Sonic Notify provides a proximity marketing (e.g., in-store) platform, which incorporates beacons, Bluetooth and audio signaling, and a content management system (CMS) in the cloud. We spoke with CEO Aaaron Mittman about Sonic Notify and proximity marketing.

Mittman declares that, “There is an enormous value in added location accuracy, especially indoors.” He analogizes the indoor element to the concept of the “last mile” in telecom and points out that GPS only goes so far in pinpointing a person.

Sonic Notify gained a good deal of publicity from early uses of its audio signaling technology in high visibility contexts, such as fashion shows, concerts and the like, however, Mittman states they are now very focused on retailing.

He explains that retailers “want control of the consumer in their store with their app.” Beacons can be programmed to block out conflicting apps (e.g., for competitor locations.)

For retailing, the business model involves multiple parties: the user, the retailer, an app provider, and perhaps a carrier.

While the Sonic Notify service includes the beacons, the company has added a number of crucial elements. These include a security layer and the company’s CMS. The security layer determines who has access. The beacon sends a signal to the CMS, which sends back content or which triggers an action. In the process considerable information can be gathered about the customer and their movement through the venue.

The company also offers audio watermarking. This involves the ability to send a signal embedded in an audio transmission – the signal itself is inaudible to the human ear. The company started using this technology about three years ago when Bluetooth Low Energy (BLE) was not common in smartphones (although the phones had microphones.) In 2013 it received an initial patent related to its audio watermarking technology.

They continue to use it even though they also offer BLE, which is increasingly incorporated into new phones. Mittman estimates that about 75% of iPhones in use in the U.S. today, and 12% of Android phones, have BLE capability, but that only about 20% of users have the capability turned on typically. With the audio capability Sonic Notify can reach 90% or more of the average in-store audience.

Sonic Notify states that it has 24 customers who provide recurring revenue. It includes the Golden State Warriors, Rouse Properties (malls) and Red Hawk Casino a casino (using it for their hospitality personnel.) It is currently in trials with a number of retailers, who are its main target customer base for the future.

Its business strategy is based on a SaaS (software as a service) model, in which the beacons are provided at cost and the company capitalizes on its CMS, which controls the service and can collect abundant data about customer behavior, which can become a source of increasing value.

The CMS is hosted in Amazon’s AWS cloud platform. The CMS has three primary functions: 1) It tracks user activity levels – where people are, their movement in the venue; 2) It puts out content for their use; and 3) It provides analytics – e.g., is the service obtrusive; are customers turning off the apps? Mittman notes that there needs to be careful frequency capping of messages, so, for example, a customer doesn’t receive a repeat message every time they pass a given beacon.

The CMS can accumulate a good deal of information about users and can employ loyalty information in offers it conveys to them.

While focusing on retailers, Sonic Notify also sees potential customers or partners among other categories of companies including: Other physical location providers such as sports teams, other venues such as airports and malls, as well as outdoor signage and companies that service retailers with technology installation and maintenance.

As with many mobile cloud applications and services, the benefits of proximity marketing are fairly intuitively clear. The challenge for the company and its potential retail customer base is understanding exactly how to use the technology and define the specific benefits of applications. As Mittman states, “We only talk use cases in our proposals.”