Precision marketing uses big data, mobility for insight on consumers

The use of precision marketing, which uses location-based mobile services and big data analytics to gather insight on consumers, is on the rise. The technology enabling this is Bluetooth Smart, which emits low-energy wireless signals that connect with smartphones.

One company that is leading the way in mobile location-based services and precision marketing is Mobiquity. The firm recently conducted a study to find out how beacon technology is working at retail locations and discovered extensive security and functionality gaps in beacon deployments.

Mobiquity is also working at the forefront of mobile payments, mobile apps and enterprise mobility. As the firm explains, "mobile is in our DNA."

Founded in 2011 by Bill Seibel, Mobiquity has the backing of venture capital firms NewSpring Capital, Longworth Venture Partners and Sigma Partners. It focuses on helping firms make the most out of the mobile universe.

Seibel recently shared his thoughts with FierceMobileIT about where the IT world has been and where it is going, with mobility generating the next wave of technological change.

FierceMobileIT: How do you see the BYOD trend impacting the enterprise?

Seibel: Talking about BYOD is like talking about the weather. People have been doing it forever, but there is nothing you can really do about it. It's going to happen. The driver was all about how can we save money by leveraging consumer devices. That didn't play out, and people finally realized that the real set of issues had to do not with financials but with consumerization. People are going to bring their devices. It's going to be hard to stop.

If you look back at client-servers, PCs and other technologies before mobile, every time there was a decision point where people were bringing in their own devices and engineering them for the business, the same debate would emerge. It always ends up that you are unable to stop them; you might as well do the best you can to protect yourself and get the most out of the devices. So BYOD is around making sure there is value in it through backend connectivity, making sure there is the right balance between user experience and security, and putting in controls but not precluding people from using their own devices.

FierceMobileIT: Do you see a backlash from IT around the security issues raised by BYOD and a movement to return to corporate-owned devices?

Seibel: A lot of people in security and IT think their job is to say, "No." The business wrestles with ways to drive innovation and value. The security folks look at it and say, "No." What I've always said is there is a difference between security and risk. Risk is a business decision. When you come up with an innovation, that is always going to involve risk. But the business has to weigh whether the risk is worth the potential return of incurring the risk. I encourage a risk process before you get to the security process, where the business looks at the initiative and decides what the value is and thinks through the potential risk, the likelihood of the risk, and the impact of the risk. If the potential impact is severe enough, then the business should go back and reassess the innovation. It's a balance between acceptable risk and value around an innovation. Then, you take it to security. The job of security is to implement controls to support that decision and mitigate the risk. What doesn't happen enough and what would change the orientation of people on this issue is to separate the issues of security and risk. Risk is a business decision; security ensures that you are implementing the business decision in a thoughtful way.

FierceMobileIT: How do you see big data interacting with mobility in the enterprise and consumer markets?

Seibel: Mobility is about behavior change. If you look at Panera, they want you to eat more; if you look at Weight Watchers, they want you to eat less. If you look at Abercrombie & Fitch, they want you to spend more; if you look at Putnam, they want you to spend less. If you look at healthcare companies, they want you to take your meds or follow an exercise regime. So it is all around behavior change…

Mobile in 2014 and 2015 is forecast to generate 7.5 exabytes of data a month. That amount of data is part of the issue. There is a need to be able to understand the data and drive insights into it. The real advantage of mobile is not just that there is more data, but that there are different kinds of data out there. It's always on and coming from contextual-based sensors, so that you not only understand what the person is doing but the context he is doing it in, who he is doing it with and where he is going when he does it…You get a set of insights and variables that didn't exist before that drives insights like you have never been able to do before. That really allows you to take what mobile can give you--the sensors, the cloud-based analytics, the real-time alerts and be able to leverage big data and analytics to be able to affect that type of behavior change.

FierceMobileIT: What do you see as the future for mobile payments and retail? Do you think of the massive Target breach as putting a damper on the move to mobile payments?

