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BEACON TECHNOLOGY OVERVIEW

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Here are my predictions about the beacon effect:

• Beacons transform the real world into a digital channel
• It’s relatively safe since there are multiple steps required for end-users to activate beacon communications
• Consumers expect feature-rich digital experiences in the physical world
• A decrease in semiconductor costs, new mandates in marketing, and consumer adoption will fuel the adoption of beacons usage
• By 2016, beacons will be free to retailers, museums, arenas
• The profit center for beacon companies will be software, analytics, insights and consulting services
• Consumers are “warming” to the idea of trading data for enhanced experiences
• Beacons are low cost and low maintenance, as a result there will be more than 4M devices in use by end of 2018
• Beacon-delivered advertising will generate significant activity in the next 18 months
• Beacon-generated ad space will be widely available via RTB and generate $500M-plus by 2018
• Mobile phone plans will be subsidized by advertising and supported by beacon data

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BEACON TECHNOLOGY OVERVIEW

  1. 1. Overview & Marketplace Prepared by: Donnovan Andrews | donnovan@rethinkmedia.com Beacon Technology Opportunity @donnovana
  2. 2. The Next Tech Revolution: The Internet of Things Smartphones and the mobile Internet were growth catalysts for consumer activity. The universal integration of semiconductors, new forms of connectivity, and data collecting/analytics will propel the Internet of Things into the wider economy.
  3. 3. The Internet of Things: 3 Key Drivers Semiconductor & Tech Improvement • Price reduction and standardization of key hardware and software components Corporate Strategy • Integration of data collecting/analytics in consumer electronics and physical outlets Consumer Opt-In • Consumer acceptance of data gathering and willingness to trade data for customization
  4. 4. The Internet of Things: 6 Main Layers * Hardware: 1) Devices that collect data 2) Devices that transmit data Software: 3) Data storage 4) Analytics End-users: 5) Integrated applications 6) Acceptance and trust *Framework is part Morgan Stanley and part Rethink Media
  5. 5. Introduction This presentation delivers insights into a specific aspect of the Internet of Things that will deliver significant disruption and enhancements to the physical world via Beacon technology. Beacons help to guide customers/users/navigators to particular destinations, as well as transmit messages based on proximity.
  6. 6. Key Points about Beacons • Beacons transform the real world into a digital channel • What the cookie is for online applications/advertising, the beacon is for the real world • Safety: there are multiple steps required for end-users to activate beacon communications • Consumers expect feature-rich digital experiences in the physical world • A decrease in semiconductor costs, new mandates in marketing, and increased consumer adoption, will fuel beacons usage • By 2016, beacons will be free to retailers, museums, and arenas • The profit center for beacon firms will be software, analytics, insights and consulting services • Consumers are “warming” to the idea of trading data for enhanced experiences • Beacons are low cost/low maintenance: there will be 4M-plus devices in use by the end of 2018 • Beacon-delivered advertising will generate significant activity in the next 18 months • Beacon-generated ad space will be widely available via RTB, producing $500M-plus by 2018 • Mobile phone plans will be subsidized by advertising and supported by beacon data
  7. 7. Bluetooth LE* devices transmit small packets of data … What Do Beacons Do? … Which wake up an application on your mobile device The application triggers delivery of content, coupons, offers and info *Bluetooth Low Energy (BTLE)
  8. 8. How Beacons Work • A beacon is a small, low-powered piece of hardware emitting Bluetooth Low Energy (BTLE or BLE) signals to nearby smartphones and tablets • The beacon signal is a radio wave; it’s not limited by walls or doors • The BLE emission can awaken apps on smartphones (and other beacon-ready devices) within 150 – 200 feet • This allows for location-based/proximity messaging – delivered via mobile payments, loyalty programs, coupons and content apps • More beacon advantages: it’s cheap and each unit has a 2 – 5 year battery life
  9. 9. BTLE is: • A new radio/protocol stack, enabling the Internet of Things • Designed to be low cost and easy to implement • Good at small, discrete data transfers • Able to trigger data with/at local events What is BTLE?
  10. 10. Proximity vs. Location • GPS provides location data – accurate within 30 feet • Beacons provide insight and messaging based on proximity data • Proximity data is based on how close you are to a specific physical location/set point immediate near far receiver transmitter transmitter transmitter
  11. 11. Behind the Curtain 1 3 2 4 Beacon BLE Transmission App - Send/receive server data - Display push info - Controls for user interaction Server - Traces apps - Sends/receives app data - Checks beacon database - Checks content database - Pushes info to smartphones Content Database
