Still Place for optimism?

Yesterday we attended our fourth Place Conference, held in NYC a little further uptown than our first Place back in 2014. Back then the conference had a strong focus on all the latest mobile location and proximity technologies that were expected to revitalise retail. There was an air of optimism around the Bluetooth beacon and similar innovations which held much promise to deliver delightful, contextual, brick-and-mortar experiences for a broad consumer base increasingly expecting personalisation.

At the 2018 edition, it didn’t take long to realise that this optimism had not simply faded, but completely vanished. The first and only mention of a beacon did not occur until the fourth presentation: a panel entitled What Nobody Will Tell You about Location Data. And what did the panel tell us?

Baseline location data is a commodity now.

Indeed, that fact was affirmed in the previous presentations and those to come. The state of the art in location analytics and proximity marketing has become the acquisition, interpretation and application of baseline location data from mobile phones.

Wait, what’s baseline location data and how is it obtained from mobile phones?

Curiously enough, that subject was never directly addressed. But in short, the primary data source consists of a latitude/longitude paired with a device identifier, gathered from mobile devices under their terms of service. These data points are enriched by companies who probabilistically associate the identifier with a household, demographic (or more!), and the geocoordinates with addresses and/or an individual’s journey. This commodity is then applied to business decisions or to pushing the right ad to the right consumer at the right time and place.

At least that’s how it’s supposed to work. Thomas Walle of Unacast made the precision (pun intended) that data quality is not yet a commodity. This was affirmed by the chief data scientist of Outfront, a leading out-of-home (OOH) media owner with countless digital billboards, questioning the reliability of “polygon visits” as source data based on his experience with multiple vendors.

Only two hours into the conference, as the panel progressed, I was already distraught, painfully reminded of the above slide which we had presented at a similar conference two years previous. Entrenched was the “old way” of bombarding the consumer to drive a response, the innovation being smarter bombs homing in on fainter signals. The term “surveillance” entered the discourse and was not outright dismissed. Were we collectively comfortable with that?

But, it all turned around when the panel was followed by a presentation entitled The Future of Digital Identity: Countdown to 2020 in which Neil Sweeney of Freckle IoT promptly declared that

a data revolution is coming.

Calling into question the status quo, he argued that there is currently an inverted value proposition for the consumer, progressive government regulation (GDPR in Europe and soon CCPA in the US) is becoming law, and scandals such as Cambridge Analytica have unveiled the uncomfortable truth behind advertising business models. In short, don’t expect our suggestion to Facebook following last year’s Place Conference to become a priority anytime soon!

What Neil proposed was a complete reversal of the flow of information and the ownership of personal data. And with the Killi app, he invited the audience to take the first step right then and there, opting in to select specific pieces of personal information that they would like to share with brands in exchange for money.

It was as if our complementary slide from that previous conference had suddenly appeared! Here was the consumer “advertising” their intent to brands and businesses through their presence and the information they chose to share, expecting an appropriately personalised response in return.

Since reelyActive’s founding in 2012, we’ve championed this paradigm for the flow of information. Coincidentally, our most watched video, in which we present this paradigm by reversing the flow of information of a beacon, will tomorrow celebrate its fifth anniversary! It’s not difficult to imagine this implemented in the Killi app to facilitate real-time hyperlocal exchanges of information like we demonstrated with our own reelyApp.

Whether a micro-DMP like Killi or rather a Bank of Personal Data will eventually prove to be successful is of course up for debate, as few attendees seemed threatened by the imminence of a data revolution. Nonetheless — and reassuringly — most attendees seemed to agree that such a paradigm, which fosters transparency and inclusivity and moves the industry Beyond People-as-a-Product, is much closer to being the right model, even if most would argue it is not yet a realistic model. In any case, the technology is ready. The trillion-dollar question is whether the vendors will ready themselves to flip if and when that critical time comes?