Seibel: Things like [the Target breach] sensitize people to the issue for short period of time, but not for very long. People look for payment methods that provide an increase level of security. MCX recently picked one our partners, Paydiant, to be part of their payment platform. One of the things we liked about Paydiant is that they are able to complete payments by securing the information without sending it to a third party. I think people place more importance on payment platforms like that as a result of a major breach. Also, I think the convenience and the value consumers get will be an overriding factor in how that goes forward. We see a lot of interest in retail, part of that is in payments. We see a lot of interests in beacons.

An area that is interesting is precision marketing, the ability to gather and leverage big data and analytics to be able to get insights on consumers across a lot of different channels and bring them targeted campaigns that will have a much higher chance of driving a purchase decision. One of the things we are working on right now are components of that--some with partners and some on our own--to be able to bring all that together into a platform that would be interesting to retailers.

FierceMobileIT: You issued a recent study in which you found functionality and security gaps in beacon deployments. Can you talk about the gaps and how they might impact companies and end users?

Seibel: There clearly are security issues with beacons. The technology is new. Beacons are easy to install, and you can stick them on something. They are easy to uninstall and put somewhere else. The issues that were uncovered didn't surprise anyone who is focused on driving value out of beacons. One of our partners, Swirl, has a platform for managing those issues. So what we were attempting to do with that study is call up those issues so that people wouldn't purse that opportunity without thinking through the management components that are necessary to be able to secure it and manage it in an appropriate way. We are announcing a partnership with Swirl because they have a solution that can do a better job than anyone else in addressing the shortcomings that the study uncovered.

I think the way any market works is there is a new technology, people get excited about it, people look at how to drive value out of it, but they are not sure how to move forward. As a result, a lot of people experiment with things that don't drive a lot of value. Experiments get discarded and that causes fear, uncertainty and doubt. Then, people step back and think through the management processes and how to drive value out of the technology. Any new technology goes through the stages of excitement, enthusiasm, experimentation, reset and leveraging it to drive value out of it. Not all technologies make their way through all of the stages successfully, but I think beacons are one of the ones that will.

FierceMobileIT: The Federal Trade Commission is looking at the privacy implications of location-based mobile marketing? Are you concerned that they might issue regulations that would clamp down on that kind of marketing?

Seibel: The more visible the opportunities are to harvest information and leverage it to make decisions, the more likely it is that people will take action to control it. Depending on whom you are and your point of view, you look at that as something that is good or bad. We look at it from a demographics standpoint. Younger people are much more willing to share their private information without controls with the expectation that they are going to get value out of it. If you look at a broader set of demographics, you see people who are willing to share their information if there is transparency there that would let them know that it is being shared and what is going to happen to it, rather than a concern that there is something going on behind closed doors. As big data analytics becomes something that has a bigger impact and is in the press, there will be a backlash against it to make sure it's not becoming Big Brother. I don't have any idea what the FTC is going to do on this. It would surprise me if they would look at it, come back and say, "We are not going to do anything." They will probably issue a set of guidelines that would have to do with transparency and the ability to opt out to protect yourself if you decide to do that. They are probably not going to do much more than that.

FierceMobileIT: Do you think location-based services are going to take off?

Seibel: Oh yes. You can use Bluetooth technology to zero in on where people are and what they are looking at. That is the fuel that drives precision marketing; it drives beacons. It allows retailers to be able to set different prices and preferences, as well as different layouts in stores and different shopping patterns. It takes the ability to think through how to engage the consumer at an entirely different level that wasn't there before. The technology is not rocket science, and the opportunity is pretty clear for retailers. There is a value there to consumers, and the whole issue is getting the right balance.

FierceMobileIT: You said recently in an interview that Apple will replace BlackBerry in the enterprise in terms of mobility. Can you explain what you mean by that and why that is happening?

