Zalim Nastaev TeriMobile, Head of Marketing Department What is Bluetooth Marketing?

As another innovative way to complement traditional marketing techniques along came Bluetooth marketing. This new concept has been in practice for not so long, and needs to get more attention from the consumers and marketers to start evolving in more or less significant scales. We aim in this brief article to disclose the basic features and trends of Bluetooth technology as a marketing communication tool, so the consumers should be made aware of the technology, and improve their thinking of it, or make it even more negative, if you like. The Rise of Bluetooth Bluetooth appeared as a result of the work of a development group consisting of the representatives of several telecom giants: Ericsson, IBM, Intel, Toshiba and Nokia. These companies combined their resources to create a unified technology for wireless connection of mobile devices. Some time later the group working on the project (The Bluetooth Special Interest Group the Bluetooth SIG) expanded, companies like 3COM/Palm, Axis Communication, Motorola, Compaq, Dell, Qualcomm, Lucent Technologies, UK Limited, Xircom entering the group. Today, the group combines the efforts of as many as over 4000 companies working on the development of a free and open specification of Bluetooth. This unified work has created the main advantage for Bluetooth it is now supported by most of the mobile devices that are produced nowadays. Another advantage when compared to, say, IR signal, is that the users can exchange data through radio waves without setting a direct visible contact. Today, penetration of Bluetooth into mobile phones in EU, for example, is at a rate of 35% 42%, while up to 2008 it is expected to rise as high as 80%. 2006 was the year that Bluetooth Penetration reached the One Billion mark. IDC forecasts that by 2007 more than 433 million Bluetooth devices will ship worldwide, which is an estimated market penetration of 74 percent. Bluetooth Location-based media distribution also took a major step forward. The Rise of Mobile Marketing In that early period of initial development of the technology nobody would have thought of using Bluetooth as a marketing tool. Traditional media were striving and dominating the marketing communications, while various viral campaigns were just taking their first steps. However mobile technology was taking a rapid growth and along came agencies offering mobile as an alternative media to TV, radio and print. The growth was so fast that the penetration level of mobile channel has exceeded the Internet. Thus, the advantage that the mobile advertisers could use was the reach to the end consumers. But the major advantage was, of course, the targeting opportunities the personal nature of the mobile devices became a grand, longawaited opportunity to develop personalized communication programmes, and the two-way nature of mobile channel gave the opportunity to create the interactive communications, where the response of the communication target is valued even higher than the messages originated by the advertisers. Some opponents would argue that the mobile marketing is just another threat of spamming none can be assured that the companies would not start sending out messages of no interest to every single mobile user who has no interest in their services. Do they make sense? On the first glance, this threat is possible. However, lets look at this problem from a companys viewpoint. None knows how much time and how many efforts brands allocate to create a positive image with the customers. And everybody knows that this image can be spoilt in just one minute - just a trifle, small mistake, and the rumours go viral. Next day you have to start all over again. The brands do realize the danger of delivering messages to mobile users without any system. The mobile marketing players have learned the lessons of its elder brother Internet and email. The Mobile Marketing Association and a number of other bodies were established to consolidate the mobile industry players. The latter are in close contact with each other, discussing the issues arising during their activities. This consolidation and collaboration has changed the traditional way we look at the industries: and this way has the name mobile players are working within the so called ecosystem, where technology and content providers, brands and agencies, aggregators and operators work in close collaboration to stimulate the growth of the industry. What is more, mobile devices are always on, which makes the consumers reachable no matter where they are they need no access to TV sets, Internet or whatever else you name it. One more: the mobile campaigns proved to create much higher response rates. Finally, the mobile marketing programmes were so much less costly to create. Seeing all these advantages, many marketers started turning their attention to this sphere. Bluetooth Marketing as it is Alongside with the mobile marketing (which basically includes text and MMS messaging, content delivery, mobile internet and mobile video) the agencies and brands have started to show some interest in using

