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Is the iBeacon party over before it even starts?

beacon

In-store tracking is focus of upcoming FTC workshop

The rhetoric around geolocation data is quickly heating up on both sides, with leading marketers investing more in acquiring and leveraging this customer information at the same time that some sort of regulatory action looks increasingly like a possibility.

An upcoming Federal Trade Commission workshop on geolocation targeting is a reflection of the concern specifically around the growing practice of leveraging mobile to track in-store users via Bluetooth Low Energy technology such as Apple’s iBeacon, Wi-Fi and other solutions. Potentially adding more fuel to the fire is one privacy advocate’s allegations that some marketers are tracking in-store users in order to make stocking decisions based on income and/or race.

“Geolocation is integrated into this growing analysis of communities and neighborhoods that is made possible by geolocation,” said Jeffrey Chester, executive director of the Center for Digital Democracy, Washington.

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“In addition to the convenience of knowing what’s in a store, companies may decide to offer certain products that are more expensive to certain people, to discriminate against certain people because of their income or race,” he said.

“The growth of hyperlocal targeting needs to be investigated because of its potential harm as well as acknowledging its benefits. I think the business model is 'Let’s collect as much data as you can' and that is what the commission is going to try to pull the reins on.”

Growing concern
Smartphones enable users’ precise location to be determined, down to the longitude and latitude. Until recently, consumers and even brands had a fuzzy understanding of what the implications of this are.

This started to change last year as the number of allegations and revelations grew around how consumer data is being used.

There was Edward Snowden’s revelations about government tracking, a scandal that continues to unfold. For example, allegations this week suggest the NSA is using such data to find drone targets.

There was also an uproar when it was revealed that Nordstrom was tracking in-store shoppers when they accessed the retailer’s Wi-Fi, a practice the retailer quickly stopped.

FTC workshop
The FTC is holding a workshop on Feb. 19 to take a closer look at such geolocation tracking. Specifically, the workshop will focus on the practice of retailers and third parties tracking in-store shoppers from their mobile phones.

Such in-store tracking has been put forward as an important new area of mobile marketing, especially with the advent of Apple’s iBeacon and other similar technology. This is because these devices are relatively easy and inexpensive for retailers to install, enabling them to push out offers to shoppers based on the aisle they are in.

In addition to retailers, the technology is quickly catching on among sports leagues and concert organizers for use in outdoor venues where engaging with attendees had previously been a challenge.

However, some marketers are watching what is transpiring around geolocation data and are getting concerned.

“When we first started doing geolocation targeting with a lot of these retail brands, we weren’t getting a lot of questions about it,” said Monica Ho, vice president of marketing at xAd, New York. “I would say mid-2013, I think a lot of them started taking a step back and saying, wait a second, how does this actually work and what data are you collecting.

“I have had six or seven calls with the legal departments of these retailers to get them comfortable with the way that we were using geolocation data.”

Geolocation targeting
While there is concern around the use of in-store geolocation tracking, the use of geolocation for serving targeted ads is still on the fast track. For example, Pandora last week said it would up its investment in gathering and leverage location data to drive relevant experiences for users.

Typically, geolocation data for serving targeted ads on mobile uses aggregated data so it is not tied to a specific user.

When there is a one-to-one exchange, marketers are increasingly notifying users when they want to use their location data. For example, when loading the Google News app, it requests each time if it can use a consumer’s location.

Also, the latest mobile operating software typically enables users to change their device ID whenever they want whereas in the past, there was a persistent user ID.

“As in-store grows more and there are more devices in store collecting users’ IDs and collecting that very granular information, I think there might be some new regulation around that,” Ms. Ho said.

“In terms of general geolocation, as long as everybody abides by the self-regulatory principals, we are all in good shape,” she said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Legal/privacy, geolocating tracking, geolocation targeting, iBeacon, FTC, Jeffrey Chester, xAd, Monica Ho, Center for Digital Democracy, mobile marketing, mobile

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Comments on "Is the iBeacon party over before it even starts? "

  1. Ron Vassallo says:

    February 11, 2014 at 3:10pm

    Despite the hyperbole of the title, its a good title that raises an important issue in the use of Bluetooth LE. Nevertheless, most retailers are wisely incorporating opt-in prompts and presenting the value proposition before hammering consumers with messages. Given iBeacon's accessibility and affordability for small business owners, the real question is: when will Apple enable transactions? And then there's the second question: when will MM start writing the NFC post-mortem?