  12. 12. iBeacons • Apple hasn’t manufactured a stand-alone beacon device yet; it may not need to • Apple has built beacon technology into its devices and mobile operating systems • Apple reported its devices (from iPhone 4S and iPad 3rd gen forward), if running iOS 7, can become active iBeacons • This gives Apple a significant advantage: 200 million iPhones and iPads are ready to send/receive iBeacon signals • A small business owner can enable an iPad to transmit notifications to iPhone users who enter her/his storefront
  13. 13. Beacons for Android • All Android devices running the Jelly Bean 4.3 OS are BLE compatible • Jelly Bean 4.3 devices may only be used as beacon receivers • Google has yet to produce a standalone beacon product for Android devices • Androids must have an app running in the background to detect beacons
  14. 14. Who is in the Lead? Devices Ready Available on … 96% • iPhone 4S or later • iPad3 or later • Any iPad Mini • iPod Touch 5th generation or later • Macs (equipped with at least OS X 10.9 Mavericks): mid-2011 MacBook Air, Mac Mini, mid-2012 MacBook Pros 29% Devices Ready • Samsung Galaxy S3, S4, S5, S4 Mini • Samsung Galaxy Note 2/3 • Moto G • HTC One • HTC Butterfly (aka Droid DNA) • Google/LG Nexus 7 (2013 version), Nexus 4, Nexus 5
  15. 15. In-Store Analytics • Beacons deliver approximate data about when users enter and exit/linger in an area • Beacons gather and provide insights about different levels of interactions – based on customer proximity and beacon placement • Retailers will be able to better identify customers/new and repeat visitors
  16. 16. What Kind Of Data Is Transferred? Beacon Values MUSEUM RETAIL Proximity UUID Museum Shopping Mall Proximity UUID and Major Gallery within the museum Store within the mall Proximity UUID and Major and Minor Exhibit within the gallery Specific shelves or product cases • A beacon uses three customizable values to identify itself (to make a connection/transmit data): Proximity UUID, Proximity UUID and Major, or Proximity UUID and Major and Minor • An Internet connection isn’t required to activate the beacon experience – however, a connection is needed to send content coupons (or other Sample ESTIMOTE UUID info) that may be driven by the app B9407F30-F5F8-466E-AFF9-25556B57FE6D
  17. 17. Privacy Concerns • Adoption rate may be hindered by consumer reluctance (concerns about sharing info with retailers and/or hacking) – for now, Beacon features (for iOS and Android) are entirely opt-in for customers • Users must enable Bluetooth on their mobile devices, and download the retailer’s app, for beacons to transmit to phones/tablets
  18. 18. In-Market Use Cases InMarket has partnered with Safeway to roll out its beacon technology to 200-plus Giant Eagle and Safeway stores in Seattle, Cleveland and San Francisco. American Eagle Outfitters’ launch begins in 100 US locations, including its primary and lingerie stores.
  19. 19. In-Market Use Cases Swirl Networks announced the Swirl Exchange for proximity-based, in-store mobile marketing. The firm is setting up a private exchange (controlled by the retailer). A brand request to run ads for shoppers (within a certain distance of products) is determined by beacons within those departments. The user experience is a full-screen mobile ad from a participating brand. The Golden State Warriors are using beacon tech to encourage fans to upgrade seats, while at the arena. Fans in the upper tier levels, "cheap seats," will receive a notification about lower-level seats available for purchase. Beacons will allow teams to better manage inventory and enhance the fan experience.
  20. 20. Beacon Marketplace Form Factor Retail Price Form Factor Retail Price Source: Fosbury There are currently more than 30 beacon manufacturers with more coming …
  21. 21. General Use Cases Retail: • Merchants can deliver in-store coupons and manage loyalty programs • Initiate programs to help with inventory management • Malls/stores can use beacons to introduce products, brands and other departments Sporting & Concerts: • Promotion of team merchandise • Notifications about food/drinks/other vendors • Find-a-friend features • Specific content (behind-the- scenes footage from the band or practice/interview sessions with athletes) Content delivery: • Will be a big driver as entities develop their own branded entertainment • Beacons will be a unique way to push content in retail environments to build relationships with customers as they shop
  22. 22. General Use Cases Airports: • Provide customers with maps of terminals • Notifications updating fliers about flight details • Gate updates and details • Deliver Wi-Fi credentials Museums: • Provide visitors with venue maps • Additional info about various works of art/artists • Wi-Fi credentials
  23. 23. Stuff I’ve done: • Chief Advisor of Digital Media and Innovation for American Association of Advertising Agencies • Head of bazaarvoice Media Labs, Intrepreneur • President at Firefly Video (division of Exponential) Intrepreneur • Vice President, Strategic Development at Tribal Fusion (division of Exponential) • President/Founder Performance Bridge Advertising • Business Development Director at Ampira Media (formerly FortuneCity) • Media Planner (Digital and Traditional) at Deutsch and at OMD Education: • Investment Banking Institute, Certificate, Financial Modeling/Valuation • University of Pennsylvania – The Wharton School, Certificate, Wharton Executive Education, Finance/Accounting for the Non-Financial Manager • New York University, Certificate, Business Finance • Saint Bonaventure University, BA, Journalism and Political Science About Me Donnovan Andrews Twitter: @donnovana Email: donnovan@gmail

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