Facebook announced it would begin testing Place Tips in coming weeks after installing the low-cost, low-energy transmitters at eight Manhattan shops. Up to now, beacons have mainly been used to send promotions and ads to people in and near stores.
Mobile marketers will have to think of new ways to interact with a target customer who may be on the move or in a rush, said Neil Mawston, executive director with the global wireless practice of Strategy Analytics. For example, pushing a 10 percent discount voucher to a Walmart shopper over a Bluetooth beacon must be fast and simple to understand.
Place Tips will provide information taken from the locations Facebook pages, above the news feeds on users smartphones.
The service is free for businesses. Facebook could one day sell ads tied to the information, giving it another avenue for making ads more personal.
Place Tips promotion.
Facebook installed beacons at eight shops, including the Strand Book Store, The Burger Joint at Le Parker Meridien Hotel and Dominique Ansel Bakery, inventor of the cronut.
The service also involves landmarks such as the Statue of Liberty, Times Square and Brooklyn Bridge. Due to the larger size of those areas, Facebook will use GPS signals, cellphone towers and Wi-Fi signals, but not beacons, to locate users.
Its going to be huge for Facebook if executed well, said Neil Shah, research director with Counterpoint Research. Facebook has the ability to connect million of consumers to retailers and vice versa and build a strong foundation for highly targeted and effective interactive mobile marketing.
This could be the high-scale opportunity to bridge digital and physical marketing.
Facebooks move could lead to a new form of interactive marketing. One scenario would be campaigns that connect and promote Facebook business pages as soon as a consumer enters a business's vicinity, interacts with a product or leaves instant reviews, feedback or redeemable offers.
Adding hyperlocal data to the targeting mix for Facebook mobile ads, makes this the solution to beat in the publishing environment, said Matt Ramerman, president and co-founder of Vehicle.
The implications of Facebooks move for mobile marketing are game-changing.
As Facebook scales their beacon data this will add new targeting and personalization in mobile marketing, said Evan Schwartz, CEO of Action X. Brands will be able to target based on physical world interactions and the data can also be used for attribution, measuring store visitation.
Up to now, the most prominent leveraging of beacons in retail was Macys partnering with Shopkick. Facebooks comparably vast size makes the beacon proposition all the more provocative.
As we know from their recent earnings, Facebook has over half a billion users accessing their platform exclusively from their mobile device, Mr. Schwartz said. As Facebook implements beacons around the world, the scale of the audience that can be reached with beacon-enhanced marketing will dwarf anything else in the market.
Facebook, however, will face challenges in making its beacon initiative a success.
The primary challenge for Facebook will be relevance.
Customers are already inundated with mobile messages and push notifications from lots of companies on a daily basis, so the relevance of content will be paramount, said Neil Stern, senior partner with McMillan Doolittle. Whether customers receive messages while standing in an aisle at Macys or upon walking into store, no one cares unless the communication is personally meaningful.
The impact of Facebooks move toward beacons will hinge upon the platforms effectiveness in working alongside retailers to create meaningful communications for customers, he said. Obviously, the opportunity for Facebook is achieving what everybody has been looking at them to accomplish for years: the continued monetization of their user base.
At the same time, Facebooks users do not necessarily want to be monetized, so it will be incumbent upon Facebook to remain relevant to prevent migration to other social platforms.
Eliminating the fear of privacy invasion is another challenge.
With beacons, Facebook will now know where their users location is at any given moment, Mr. Ramerman said. That runs the risk of becoming too Orwellian and feeling invasive.
Bringing beacons into the mainstream.
Finding the balance between offer relevance and what may feel as an invasion of privacy, will be key to enormous success or consumer backlash, he said.
Beacon technology is still in its infancy so both marketers and consumers need to fully grasp how it works and the potential, Mr. Schwartz said. The challenge is delivering a great customer experience with a mix of great content, recommendations, and marketing. This cannot be about pushing couponsthis is about delivering value to the consumer.
Michael Barris is staff reporter on Mobile Marketer, New York