The challenge for the beacon provider industry has been to demonstrate really productive use cases. We’ve written a number of articles on this subject, starting in 2013, after the introduction of iBeacon

Now, Unacast, a very young company, has developed a new approach to enhancing the value of proximity marketing, the area dominated by beacons. We recently met and had an opportunity to speak with Unacast CEO, Thomas Walle, about the company’s strategy and offerings.

New Vision for Beacons

The concept behind Unacast is simple. It is that the real power of beacons and other devices that are gathering proximity data in the real world arises from the aggregation of that data. Walle states that, “Each proximity company has a tiny bit of the complete picture of the consumers; we can aggregate that data and make it very valuable to marketers.”

As Walle explains, “The data, as gathered, is simply not standardized or uniform. We clean, harmonize and structure it in our private cloud.” This aggregation and processing of the data creates a massive amount of new input that can be sold to and used by marketers. Beyond that, it can be combined with data gathered over the Internet about the same potential customers and their behavior online, to provide a more and more complete understanding of individual and group tastes and needs.

Executing on the Vision

To build the vision into an operating business, required gaining the confidence and cooperation of a large number of these dispersed beacon solution providers – the principal sources of the raw data. To date, Walle reports having gained 55 participating companies.

The vision also requires demonstrating the ability to turn the data into revenue-generating products. Here the company’s focus is on making this data, which is generated offline (as opposed to customer data gathered online), into part of an ever broader package of marketing information.

The company’s revenue is derived from sales of data to marketing organizations. Walle told us they do not offer consulting or contractual services.

An Example of How It’s Done

Unacast has published many examples of how its aggregated proximity data has proved useful to an array of product and marketing organizations. An interesting one involves a test done with Coca Cola.

Coke engaged in a promotion at a large movie theater in Norway, which engaged moviegoers through the app of leading Norwegian publisher VG. On entering the theater lobby, the consumer was offered a free coke. 24% of people who had VG’s app on their phone clicked on the offer; 50% of these then proceeded to get the free coke. A week later a new offer was made online to the moviegoers – a free ticket if they returned to the theater. 60% of the moviegoers clicked on this “retargeting” offer and 50% of them showed up at the theater a second time.

This is a multi-party undertaking that Unacast has put together. It involves:

a) Coke, the advertiser footing the bill

b) The venue owners, with beacons installed, in this case the theater

c) The use of a popular app, in this case that of publisher VG

d) A media platform, in this case Glimr, to store the data and help effectuate the retargeting offer. (Unacast has relationships with a number of media/data management platforms, including Oracle, Lotame and others.)

Walle explains that, “We did the heavy lifting in bringing all the parties together.” He states that, in any given situation, the data may be owned by a site owner or a brand, or, in some cases the proximity device provider. He states, “We provide revenue sharing back to the parties in the chain, such as the beacon providers and retailers or other venue owners.” Once more experience is gained, he envisions proximity companies offering these types of services as part of their package, when providing beacons.

Productizing Unacast’s Services

Unacast currently offers a number of products to advertisers and beacon companies.

uRetarget
Allows advertisers to re-target customers online, based on the customers’ behavior in stores, using information that was gathered from beacons or other proximity devices.

uMonetize
The company sells data collected by beacons.

uNetwork
Allows sharing of anonymous data collected from multiple beacon sources of providers who are part of Unacast’s network

Location Control
Lets a user see the info registered on beacons about them. Walle states that this is intended as a free service. It is designed to help protect user privacy and the user can opt out.

The company also started Proxbook, a directory of activity in the industry, which also performs surveys of industry growth. About 300 proximity solution providers worldwide participate in Proxbook. Proxbook plans to issue periodic reports on the growth and development of proximity marketing; the most recently issued report covers Q1 2016.

Company Progress – Google Eddystone, Privacy

The company, which started in 2014, raised $5 million in May 2016. They recently had 11 employees and plan to add 10 more as a result of the new financing.

Proxbook members had installed over 6 million proximity devices, 5 million being beacons, as of Q1 2016. (The non-beacon devices are almost entirely NFC devices.) Unacast points to a ABI report that there will be 8 million beacons installed worldwide by year end 2016, and a forecast that this number will grow to 400 million by 2020, about a 165% CAGR.

Walle ascribes the concept behind Unacast to work he and his partner did at the music sharing service Tidal. He says they were interested in collecting data about concert attendance by Tidal users to gain a more complete view of their music preferences and behavior. They realized that beacons at conference sites could be helpful. (Tidal was subsequently sold to rap artist Jay Z and has been reported recently to possibly be sold to Apple.)

While beacons have proliferated most rapidly in the U.S. and parts of Europe, Walle believes that Asia/Pac will start to catch up in beacons and proximity marketing in the next 18 months.

He regards the advent of Google’s Eddystone as a key development. Walle points out that Google’s Eddystone beacon can bypass the need for an app, since it has a URL feature that allows it to transmit to a user who does not have a specific app. This can potentially greatly expand the usefulness of beacons. A Q1 2016 Proxbook survey found that while 90% of beacon providers support iBeacon (the percentage has been dropping slightly), 45%, and growing, support Eddystone after less than one year of availability.

It appears to us that it would be possible to combine proximity-based data and online data about a consumer’s behavior to gain detailed pictures of individuals, which of course raises privacy concerns. Walle emphasizes the efforts the company has made to protect consumer privacy. He explains that Norway, where the company started has some of the strongest privacy laws in the world. It is notable that two of the company’s listed advisers are privacy lawyers.

Our Take

If millions of devices, including beacons, are going to be gathering data about consumers (with opt-in of course), the question facing the marketing industry is how to get consumer engagement at the venue and how to make the data useful once it is collected.

Early attempts at using beacons for marketing purposes have been fairly limited, probably by at least two factors. First, there is the app that the consumer must opt into to enable collection of their data. The seemingly natural first choice was the retailers’ apps. But, in truth, how many consumers actually use any given retailer’s app? The answer, broadly speaking is not many.

The second limiting factor was in the area of the benefit to the consumer. Early efforts focused on notifications and immediate offers, e.g., a discount on an item the consumer might be looking to buy.

Note what Unacast may be accomplishing in this regard, even using the single example of the theater test done with Coke:

1. It gave Coke, a universal brand, a means of interacting with individual consumers and gaining a better understanding of part of the consumer base. We agree with Walle’s co-founder, Kjartan Slette, who stated, “That’s the true value of proximity; it’s getting the brand closer to that audience.”

2. It showed what could be done by linking to an already-popular publisher’s app; and it provided added value for the publisher’s app.

3. It showed that compelling benefits can be offered to consumers through a multi-step marketing process, as it afforded an incentive for consumers to go back to the theater.

This area – of gathering, analyzing, utilizing and linking proximity data – is in its absolute infancy. We regard Unacast as a highly interesting company that is looking ahead and willing to face the challenges of building partnerships and products to achieve more robust marketing solutions.

Visit their website: www.unacast.com