Though, beacon networks provide brands with an easier and convenient option of trying out beacons, to gain the most out of your beacon strategy you should be able to engage your consumers better with relevant, personalized content. But when it comes to beacon ad networks, the ownership of content and experience lies in the hands of the network and not the brand. This way the brand loses out on the chance to personalize content, to learn from their consumers’ behavior and use such insights to strengthen their sales. Moreover, there are high chances that beacon networks which are primarily interested in impressions and not in long term value-add to consumers may spam your consumers with irrelevant messages.

[Tweet “With beacon networks brands lose out on the chance to gain insights from consumer behavior”]

So, what’s the best way ahead?

Once you have tried out beacons and figured out how to make them work for your brand, it is best to have your own beacon-enabled app as it gives you full ownership of how you market, sell and manage your customers, offering them a consistent experience.

If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help!