Musings Of A Marketer

The previous post about Bluetooth marketing was actually written in late march, and although the situation remains more or less the same in this sphere, I did know what I was talking about then. A month later our company finished internal testing stage of our new product – TeriZone – which was a significant step forward in development of Bluetooth marketing – both in terms of concept and in technological aspect. This initiative was supported by a number of permission-based marketing fighters, including Tim Trent who pays a great deal of attention to Bluetooth and mobile marketing trends, and Greg Harris, the head of Mobivity agency - he is also clearly focused on anti-spamming procedures in mobile marketing.

Thus, in May 2007 I wrote an article about TeriZone against the progress it was leading to. Here below is the article. Unfortunately, the lack of investments became a crucial obstacle for TeriMobile to fight logistics and customs issue, and we were forced to reduce our promotion budget to almost nothing, so we had to take a pause and refrain from introducing the service further to beta stage, although all the technicalities were settled in full.

Bluetooth Marketing Improved

In the previous article I mentioned a number of failures that Bluetooth communication agencies would have to focus on improving to make the new digital channel worth trying for the brands. Some of those issues have been successfully addressed to by the TeriZone system, so let’s see what has been improved so far.

1. Opt-in / Permission.

The projects that have been implemented for the brands so far would raise negative response mainly due to the lack of a clear-cut opt-in procedure. Many evangelists of permission-based marketing would name those projects as inconsistent with the idea of permission marketing, and even illegal for some countries, example being the UK.

With TeriZone the Bluetooth transmitters (including simple Bluetooth dongles reaching 10 to 30 metres, or more complex devices operating in the range of 200 metres, like our Wi-Streamer) are able to receive files from users’ phones, which turns a purely push communication model into the possibility of pulling customers into interaction. This becomes an important feature in terms of changing the opt-in procedure and make users actively request for communication during the first contact, or, if necessary, on any stage of communication. This concept has seen insiders, including the specialists of permission based marketing and mobile marketing, to accept the fact that Bluetooth communication can be non-intrusive and desired by the receiver.

2. Targeting / Personalization

One of the arguments that the opponents of Bluetooth marketing would justly point out was that the advertisers using Bluetooth would send out messages to all passers-by with no specific targeting at individuals. This method bears the danger of the advertisers being perceived as spammers delivering unsolicited messages with no value for certain users.

TeriZone concept is designed to maintain the preference database of the registered users, which enables the advertisers accessing the database to deliver fully personalized messages to the individual users. Since all the registered transmitters are networked, the users will be detected by the advertisers no matter where their previous contacts had taken place, and communication will be implemented according to the preferences. This method prevents annoyance of the users, who now have a chance to define how, when, where and with whom they wish to interact: the info is explicitly shared by the users rather than gathered with the help of various implicit signs (as possible interests of the people walking in a certain area). Thus, advertisers are able to pick a single individual from a crowd to address to him/her with a personalized message, rather than picking a crowd in a certain area (preferably, nearby the advertiser’s operations location) in hope of reaching as many targets as possible, and with no consideration of misuse.

3. Location Based Services And ROI

The personalized interaction between the advertisers and mobile users has certain implications on ROI in each project carried out. And considering the fact that the advertisers are able to deliver personalized information near the advertisers’ touchpoints, the response and conversion rates increase drastically.

4. Control

The TeriZone system connects all the registered devices into one comprehensive network. This facilitates the communication between brands and consumers: once registered to a delivery from a brand, the mobile user will be contacted not only at the same place, but at any location in the world where the advertiser has registered the transmitter.
Additionally, the networking feature gives the advertiser a chance to launch campaigns, track their flow, make amendments, and view statistics just sitting at an office desk.

5. Security

As I mentioned in the first article, the Bluetooth SIG group has been paying much attention to the security issue from the very start of the technology. It is now said that the majority of mobile devices are now protected from unauthorised intrusion, however the concerns of the users are still there. With TeriZone, the receivers will know when and where they may be contacted by the advertisers, and therefore, they reduce the risk of being intruded fraudulently by spammers or bluejackers.

6. New Business Model

The start of the TeriZone system has given way to the new business model in Bluetooth marketing. The two models existing in the market have been complemented by one more: depending on the duration of their campaigns the advertisers who have bought or rented the Bluetooth equipment can now choose to access the consumer preferences database to more efficiently target the users passing by. Thus, having once acquired the equipment, any small or medium business can periodically implement inexpensive location based campaigns targeting specific audience in the proximity area.

