25 Aug 2014

Real-life pop-up ads: coming to a phone near you

New smartphone technology can pick up adverts when shoppers pass nearby “beacons”. It is government funded, but privacy campaigners are worried about what happens to the data collected.

The UK government is pumping hundreds of thousands of pounds into new technology that allows marketers to track and target mobile phone users, sending adverts direct to their phones and gathering information about their movements and purchasing habits.

The technology employs beacons, tiny plastic transmitters that give out a signal using Bluetooth, a technology built into all smartphones. If a phone’s Bluetooth is turned on and it has the right apps installed, the beacon can be used to push an advert onto it.

The transmitters cost just a few pounds to produce and thousands of them have already been installed across shops and high streets nationwide, with several large-scale schemes launching within the next few weeks.

If we could get something that went ding at the right time just as they were passing, they would benefit and we would benefit. Local business owner

Channel 4 News was given access to one such scheme in Norwich, where IT company Proxama has been given almost £100,000 to spend on hi-tech methods of getting shoppers to visit local businesses and attractions.

Walking past a café fitted with the beacons, an ad pops up on the phone of a passer-by who has downloaded the scheme’s app. Business owners hope it will draw customers in and help them fight the threat from online retailers.

“Often what we see when people walk past is that they’re looking down at their mobile phones, they’re not looking side to side, they’re not looking up,” said Lyn Mcalister, Managing Director of 7 Surrey Street Café. “If we could get something that went ding at the right time just as they were passing, they would benefit and we would benefit.”

Apple is backing the technology, which has been fitted into many of its shops. Recent updates to the iPhone software have turned Bluetooth on, and some estimates show almost nine out of ten iPhone users have it enabled.

The use of Bluetooth is just one example of high street retailers fighting back against the internet on its own territory: technology, writes Geoff White. 

As I've reported before, bricks-and-mortar outlets are hoovering up the signals our phones give out all the time. They hope not only to harvest valuable data about us, but in the case of Bluetooth beacons, to confront us with the right ad at exactly the right time and place. For marketers it's a dream come true.

For the moment, at least, you have to download the right apps for the beacons to work, but the prospect of retrofitting mainstream apps with the technology is worrying privacy campaigners.

There's another issue too: the ad industry is intensely aware that if it inundates users with ads, they'll get huffy and turn their Bluetooth off. But it's still far from clear who'll manage the supply of ads. If there's a street of ten retailers in Norwich for example, how many of their ads will be shown on a user's phone? All ten? Or if the system limits it to five ads a day, which shops will be left out?

They're the kind of questions that always surround new technology, but with thousands of beacons already in place, expect them to become very pressing very soon.

“The key thing about proximity tech like beacons is they’re providing a nice convenient way for an app to be triggered and then the app can do what it does,” said Neil Garner, Proxama’s chief executive. “We’re just giving extra information to the app owner. It’s not a ‘Big Brother watching’ thing, it’s the app owner having a little bit more about where you are and what you’re doing.”

Proxama are one of a handful of companies that have received money from the government’s Technology Strategy Board to install the new technology. RNF Digital Innovation has secured a £500,000 grant and will be using the technology in Bestway cash and carry stores.

But privacy campaigners are concerned about how technology like Proxama’s works behind the scenes.

In order to work out the beacon’s location, a user’s phone has to look it up on Proxama’s computers, which then select a suitable advert to send to the phone. That means they can ensure you do not see too many ads. But it also means the company behind the beacons gets a permanent record of your phone’s unique ID, where you’ve been, where you are, whether you received an advert, and whether you went on to buy the product.

“This is definitely the way tech is going in terms of surveillance on our streets,” said Emma Carr, director of Big Brother Watch. “People are used to having hundreds of cameras pointing at them and they’re told that’s for their safety. What they don’t know is that they could be walking past something and information can be gathered that will then use them as a target for marketing and promotion.”

At the moment you need to download a specific app to connect to the beacons, but the technology can be retrofitted into any app, and some in the industry believe it is only a matter of time before major apps begin to install it.

A spokesperson for the technology strategy board said: “The very nature of innovation means that there can, sometimes, be regulatory obstacles and compliance issues to adhere to. We have every confidence in the government’s regulatory regime across the various industry sectors we support and fully expect those compliance issues to be addressed by the companies we fund.”