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Friday, August 01, 2014         

NEW YORK TIMES


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Phone alerts at stadium, for nearest gate or shortest beer line

By New York Times

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Want to see the Vince Lombardi Trophy that goes to the Super Bowl winner? Take a left in 15 feet. Looking to buy some Super Bowl merchandise? Try the fourth floor of Macy's, straight ahead.

The Super Bowl remains the biggest mass-market advertising event in the country. But this year, a new kind of advertising — personalized and based on physical location down to a matter of feet — will greet fans in Times Square and MetLife Stadium, where this weekend's championship game will be played.

At both locations, the National Football League has sprinkled tiny wireless transmitters that can send finely tuned messages to smartphones. It is the boldest test yet for a months-old technology that could change how brands of all sorts market to their customers.

For now, the alerts are mostly limited to practical news (like the nearest entry gate) or promoting in-store sales (say, for your favorite chocolate) in the first wave of establishments using it. But already the technology has privacy advocates and legal experts brimming with concern about the implications. Smartphone users could potentially be spammed with advertisements, they say, and a company that collects the data might be inclined to sell it.

"When it rolls out, you will see all this utility for it," said Ryan Calo, an assistant professor of law at the University of Washington in Seattle. "And at some point the economic incentives will come into play and it won't be pretty."

The transmitters, often called beacons, will be in several hundred stores and public areas in the coming months, including at two dozen Major League Baseball stadiums and many Macy's and American Eagle Outfitters retail stores. Apple has the devices in more than 250 stores.

While location-based alerts and advertisements have long been a feature of smartphones, the new technology requires less from users. When Apple updated the software for iPhones several months ago, the company included a new feature, iBeacons, that displays alerts even when a user is not running an app.

That change has led to a surge in interest among brands. Technology executives say Apple is further along with its version of the technology, which is why most alerts of this kind are now sent to iPhone users. But smartphones running Google's Android operating system can also be targeted.

Once users download a brand's app and give permission to receive alerts, they can get messages whenever their phone drifts within range of one of these beacons. (Typically, users can stop the tracking and the alerts by changing the app's settings.)

For brands like Major League Baseball, which had more than 10 million users of its MLB.com At Bat app last year, the potential for outreach is enormous. Brick-and-mortar stores are quickly warming to the technology, too, thrilled by the prospect of being able to fine-tune marketing messages and gather more data about customer behavior, just as online competitors like Amazon have for years.

"The power of this is it really is able to connect the real world, the brick-and-mortar world, with the virtual world with a level of granularity that hasn't existed before," said Manish Jha, the NFL's general manager of mobile.

When shoppers walk through the door of one of 100 American Eagle stores installing the technology, they will receive a welcome message on their smartphones, notifications of discounts and product recommendations. The precision of the technology will allow American Eagle to show sale information for jeans only when a customer is in the jeans department.

"It gives the retailer a chance to have a one-to-one dialogue directly with the consumer," said Alexis Rask, chief revenue officer of Shopkick, a Silicon Valley startup working with American Eagle and other retailers like Macy's to set up beacons in their stores.

Major League Baseball will have beacons installed throughout Fenway Park in Boston, AT&T Park in San Francisco and about 20 other stadiums in time for opening day this year. People with smartphones and one of the two MLB apps with beacon support will get buzzed with greetings when they pass through turnstiles, messages about nearby statues and other points of interest and reminders about how many loyalty points they have from past purchases at the ballpark.

Robert Bowman, president and chief executive of MLB Advanced Media, the Internet arm of Major League Baseball, said stadiums were becoming "crucibles for technology." But he said there was bold line between gentle marketing pitches and obnoxious upselling.

Where is that line?

"Welcome back, and last time you bought this jersey. This week, do you want to buy this jersey?" Bowman said, composing an unattractive smartphone advertisement on the fly. "To me, that's crass commercialism."

Other location-tracking technologies have helped people orient themselves on maps by using the satellite-based GPS and Wi-Fi access points. Those technologies, though, are not as precise as beacons at detecting a user's location. GPS signals also do not travel well indoors, and beacons, many of which are battery-powered and use a technology called Bluetooth low energy, are cheaper and easier to install than Wi-Fi antennas. Qualcomm, for instance, makes beacons that cost $10 each with batteries that last up to three years.

Privacy advocates say they are concerned that the proliferation of beacons would add considerably to the vast amounts of data marketers are gathering about consumers. While apps often indicate in their terms of service how they use location data, many people ignore the fine print of those agreements.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, a nonprofit research and advocacy group, said marketers could use the new location tracking tools in unexpected ways, like mapping relationships for people who happen to visit the same location repeatedly.

"Users will have no idea what information is collected or how it will be used," he said.

The companies installing the beacons say they will respect the privacy of people who use the technology. Jha of the NFL, for instance, said the league was not connecting personal and location data with its Super Bowl experiment. Supporters of the technology say most people will find the benefits of using it, like discounts and helpful tips, worth the trade-off of sharing data. In a test at a Miami Dolphins game at Sun Life Stadium in Florida last month, Qualcomm used the technology to alert fans about where to find the shortest concession stand lines.

And the companies say they realize they need to avoid sending irrelevant or excessive alerts. Todd Dipaola, chief executive of InMarket, a company that has begun testing beacons inside grocery stores in Cleveland, San Francisco and Seattle, said that approach would not last long.

"There's one penalty for annoying your consumer — that's the death penalty," he said, and then described the process of deleting an app. "They hold down the app, push the X and it's gone."

———

Nick Wingfield, New York Times






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