Brands turned off by beacon technology

Mobile World Congress: Barclays and Paddy Power have questioned the value of beacons as a mobile marketing tool, warning that poor brand executions and technological barriers will undermine the future of the location-based technology.

Barclays mobile payment
Barclays is one of several major brands to have begun trialling beacon technology

At an exclusive roundtable discussion at Mobile World Congress in Barcelona, Barclays head of mobile banking Darren Foulds said there is a strong likelihood consumers will be turned off by the nascent technology, which uses Bluetooth signals to send marketing messages to people’s smartphones according to their location in a physical space like a shop or event venue. Mobile users must opt-in to receive messages via a brand’s app.

Barclays is one of several major brands to have recently begun trialling Apple’s version of the technology – iBeacons – on a limited basis, but Foulds said he was sceptical about its marketing applications.

“I think that by the time someone cracks beacons in a way that consumers want and find value in, there will be 99 companies that have ruined the experience,” he said. “So I can see a lot of people switching off beacon technology because they get spammed as they walk down the high street or go in a store.

“If you think about every marketing method over time, you have a higher proportion of people who opt out. I don’t see that we’re learning our lessons as a mobile industry to suggest how we manage that effectively so we don’t repeat the situations of the past.”

Paddy Power marketing manager Lucinda Kelly also voiced concerns about beacons at the roundtable, which was hosted by multi-channel technology provider Oxygen8. She revealed that Paddy Power is exploring possible uses for beacons within its marketing mix after competitors William Hill and Betfair started using the technology, but said the brand was currently unconvinced about its potential reach.

“When you break it down, you start with iBeacons before you get into Android, then [you’re looking at the] volume of customers that have Bluetooth turned on and the volume of customers that [have opted in],” she said. “Suddenly that customer base becomes very narrow, and actually the use cases that we have looked at aren’t compelling enough for a customer to actually engage with it.”

Kelly added that there are interesting possibilities around using beacons in UK sport stadia, but that 4G and Wi-Fi infrastructure would have to improve first.

The roundtable also saw new research unveiled into the best brands on mobile according to consumer experiences. The study, commissioned by Oxygen8, asked 8,500 UK mobile users to name their favourite brands on mobile according to the brand they judged to deliver the best overall experience.

Facebook came top, ahead of Amazon, WhatsApp and eBay, while Barclays, the BBC and NatWest also made it into the top 10.

Shane Leahy, chief executive of Oxygen8, said: “The top 10 results include some of the world’s biggest and most powerful brands but it also includes the biggest names from the UK banking sector which is indicative of how smartphones are changing the way people run their day-to-day lives.”