Consumer Expectations

The Real Deal on Beacons, Buzzfeed, and NYC Phone Booths

SONY DIGITAL CAMERAEarlier this month, Buzzfeed released an article about bluetooth beacons “hiding” and “tracking your every move” in New York City phone booths.  As someone who is deeply involved in location based data and digital out-of-home advertising, I received the article from countless sources, including partners and clients.  While Buzzfeed produced an enthralling article on the technology, the end result was, unfortunately, entirely misleading—so much so that City Hall has now asked Titan to remove all beacons from its kiosks.  The request seems to me a bit unfair, borne from a misunderstanding of the technology, as explained by Buzzfeed writers Joseph Bernstein, Sarah Ryley, and Jeremy Singer-Vine.  So, here is the real situation regarding beacons and out-of-home advertising.

First, let’s take a step back.  Beacons are just one form of the proximity-aware technologies that have entered the marketplace.  These have existed for a while, starting with inaudible signals and apps like Shopkick.  It is clear these technologies have huge value for retailers and advertisers—and, if used correctly, they can provide commensurate value for consumers.  So before we cry foul, we should make clear that proximity awareness is a good thing for both consumers and marketers, and it has the potential to deliver relevant content while unlocking the true value of mobile as the device consumers take on the go.  We shouldn’t disincentivize marketers from using these technologies (or scare consumers into de-activating them) before they can add value and gain adoption.

Second, it’s important to establish how bluetooth beacons actually work, because the Buzzfeed article did an insufficient job.  The beacon emits a unique identifier.  A phone recognizes the beacon only if:

  1. The phone has an app with the proper SDK installed;
  2. The app has been given location services permission; and:
  3. Bluetooth is turned on.

Apple, which has been talking a lot recently about its emphasis on protecting consumer privacy, has pushed hard for this proximity technology to be the standard over WiFi-based technologies specifically because of the consumer opt-in requirements listed above.  With the release of iOS 8, in fact, Apple took steps to safeguard consumers by randomizing the MAC address—that is the identifiers WiFi based technologies had been using for their analytics.  So in contrast to bluetooth, WiFi could ping a consumer’s phone and pick up its MAC address, requiring neither an app install nor permissions granted.

Beacons, then, are the most consumer-friendly, privacy-conscious, proximity awareness technology available today.  (As Jules Polonetsky told Street Fight in response to Buzzfeed’s story, people track beacons, not the other way around.  They are not, as the Buzzfeed update indicates, used to track phones.)  But, let’s be honest here: modern-day advertising is all about using data for targeting and creating efficiency for clients.  Anyone who has ever visited a website has seen that brand’s ad follow him across every other website he visits that day or that week—. We don’t give permission to websites to enable retargeting; we accept that it happens and it surfaces ads tailored to our interests.  And yet we’re afraid of a technology that essentially does the same thing and requires permission?

Proximity-aware technologies, be they beacons or something else, are helping converge the digital world with the physical world.  Welcome to the “internet of things” revolution.  It is inevitable that, based on this type of technology, real-time online targeting will be applied to out-of-home ads.  So just as we accept being retargeted on Facebook or Amazon or the New York Times today, we should accept seeing tailored ads on NYC phone kiosks once these technologies become widely adopted.  This isn’t about privacy; it’s about relevance.

Jeremy Ozen is a co-founder of Vistar Media, a cross-screen, location-based media company.  Jeremy was previously at Goldman Sachs’ European Special Situations Group in London monitoring a portfolio of venture investments. He has a BAS in Materials Science Engineering and a BSE in Finance from University of Pennsylvania.