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Retailers Apply New Advertising Network Technologies

Retailers are adopting a new wave of wireless technologies that could transform the shopping experience in numerous ways. Wireless in-store beacons are a key component of this strategy. These tiny beacon devices broadcast small pieces of information to nearby shoppers via their smartphones, which are enabled to receive the message via a retailer's software app.

What's in these messages? Personalized advertising promotions that are targeted at consumers. ABI Research now forecasts that dedicated Bluetooth low energy (BLE) beacon advertising networks will be worth over $2 billion in revenue by 2020.

ABI has been studying the use of BLE beacons, audio/ultrasound and LED/VLC for advertising purposes across large third-party networks, Out of Home (OOH) and in-store brand advertising.

"What is clear is that BLE beacons are not enough, and already many of the most successful advertising networks are using audio/ultrasound technologies," said Patrick Connolly, principal analyst at ABI Research.

Longer term, the ABI market study also uncovered the use of LED/VLC to help further augment these networks. This is a hugely powerful technology that can have a major impact on scaling the mobile advertising industry.

Companies such as InMarket, Swirl Freckle IoT and Mobiquity have begun massive BLE beacon advertising network programs in North America in 2015. But worldwide, a host of startups are using hybrid BLE beacon/audio technologies -- including YAP, Perples, Blesh, Shopkick and Ecods.

This hybridization trend is essential to support the short-term reach and frequency limitations of iBeacons, given the requirement for active BLE on the handset and user opt-in (achieved by downloading and using the retailer software app).

ABI believes major internet players --such as Facebook, Baidu, Tencent and Google -- will have a significant presence in this space, with many already developing the ecosystem necessary to support their own mobile advertising networks.

Looking specifically at the OOH space, the banning and/or removal of traditional billboard advertising in cities like Sao Paolo, Chennai and Paris is an interesting emerging trend with major repercussions.

According to the ABI assessment, proximity technologies could create a way to circumvent this trend, while creating far more personalized advertising. Moreover, OOH deployments will break the 500,000 mark by 2020, as advertising companies rapidly embrace these new technologies.

The third major trend driving the growth will be major brands deploying their own advertising networks in-store in conjunction with their retail partners. Already, major brands like Elle Magazine, Coca-Cola and Unilever have all ran campaigns using this approach.

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