Seibel: I had no idea that my remarks would be so controversial. For me to say that BlackBerry is suffering in the enterprise and for people to see that as controversial, that continues to surprise me. Look at all the data: BlackBerry lost billions of dollars last year; they laid off 4,500 people, a third of its workforce. I saw some data that their share of new activations in Q4 was zero percent, which is pretty low. Their stock price has dropped from $236 per share to between $5 and $6 per share [in December last year]. It is clear to everybody that BlackBerry is struggling and that enterprises are not buying BlackBerrys and activating them to any significant degree. That is not the controversial part of it. The real question is who is going to emerge as the company that can fill that void.

If you look at that from the standpoint of capability and opportunity or interest, I think of companies like Apple when they look at the corporate market and see that as a way to get a much larger share of market than they've had before. When you look at the consumer market, it's a mixed bag where Apple is going to get a share and Android is going to get a share. But if I am Apple and I look at enterprise opportunities and can become the standard for large enterprises, then I have a 100 percent of the opportunity there. If you read their website and how they are talking about enterprise opportunity, you can see that they are really interested in the enterprise. If you look at it from a security and standards viewpoint, Android has a fragmented platform. There are many versions, making it hard to standardize. It is harder to keep everyone on the same version and harder to keep everyone in sync. I think Apple has done a very good job of not only standardizing on a version, but making sure people get upgraded to the next version of the operating system. If you look at the security part of that, today there has still not been a virus that has come out of the iTunes Store. It has a 100 percent safety track record. People continue to talk about issues popping up with Android and security. Android has a more open platform.

Apple has done a lot with regard to device management in later releases. In iOS 4, they did an improvement with APIs [application programming interfaces] that allowed third parties to be able to go in there and provide support tools for IT to be able to control the length of passwords and make a determination about what apps can be downloaded and what apps can't be downloaded and provide other controls for IT. They are becoming more sensitive to the whole cost issue with lower cost devices, bundling iWork for free, and some of the other things they are doing for business users. The key thing for Apple is penetration…

As I roll these things together from a capability standpoint and from a desire standpoint, it seems like Apple has the motivation, the resources and the platform to be able to make a solid run at the enterprise. I think Apple's challenge is that traditionally they don't have a relationship with the enterprise, while Microsoft does. The question to me is how fast can Apple come up the learning curve and understand what defines an enterprise customer as opposed to a consumer and what the enterprises are looking for and continue to put that on their next versions of their platform. They need to understand what the relationship is really about at the enterprise level and attempt to deliver on that. That is what could go wrong for Apple. I think they realize this and want to make sure they handle it in the appropriate way.

FierceMobileIT: How do you see mobility evolving over the next ten years?

Seibel: I'm not a visionary but I am a historian, so I look at whether historical patterns repeat themselves. The bet we made when we launched Mobiquity is that the mobility technology wave would look a lot like the other technology waves. It would start with hype and enthusiasm; people would feel compelled to do something but they wouldn't know what to do. They would experiment. It wouldn't provide much business value and a lot would get thrown away. Just like in every other wave, someone would understand that it wasn't about a standalone solution or an experiment; it was about technology enabling business solutions and processes. Just like when Amazon came out in the last wave with web-enabled business processes. The bet we made was that it would be around mobile-enabled business processes this time. When then happens, everything changes. Projects get to be much more impactful and much larger and more complex. That was the bet we made. We skated to where the puck was going not to where the puck was; that is what is playing out in mobile today. The other thing that is happening is that it isn't just mobile, it is an all-new technology stack. It's converging, it's mobile, it's social; 60 percent of what drives social comes from mobile, 40 percent of what mobile generates goes to social. It's big data analytics; it's the Internet of Things, all the devices that are going to interact with one another. Mobile is portal for that, and cloud is a platform for scalability, security and performance. Those technologies are converging to create a new stack that drives innovation like never before. So Mobiquity means that mobile will be ubiquitous--a platform that will cross every way that technology is delivered...Mobility is a technology that will be embedded and drive everything, from what we wear and drive to what we listen to and watch and what we do.

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