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What is microfencing? Get the scoop on proximity marketing

At Marxent, we are always experimenting with the latest mobile technologies and finding ways to integrate them with Augmented Reality. I recently had the chance to explore Qualcomm’s Gimbal Bluetooth Low Emitting (BLE) beacons. Gimbal beacons provide a way to communicate with bluetooth capable devices and can be used specifically for proximity awareness and proximity marketing.  Microfencing proximity marketing technology is exciting to me as a software engineer but are consumers ready to embrace it?

What is microfencing?

Microfencing uses bluetooth beacons to detect consumer mobile devices (such as smartphones) within specific geographic boundaries. The definition of a geographic boundary is broad and might include a county, a city, a street, a retail location, an aisle within a store or the shelf location of a specific product. Though microfencing is similar to GPS in that it can detect location, it is much more granular and provides greater accuracy. With microfencing, the geographic target range can be anywhere from a few inches up to 50 meters from the location of a beacon.

What companies are working on microfencing solutions?

iBeacon is the most widely discussed solution and is Apple Computer’s microfencing technology for iOS. Companies such as Gimbal and Estimote are creating BLE beacons designed to meet Apple’s performance standards and work with devices that incorporate the iBeacon protocol. Retailers such as American Eagle and Starbucks are already testing proximity marketing solutions for loyalty program and service enhancements.

How microfencing works

Using the Gimbal platform and associated SDK, developers can communicate between beacons and a device using an app with a registered API key. The proximity API gives developers an option to detect when beacons are sighted or when a visit has occurred. A sighting occurs when a beacon’s signal is in range and being detected by the device. For more specific detection, beacons can also be programmed to detect a visit which occurs when a beacon’s signal strength reaches a target threshold. The signal threshold is a parameter that can be set and determines the proximity the user has to reach before a beacon triggers a visit.

Overall, Gimbal provides documentation that is clear and walks developers through the necessary steps to integrate. The process to start services, set necessary parameters and listen for beacons was straightforward. With that said, the handling and detection of multiple beacons along with tying notifications to visits proved to be a bit more of a challenge.

When tracking beacons, I found it useful to keep an array of beacons that entered the “visit area” and updated each time a beacon left that area. Depending on the action tied to a particular beacon a related timer would be started and prevent another notification until the timer has ended. Keeping track of beacons and the use of timers helped to limit the number of notifications sent to the end users. This prevents the spamming of users with notifications as it possible to enter and leave target areas multiple times.

Why is microfencing important to companies?

Microfencing offers companies a toolbox for tracking customer visits, traffic flow at physical locations and for providing real-time location-based notifications. In the context of consumer loyalty programs, an end user might receive personalized marketing and promotions based on their exact location within a store or mall. The biggest advantage is the ability to reach consumers where other technologies such as GPS may fail. For example, using BLE beacons indoors or in urban areas where GPS signal maybe lost due to interference.

What are the downsides to microfencing?

Microfencing isn’t yet a perfect targeted marketing solution ready for universal acceptance. Concerns about privacy and security are some of the roadblocks facing microfencing. This paired with the need for iBeacons to access bluetooth permissions to individual devices along with questions around cost and scalability means that there is still much work to be done in order to make the proximity marketing experience popular among marketers.

1. Privacy and security

Information on user locations and visits can be sensitive and there haven’t been standards set on what permissions and policies are required for consumer participation or what information can be tracked, stored and shared.

2. Bluetooth is required 

Another important aspect to consider is the end user’s willingness to give a given iBeacon application permission for bluetooth communication.  It is possible that a microfencing application can fail if a user decides to deny access. Additionally, microfencing apps must be running as the active app or in the background to communicate with the iBeacon. This opens up the potential for end users to miss notifications if they neglect to open the app or inadvertently close it.

3. Cost and scale

Depending on the scale of an application cost could be a consideration. Additional hardware must be purchased by companies to leverage this technology. This will only be a factor for larger retail chains that want to deploy across multiple site locations.

Microfencing is close to consumer acceptance

After working with Gimbal beacons, I see an opportunity for microfencing to take off in consumer apps with only a few hurdles to overcome. The major factors keeping proximity marketing from mainstream use are awarenesses, acceptance and issues around privacy.

1. Awareness

Developers can help to educate and guide clients in suggesting and creating experiences that engage end users without feeling intrusive. User communication is also critical. End users need to understand exactly why proximity marketing is being employed and how it is useful to them.

2. Acceptance

Consumer acceptance will come with time, exposure to applications that use microfencing and a clarification of consumer benefits.  Consumers need to know that they’re getting some kind of specific value in exchange for sharing their location information, such as discounts or exclusive information.

3. Privacy (again)

Companies need to clearly inform consumers as to what information they are tracking, why and how that data is being stored and used – all of this without interrupting the consumer experience.

Companies that use microfencing correctly can address issues that may limit acceptance. They will see an increase in user engagement by sending relevant information at appropriate times. At the moment, companies in the entertainment and retail business have the biggest opportunity to use microfencing to its potential. In the end, the key to making microfencing work is in creating compelling programs that provide significant benefits to users and for which they are willing to trade detailed location information.

Darren Larson is a mobile developer for Marxent, specializing in iOS and rich online application development.

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Image Credit: Estimote

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