Commentary
Beaconing & the Retailer Programmatic Ad Exchange
- by Chuck Martin , Staff Writer, October 20, 2014
Shoppers are about to start receiving highly targeted ads directly
from brands while in stores, near where specific products are sold.
This programmatic ad buying is coming to retailers, courtesy of beacons.
Swirl Networks, the ad network company whose beacon platform is used by Timberland, Lord & Taylor and Kenneth Cole, among others, just introduced the Swirl Ad Exchange (SWx) for proximity-based, in-store mobile marketing.
The idea is essentially to create a private ad exchange controlled by the retailer, Hilmi Ozguc, founder and CEO of Boston-based Swirl told me.
A brand would have a dashboard where they could see retailers’ departments in which their products are sold. They then could request to run ads for shoppers within a certain distance of those products, determined by beacons in those departments.
For example, at Lord & Taylor in Boston, where I regularly test the in-store beaconing, I already have received full-screen mobile ads from Michael Kors upon entering the department carrying handbags.
The retailer essentially becomes the publisher, selling advertising space to brands to interact with highly coveted shoppers while near their products. Once the retailer approves a brand for a department, the advertising process becomes totally automated and the retailer sees a potential new revenue stream.
It also is in real time. And this is where it can get interesting.
Since multiple brands may be approved for certain departments, this can provide an opportunity for real-time bidding for those departments, a future plan of the ad exchange, according to Ozguc.
To reach these opted-in shoppers, the cost per view will be around 50 cents to $1.50, Ozguc estimates.
The retailer also needs a ‘co-publisher,’ the provider of the app in which the consumer interacts. In the case of Lord & Taylor, the app SnipSnap is used, though a retailer can determine which app is activated by the beacon, since in most cases there ultimately will be a number of apps equipped to be beacon-triggered.
However, from the consumer’s viewpoint, it appears that the messaging is coming directly from the retailer.
At scale, the ad exchange could provide a brand with opportunities for flash sales based on inventory, offers by region, store category or department as well as automatic programming for reaching a pre-determined number of mobile shoppers within a certain timeframe.
Beaconing is moving into the advertising world in a big way. More importantly, it’s moving ever-so-closely to when and where a consumer buys.
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Check out the MediaPost conference on beacons, being held Nov. 3 in New York (IoT: Beacons).
Chuck Martin is Editor of the AI & IoT Daily at MediaPost and writes the daily Connected Thinking column. He is a NY Times Business bestselling author and his latest book is “Digital Transformation 3.0” (The New Business-to-Consumer Connections of The Internet of Things.) He is CEO of Net Future Institute and a frequent keynote speaker internationally. Follow him on Twitter @chuckmartin and contact him at Chuck@MediaPost.com.
Somebody please create an app that steers customers clear of retailers beaming unwanted, un-asked-for advertising at them.
That would be some app, Doc. In this case, the only people getting the ads would be those who actually agreed in advance to see them.
The people seeing the ads would ideally be self-qualified leads, rather than targets of guesswork who don't regard their phones as billboards.
Exactly right, Doc. Still to be determined is how many will do this and what messaging will be most effective. Some of the beaconing provides services rather than ads, which holds great promise.
“To reach these opted-in shoppers, the cost per view will be around 50 cents to $1.50, Ozguc estimates.”
That is a $500-$1500 CPM on a mobile banner ad… seems a bit aggressive, but perhaps they will get some buyers for that.
Chuck, take a look at intentcasting, where the customer does the signaling. Here's a list of developers already working on it:. All are VRM (Vendor Relationship Management ) developers, working on the customer's side, rather than the seller's — but producing fully qualified leads, and reducing the amount of guesswork on the seller's side.
Well, it won't let me put in links. Still, not hard to look the subjects up.
Yes, Brian, translated into CPM would be a bit on the high side, as an understatement. However, the perceived value is that the potential buyer is in buying mode (in a store) and near a product, so the value is the potential (and measurable) influence point on that specific purchase.
Thanks Doc, most interesting (and the links came through in my notification email, so thanks for those.) A leading edge concept.
http://cyber.law.harvard.edu/projectvrm/VRM_Development_Work
http://en.wikipedia.org/wiki/Vendor_relationship_management
And I got your links to appear Doc, so thanks for sending.