As another innovative way to complement traditional marketing techniques along came Bluetooth marketing. This new concept has been in practice for not so long, and needs to get more attention from the consumers and marketers to start evolving in more or less significant scales. We aim in this brief article to disclose the basic features and trends of Bluetooth technology as a marketing communication tool, so the consumers should be made aware of the technology, and improve their thinking of it, or make it even more negative, if you like.

The Rise of Bluetooth

Bluetooth appeared as a result of the work of a development group consisting of the representatives of several telecom giants: Ericsson, IBM, Intel, Toshiba and Nokia. These companies combined their resources to create a unified technology for wireless connection of mobile devices. Some time later the group working on the project (The Bluetooth Special Interest Group – the Bluetooth SIG) expanded, companies like 3COM/Palm, Axis Communication, Motorola, Compaq, Dell, Qualcomm, Lucent Technologies, UK Limited, Xircom entering the group. Today, the group combines the efforts of as many as over 4000 companies working on the development of a free and open specification of Bluetooth. This unified work has created the main advantage for Bluetooth – it is now supported by most of the mobile devices that are produced nowadays. Another advantage when compared to, say, IR signal, is that the users can exchange data through radio waves without setting a direct visible contact. Today, penetration of Bluetooth into mobile phones in EU, for example, is at a rate of 35% – 42%, while up to 2008 it is expected to rise as high as 80%. 2006 was the year that Bluetooth Penetration reached the One Billion mark. IDC forecasts that by 2007 more than 433 million Bluetooth devices will ship worldwide, which is an estimated market penetration of 74 percent. Bluetooth Location-based media distribution also took a major step forward.

The Rise of Mobile Marketing

In that early period of initial development of the technology nobody would have thought of using Bluetooth as a marketing tool. Traditional media were striving and dominating the marketing communications, while various viral campaigns were just taking their first steps. However mobile technology was taking a rapid growth and along came agencies offering mobile as an alternative media to TV, radio and print. The growth was so fast that the penetration level of mobile channel has exceeded the Internet. Thus, the advantage that the mobile advertisers could use was the reach to the end consumers. But the major advantage was, of course, the targeting opportunities – the personal nature of the mobile devices became a grand, long-awaited opportunity to develop personalized communication programmes, and the two-way nature of mobile channel gave the opportunity to create the interactive communications, where the response of the communication target is valued even higher than the messages originated by the advertisers. Some opponents would argue that the mobile marketing is just another threat of spamming – none can be assured that the companies would not start sending out messages of no interest to every single mobile user who has no interest in their services. Do they make sense? On the first glance, this threat is possible. However, let’s look at this problem from a company’s viewpoint. None knows how much time and how many efforts brands allocate to create a positive image with the customers. And everybody knows that this image can be spoilt in just one minute - just a trifle, small mistake, and the rumours go viral. Next day you have to start all over again. The brands do realize the danger of delivering messages to mobile users without any system. The mobile marketing players have learned the lessons of its elder brother – Internet and email. The Mobile Marketing Association and a number of other bodies were established to consolidate the mobile industry players. The latter are in close contact with each other, discussing the issues arising during their activities. This consolidation and collaboration has changed the traditional way we look at the industries: and this way has the name – mobile players are working within the so called ecosystem, where technology and content providers, brands and agencies, aggregators and operators work in close collaboration to stimulate the growth of the industry. What is more, mobile devices are always on, which makes the consumers reachable no matter where they are – they need no access to TV sets, Internet or whatever else – you name it. One more: the mobile campaigns proved to create much higher response rates. Finally, the mobile marketing programmes were so much less costly to create. Seeing all these advantages, many marketers started turning their attention to this sphere.

Bluetooth Marketing as it is

Alongside with the mobile marketing (which basically includes text and MMS messaging, content delivery, mobile internet and mobile video) the agencies and brands have started to show some interest in using Bluetooth as a communication tool. This sphere, however, has not been developing as fast, due to the ambiguity of implementation of Bluetooth marketing campaigns. The Bluetooth marketing practice that has been implemented by various agencies so far gave rise to rather agitated discussions. The supporters of Bluetooth marketing are attracted by the fact that they receive location based and time-relevant information, discounts that can be used right the moment they are provided, and, unlike with mobile marketing, the communication is cost-free for both advertisers and the audience. Their opponents argue that all the obvious advantages will offset one major drawback: bluecasting is intrusive and annoying, and people will hate receiving unsolicited messages delivered to their mobile phones. In the end, this way of “push” bluecasting can be perceived as something as dangerous as “bluespamming”. Naturally, both the sides make reasonable points, and this new media, just as sms marketing, demands increased cautiousness from the marketers. The latter should not be tempted by this cheap opportunity and spam all the passers-by with the standard messages. In the end it is personalization that is the most advantageous criterion of location based services, and sending the same message to everybody passing by is the way to become an aggressive intruder into people’s privacy. Since the legislation has not been fast enough to catch up with the development in the wireless sector, players in some industries (as, for instance, mobile marketing) have consolidated to introduce the necessary regulations to stimulate continued growth. Just for the same reasons caution has to be taken, and certain reasonable regulations must be imposed on the players in Bluetooth marketing sphere to prevent the aggressive image of this young industry and make it more positive in the eyes of the mobile users, which will in the end benefit all the participants.