Facebook, it’s time to “share” your view of the customer

At the 2017 Place Conference, on the Rx for Retail panel, Trace Johnson of Total Wine & More eloquently summarised his problem, one faced by so many modern retailers today:

“we need a unified view of our customer”

And while the panel concluded that there is no single vendor that can offer that solution, conference organiser Greg Sterling interjected:

“Facebook is the closest”

Indeed, Facebook, who also presented at the conference, have an unprecedented understanding of their 2 billion monthly active users, and already offer to their business customers arguably the best targeted advertising capability of any platform. And if the audience (or even Facebook themselves!) had any doubt about their presence in brick-and-mortar retail, these fresh stats hammered home the point:

Facebook in Stores

So what’s preventing Facebook from offering retailers a unified view of the customers that walk through their door — as they walk through the door? Not much we’d argue! In addition to having an established relationship with most retailers, they have both the digital view of the customer online and the physical presence of their mobile app in-store. From a technological perspective it’s entirely feasiBLE to connect the two!

Facebook User Identification

The above diagram illustrates how we see Facebook closing the loop. The missing link is essentially the Facebook app “advertising” a real-world cookie using Bluetooth Low Energy (BLE), and the infrastructure to relay back to Facebook the precise real-time location of this cookie, whenever it is detected. With this in place, Facebook could push the retailer not only a unified view of their customer, but one contextually enriched with the on-line and in-store journey. As a result:

Facebook owns the user.   The retailer owns the in-store experience.

It’s important to note that Facebook did try to roll out a beacon infrastructure in 2015 which, unsurprisingly, didn’t work out (another presenter at the conference, TouchTunes, lamented the impossible logistics of maintaining their fleet of tens of thousands of battery-powered beacons). The differences in the scenario we present are the following:

  • Internet-connected mains-powered BLE infrastructure solves this logistics nightmare
  • Facebook doesn’t need to own/manage this infrastructure

At reelyActive, we’ve been selling such infrastructure to small and large businesses for years, and we’re not alone. But the game-changer will be when BLE capabilities are added to smart lighting infrastructure — which is actually happening even faster than we expected!  In short:

infrastructure can no longer be considered a blocker

Facebook can enable — with clear user opt-in, of course — their mobile app to advertise a user identifier in the form of a 128-bit UUID (which is supported by both iOS and Android).

Facebook 128-bit UUID

Any infrastructure in range would detect these BLE packets, and software such as our Pareto SaaS could establish their provenance from the Facebook app from the Public ID. The software can then forward the UUID to Facebook’s API along with the precise location of the receiving infrastructure. Using the Private ID, only Facebook can then look up their user and push any relevant info to the retailer’s back-end, for them to deliver the final in-store experience.

That in-store experience is what brick-and-mortar retail is all about, and we were (again) reminded that 9 out of 10 purchases are still made in-store. But without a unified customer view, how can we expect our local retailers to optimise the experiences accompanying 90% of the purchases we make? Especially when, as Verve’s Walt Geer highlighted, an increasing number of consumers themselves already expect this and won’t hesitate to opt-in for the promise of personalised experiences!

Opt-in for personalisation

Four years ago, when our vision of the future helped us win World’s Best Startup, we wrote Facebook, you might “like” this. Today as that vision is becoming a reality, we might instead say Facebook, it’s time to “share” your view of the customer.   How could that not be good for business?

Proximity in its Place

The 2016 Place Conference brought together the brands, retailers, agencies and technology companies pushing the envelope of cross-platform proximity marketing, indoor experiences and location analytics. We feel that organiser Greg Sterling of The LSA, in his introduction, most eloquently summarised in two slides why local matters:

Digital vs. Local

While we spend an increasing amount of time online, we still spend the majority of our money locally, close to work and home. The following is a brief summary of our takeaways from the conference.

Still educating, still adopting

“How many people here have had a real-world beacon experience?”

In a room of a hundred, a mere handful of hands were raised. This hammered home the point that although proximity experiences currently receive all the attention, the reality is that three years after the launch of the iBeacon with iOS 7, and with over 8 million proximity sensors deployed globally today according to Proxbook, the concept is still in its infancy. Instead, it was the presentations on location analytics, a less-glamorous subject, which boasted tangible, measurable results.

