By Michael Foster

When the cookie was first used for online targeting, marketers thought they had hit a gold mine. Here was an easy way to see what people had visited in the past, which implied what they were interested in, which implied what you could sell them. Thus behavioral targeting was born, and marketers quickly realized you could optimize your display campaigns by looking at these cookies in all sorts of ways.

There was only one problem with the cookie-based marketing effort: It only captured online activity. What about your purchasing offline? Wouldn’t it be valuable if I could see what you had looked at in retail stores in the past and use that data to serve you ads online?

It sounded like science fiction for a long time, but the technology is here, and marketers are already using it. To combine online and offline behavior, marketers now use beacons—small devices, usually Bluetooth-enabled, that sniff for cellphones as they pass. When they see one, they make a quick connection, find out who that cellphone’s user is and serve that info to a database. Marketers then can access that database to serve ads later online.

Beacons and online retargeting are being combined in all sorts of ways, but we’re still in the first innings of this marketing revolution. It is going to take time for the technology to be more ubiquitous and useful to marketers, but there are still opportunities to use the tech to bolster ad performance.

Even now, early adopters and beta testers are seeing tremendous improvements to both branding and sales-oriented ad campaigns. For instance, ad agency Mondelez has been working with Coca-Cola to test the use of beacons for improving ad performance, and the two companies recently told The Drum about their success. Both firms see beacons as an alternative to the onslaught of banners, flash videos, pre-roll ads and the other mishmash of ads that are increasingly making the Internet cluttered and less user-friendly.

So far, so good with beacons, but data remains scant. Other big brands are jumping in, and more studies will provide more evidence of the value of these tools to sell products to people.

According to some marketers, the future of beacons is much more exciting. These devices can receive and transmit data quickly, meaning they can be used for much more than simple marketing. Using them to coordinate and facilitate payments, deliver customer service and manage supply chains is on the table. Using them to serve ads more quickly—such as sending a coupon to a cellphone for a product when the customer is within inches of the product itself—is another benefit of the service for both marketers and consumers.

But beacons do not come without pitfalls. The privacy concerns are clear; having more data about people’s whereabouts and behavior makes some uneasy, and the specter of spying on people as they go about their business is still dystopian to many. Marketers dismiss these concerns as 20th-century hangovers; Millennials seem less uncomfortable with being spied on by governments and companies, giving the beacon fewer hurdles as this large demographic ages and becomes a bigger focus of marketers.

The future of beacons is unclear but exciting, and their value in a larger ecosystem of marketing retargeting efforts is clear. The only thing we don’t know is who will win and lose in the retargeting battles that will unfold in the years to come.

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