Recently, we brought you 5 Marketing Trends to Watch For, after which we received lots of questions regarding beacons. What are they? Who do they cater to? Who can use them and how? We decided to dedicate a blog to exploring the true power of beacons and answer all the aforementioned questions.

Business Insider was the first entity to define beacons as a piece of hardware — small enough to attach to a wall or countertop — that use battery-friendly, low-energy Bluetooth connections to transmit messages or prompts directly to a smartphone or tablet. Beacons significantly increase the interactions between brands and their consumers. Beacons are a great tool for both B2B AND B2C communications.

Beacons are relatively small in size but pack a ton of power. The small tool is equipped with a Bluetooth signal that emits rays ranging from a few centimeters to a couple of meters. How, then, can a marketer utilize this for consumers?

Let’s take a standard day-to-day scenario as an example. A customer goes to their favorite sandwich shop for lunch, and as soon as they are within a certain range an alert appears on their smartphone.

"Hi Jane, your regular, the BLT, isn’t available today but there is a new special you might enjoy even more!"

A properly utilized beacon could even promote new sandwiches, snack recommendations, or a chance for the consumer to review their meal. This feedback would allow a marketer to gain valuable information based on real-time customer reviews, while at the same time linking consumers back to your website and creating more mobile traffic. (Google Mobilegeddon, anyone?)

A beacon comes at a relatively low price, ranging from €2 to around €10. These small chips are powered independently of a WiFi connection, working purely through Bluetooth. The user simply activates a Bluetooth connection and authorizes push notifications.

Apple was the first to develop this type of technology with their iBeacon, and also holds the highest amount of patents relating to the technology. New competitors however are beginning to enter the market, like Qualcomm, Estimote, Swirl, Beaconic or Gelo-Datzing.

The market has enormous potential considering the rates of daily usage of smartphones in this day and age. Opportunities for setting up beacons in shopping centers, airports, museums, trade events, schools or even bars are limitless.

The uses for beacons are similarly boundless. Beacons can be used to guide consumers to their intended location (i.e. finding the right gate at the airport). They can also advertise promotions and disseminate other marketing campaign messages and prompts.

There is a similar technology being developed by Google called Google Now, which boasts that it provides you with the right information, at just the right time. A notification that might pop up when you are near a grocery store you frequent to pick up bread and milk, or near the time you get off work to change your route home because there is a traffic jam.

Nevertheless, complaints have surfaced that the technology is somewhat invasive. The Beacons technology does raise lots of questions, the key question being: how will user data be managed? In truth, the advantage of Bluetooth is that it is a one-way form of communication. If a tag sends information to a laptop, it cannot receive information back. The only collectable information by the retailer will be the location of the consumer. Imagine the benefit of being able to identify users, analyze their movements, and the potential for business to improve the overall consumer experience based on this data.

This is not to say there is no potential whatsoever for invasion of consumers’ privacy. Unscrupulous businesses may request access to more detailed information about consumers by requesting permission to connect with Facebook accounts or by collecting data stored within the application itself. The amount of information collected will then depend on the user’s level of confidence in the business in question.

Take the city of New York, for example, where the mayor decided to install a series of beacons by squaring the 4 corners of Manhattan. The reason for this installation was never made explicitly clear and the beacons were eventually removed after a successful online petition.

So, what should the limits for beacon use be? And how can we ensure that their usefulness is limited to an agreed upon standard?