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Coca-Cola has taken a step closer to using beacons to turn location-based marketing on its head

Coca-Cola is to explore the hyper-relevance beacons provide after a recent trial revealed how intention data generated by the tech can power mobile advertising in an accurate, and scalable way.

It represents a major step toward Coke figuring out a role for beacons in its marketing mix, which is still shackled somewhat by its reliance on global and national campaigns. Beacons can bring context and precision to promotions if they are not used in isolation, as some brands have done, and instead are baked into much larger location-based campaigns like Coke’s recent trial.

The pilot scheme, conducted throughout May and June, saw free Coke offered to cinema-goers if they had Norwegian publisher VG’s app on their phone as they walked through CAPA foyers. Beacons were used to gain the data, which was then stored anonymously on media platform Glimr so that those who had redeemed the offer could be retargeted with a free cinema ticket online a later date. The exchange was facilitated by proximity network Unacast.

Using beacons in isolation doesn’t work

A quarter (24 per cent) of the people that had VG’s app on their smartphone clicked on the offer, while 50 per cent of those went on to get their free Coke at the cinema. Further still, most (60 per cent) of those people who visited the cinema clicked on the retargeting ad they were served up to a week later, which then greeted them with the offer of a free cinema ticket courtesy of Coke. Half of those who used the ad returned to the cinema to collect their free ticket.

It’s a simple promotion that could allow Coke to build more rounded customer profiles for its campaigns, with the beacons acting as a proxy to tie offline back to online ad targeting.

Other advertisers have struggled to do this because they’ve used purpose built apps for Beacons promotions that have been unable to convince people to use them regularly. But just like Unilever before it, Coke partnered with a publisher that already had an already popular app that people use in order to get around this obstacle.

Coke discussed the challenge earlier this year at SXSW. Senior digital marketing manager Zoe Levine said that Coke needed an “app that people want to download” and “use on a ongoing basis” for beacons to become a core part of its marketing. While its recent test suggests this stance may be wavering, noises coming from the company suggest the future of the technology is in proximity-based marketing.

Knut Anders Thorset, senior manager of digital sales and marketing at Coca-Cola Enterprises Norway, said: “This trial proves that beacons enable brands like Coke to use existing media channels in new ways. The hyper-relevance beacons provide ensures that we can amplify our role and deliver something of real value to both retailers and consumers. Unacast has harnessed the power of proximity marketing, making it a genuinely viable, scalable channel. We look forward to the results from the further roll out.”

Given Coke’s current ambition to be more disciplined with its marketing, it’s unlikely that anyone internally thinks beacons will be groundbreaking or offer an enormous revenue strategy. However, it shows they’re willing to test and learn.

Proximity marketing at scale

A wider rollout of the campaign across 110 Nordic cinemas is being discussed for later this year. Similar tests could also extend to other regions with Coca-Cola Enterprises already experimenting with beacons in the UK last summer, and the main business has also conducted trials in its Atlanta homeland. For Coke, technology like this represents a chance to start to understand its customers more clearly, an appetising prospect given it has limited into who is actually buying the brand and how.

Kjartan Slette, co-founder and chief operating officer of Unacast, said: “It’s shocking that some brands are selling all these products in physical stores but have no idea who’s actually buying them. That’s the true value of proximity; it’s getting the brand closer to that audience.”

A lifeline for publishers

It’s not just advertisers beacons could help.

The results from the Coke and VG tie-up pose a potential lifeline for publishers suffering decreasing cost-per-clicks and ongoing print declines. With average promotional and digital marketing response rates ranging from less than 1 per cent to single figures, according to Slette publishers could build ad products to work with beacons and other location-based services to create more premium ad products to sell.

Consequently, VG claimed that proximity or ‘ads that know where you are’ is the lifeline for a digital ad business that appears to have peaked and is now in free fall. Such a proposition could allow online newspapers to sell ad space at the county, city, location and product shelf level ensuring relevance and effectiveness for advertisers.

Both Google and Facebook have also put their stake in the beacon landscape in recent weeks. The companies are building propositions for global advertisers and local businesses that promise to yield sharper targeting at scale and richer measurement.

Seb Joseph

Hi, I'm the news editor at The Drum. Give me a shout if you have any questions about our news coverage or would like to pitch in a story.

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