Erin Kienast of OMD, who successfully ran such a campaign with McDonald’s, said she spends a lot of time educating local media agencies about the power of location, and how they can use the data. Our experience has been the same. Indeed, while the national agencies may have the edge in education, the local agencies still outweigh them in terms of volume. Education precedes adoption, and a few turnkey solutions certainly wouldn’t hurt either.

We’re not making it easy

“We’re making it really hard for the CMO today” said Pehr Luedtke of Vanassis. “How do the CMOs understand the crazy landscape of location tech?”

Greg Sterling affirmed, “technology companies add complexity beyond what a human operator can be expected to handle.” We know. As a technology company, we’re as guilty of that as any of our peers that were in the room, but we’re working hard to improve. Our approach has been to approach retailers within a partner ecosystem where we master the location technology and our partners individually master the experience, marketing communications, change management, analytics and such. Technology companies should leave end-user-interaction to the experts.

New channel, new offer

“You can’t push the same offer through a digital channel” said Jay Hawkinson of SIM Partners. “You need to make a compelling location-based offer.”

Indeed it doesn’t make sense to make all the effort to meet the customer where they are, only then to serve them up a generic offer. But it certainly does take additional consideration to create the most relevant offer, and marketers need to be prepared. In our retail deployment experience, the impact of even a modestly tailored offer versus a generic offer was orders of magnitude greater. But our partners still had to push to make it happen!

Location accuracy: who cares?

Google doesn’t. Aisle411 does.

Place 2016: Location Accuracy

One can argue that they’re both right. In the case of absolute location, the traditional latitude-longitude measurement, accuracy dictates granularity. And for Aisle411, 30cm is the right granularity. However, in the case of semantic location, championed by both Google and ourselves, all that really matters is what’s nearby to the user. In other words it’s simply relative.

A light bulb just went off

“How many advertisers does it take to change a [connected] LED light bulb?” joked Google’s Frank van Diggelen.

Place 2016: Connected Lighting

Both Philips and Acuity shed light (pun intended) on the fact that one thing is for sure indoors: we’re always near a light. Internet-connected LED lighting overcomes the three challenges faced by location technology:

  1. persistent power
  2. consistent connectivity
  3. necessity of infrastructure

The combination of smartphones and connected lighting promises accurate location via beacons, WiFi, computer vision, magnetics, inertial and visible light communication (VLC). Curiously excluded from the list, however, was Bluetooth as a real-time location system (RTLS), essentially beacons in reverse.

Are people beacons too?

If smartphones act as beacons (as many wearables already do), then connected lighting could identify and locate the people carrying them. We first demonstrated the concept three years ago, using our own connected sensor infrastructure. Last week, to celebrate that anniversary, we proclaimed that The Physical Web just got Personal.

“Can people be considered places? In other words, can a person’s smartphone act as a beacon?” we asked Chandu Thota, Director of Engineering at Google. The answer, as we expected, was no, that’s not how Google sees it. Thota confirmed that we were not alone in advancing applications where the smartphone “advertises” itself to its surroundings. But the company behind Android, Eddystone and The Physical Web (at least) currently sees the smartphone exclusively as a receiver of what is nearby to its user.

Is the industry abusively smartphone-centric?

The smartphone is an incredible innovation which has revolutionised how brands can interact with their customers. Nonetheless, it is easy to argue, as one attendee did, that imagining those customers walking through stores with their eyes glued to their smartphones is downright dangerous! Case in point, this video.

Place 2016: Smartphone-Centricity

What we’ve heard from brick-and-mortar retailers is that they want to emphasise the human experience of shopping, aided by the tools pioneered by online retailers. For us, the smartphone-centric approach is at odds with that vision, instead emphasising the digital experience within a physical context.

Our hope for the next Place Conference is to see case studies of CMO-friendly end-to-end solutions which deliver delightful experiences with tangible results all the while keeping the smartphone in the users pocket to the extent possible. See you there!