Security

Another major idea hindering the development of Bluetooth communication is the security concerns. Although this is the area where the SIG group has focused its most resources (and especially with the mobile phones), the people are not ready yet to accept the idea of absolutely secure Bluetooth communication in the public places. To a certain extent the pessimists have their reason to be pessimistic. However, those who follow the simple rules of using Bluetooth in public, should not be worried of being put to danger of receiving harmful files. The thing is that the mobile producers have found the ways to prevent all sorts of “hidden” attacks from all kinds of violators: bluejackers, bluesnarfers, bluebuggers. Today, only the older models can be hacked without the users knowing and giving authorisation to connect to their phones. This means that a mobile user can control his communication process – whether he/she wants to accept or cancel the connection – it is up to an individual user to decide. I do advise to keep one’s Bluetooth off or at least in the “hidden” mode as long as he/she is not intending to send or receive files. And I do advise the advertisers to not narrow their communications to solely Bluetooth channel. The latter should be accompanied by a traditional media (say, outdoor posters inviting passers-by to turn their Bluetooth on to receive a beneficial offer). Thus, the user knows exactly when the necessary communication may start, and who the sender is.

Business Models

Let’s have a look at what we have observed so far in this industry: A number of Bluetooth marketing agencies have appeared on the market to fill in the demand on the location based services. To offer their services to the customers the agencies have chosen several types of business models which, along with the advantages in the face of the competition, have certain drawbacks which hinder the development of the industry and the growth of demand.

• The first business model is the pure selling of the Bluetooth Communication devices. This option allows marketers to send out specific messages to the passers-by. This model is meant for the smaller businesses that show their interest in integrating Bluetooth channel to their overall communication strategies. Small companies are budget-sensitive, therefore, they can be attracted by the perspective of minor investments into the communication process. Besides, this communication will allow to more efficiently track the ROI – the opportunity to track the number of messages sent and the number of visits prompted by the messages. There is a major disadvantage that we can predict for the customers within this business model. This is a purely push model, and there is no chance for the company to send targeted messages. If a company in, say, a retail business starts sending out messages to passers-by, there will be a certain percentage of the receivers annoyed by being disturbed. This intrusiveness cannot be prevented in any efficient manner with this push-based model. Therefore, marketers should be careful using Bluetooth communications this way. One way out is to offer very significant rewarding to the receivers, which is never efficient for budget-sensitive companies. On the other hand, companies in some specific industries will feel more or less free to send out messages to the audience (e.g. sending various information messages to participants of a conference, since the audience is supposed to have similar interests in certain spheres). To some extent the outdoor and print advertising warning people about Bluetooth communication area would help both in lowering dissatisfaction by intrusiveness and increasing the reach to the customers by prompting them to switch the Bluetooth signal on to receive certain beneficial messages.

• Another business model offers full outsourcing of Bluetooth communication campaigns. This means that the agencies allocate their resources to design complete Bluetooth communication programmes for the client to integrate them into the overall communication strategies of the brands. This model is advantageous for the bigger businesses that find financial resources to outsource communication campaigns to experts while concentrating their own resources on their core competencies. In this case I would advise the brands to be careful selecting their partners for this type of communication. To conclude the above text, I believe that Bluetooth, with its certain advantages, needs some time to accept the shape that will convince the sceptics to try it out along with the today’s supporters of the service. And I know that this moment is not too far off now. This has to become a trend – in the end both the consumers and the brands have been longing for the opportunity to provide and to receive the services they need – exactly where they need them and when the need them. Bluetooth communication has to become interactive, personal and secure for people to unanimously accept it. The industry has not yet been ready to meet this combination but I believe that with the technology development it is just a matter of time - little time… So, let’s wait some little time to enjoy the services that Bluetooth marketing is preparing for us in the nearest future.

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