Prepared by: Donnovan Andrews | donnovan@rethinkmedia.com

@donnovana

Beacon

TechnologyOverview & Marketplace

Opportunity

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.

The Next Tech Revolution: The Internet of Things

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

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

The Internet of Things: 6 Main Layers

*Framework is part Morgan Stanley and part Rethink Media

*

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.

• 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

Key Points about Beacons

Bluetooth LE* devices transmit

small packets of data …

… Which wake up an application on your

mobile device

The application triggers delivery of content,

coupons, offers and info

What Do Beacons Do?

*Bluetooth Low Energy (BTLE)

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

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?

immediate near far

receiver transmitter transmitter transmitter

• 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

Proximity vs. Location

1

3

21

4

BeaconBLE 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

Behind the Curtain

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

• 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

Beacons for Android

Who is in the Lead?

Available on …

Devices Ready

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

• 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

29%

Devices Ready

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

What Kind Of Data Is Transferred?

• 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

info) that may be driven by the app B9407F30-F5F8-466E-AFF9-25556B57FE6D

Sample ESTIMOTE UUID

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

• 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

Privacy Concerns

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.

In-Market Use Cases

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.

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.

Beacon Marketplace

Source: Fosbury

Form Factor Retail Price Form Factor Retail Price

There are currently more than 30 beacon manufacturers with more coming …

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

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

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 AndrewsTwitter: @donnovana

Email: donnovan@gmail