Bluetooth as a communication tool. This sphere, however, has not been developing as fast, due to the ambiguity of implementation of Bluetooth marketing campaigns. The Bluetooth marketing practice that has been implemented by various agencies so far gave rise to rather agitated discussions. The supporters of Bluetooth marketing are attracted by the fact that they receive location based and time-relevant information, discounts that can be used right the moment they are provided, and, unlike with mobile marketing, the communication is cost-free for both advertisers and the audience. Their opponents argue that all the obvious advantages will offset one major drawback: bluecasting is intrusive and annoying, and people will hate receiving unsolicited messages delivered to their mobile phones. In the end, this way of push bluecasting can be perceived as something as dangerous as bluespamming. Naturally, both the sides make reasonable points, and this new media, just as sms marketing, demands increased cautiousness from the marketers. The latter should not be tempted by this cheap opportunity and spam all the passers-by with the standard messages. In the end it is personalization that is the most advantageous criterion of location based services, and sending the same message to everybody passing by is the way to become an aggressive intruder into peoples privacy. Since the legislation has not been fast enough to catch up with the development in the wireless sector, players in some industries (as, for instance, mobile marketing) have consolidated to introduce the necessary regulations to stimulate continued growth. Just for the same reasons caution has to be taken, and certain reasonable regulations must be imposed on the players in Bluetooth marketing sphere to prevent the aggressive image of this young industry and make it more positive in the eyes of the mobile users, which will in the end benefit all the participants. Security Another major idea hindering the development of Bluetooth communication is the security concerns. Although this is the area where the SIG group has focused its most resources (and especially with the mobile phones), the people are not ready yet to accept the idea of absolutely secure Bluetooth communication in the public places. To a certain extent the pessimists have their reason to be pessimistic. However, those who follow the simple rules of using Bluetooth in public, should not be worried of being put to danger of receiving harmful files. The thing is that the mobile producers have found the ways to prevent all sorts of hidden attacks from all kinds of violators: bluejackers, bluesnarfers, bluebuggers. Today, only the older models can be hacked without the users knowing and giving authorisation to connect to their phones. This means that a mobile user can control his communication process whether he/she wants to accept or cancel the connection it is up to an individual user to decide. I do advise to keep ones Bluetooth off or at least in the hidden mode as long as he/she is not intending to send or receive files. And I do advise the advertisers to not narrow their communications to solely Bluetooth channel. The latter should be accompanied by a traditional media (say, outdoor posters inviting passers-by to turn their Bluetooth on to receive a beneficial offer). Thus, the user knows exactly when the necessary communication may start, and who the sender is. Business Models Lets have a look at what we have observed so far in this industry: A number of Bluetooth marketing agencies have appeared on the market to fill in the demand on the location based services. To offer their services to the customers the agencies have chosen several types of business models which, along with the advantages in the face of the competition, have certain drawbacks which hinder the development of the industry and the growth of demand. The first business model is the pure selling of the Bluetooth communication devices. This option allows marketers to send out specific messages to the passers-by. This model is meant for the smaller businesses that show their interest in integrating Bluetooth channel to their overall communication strategies. Small companies are budget-sensitive, therefore, they can be attracted by the perspective of minor investments into the communication process. Besides, this communication will allow to more efficiently track the ROI the opportunity to track the number of messages sent and the number of visits prompted by the messages. There is a major disadvantage that we can predict for the customers within this business model. This is a purely push model, and there is no chance for the company to send targeted messages. If a company in, say, a retail business starts sending out messages to passers-by, there will be a certain percentage of the receivers annoyed by being disturbed. This intrusiveness cannot be prevented in any efficient manner with this push-based model. Therefore, marketers should be careful using Bluetooth communications this way. One way out is to offer very significant rewarding to the receivers, which is never efficient for budget-sensitive companies. On the other hand, companies in some specific industries will feel more or less free to send out messages to the audience (e.g. sending various information messages to participants of a conference, since the audience is supposed to have similar interests in certain spheres). To some extent the outdoor and print advertising warning people about

Bluetooth communication area would help both in lowering dissatisfaction by intrusiveness and increasing the reach to the customers by prompting them to switch the Bluetooth signal on to receive certain beneficial messages. Another business model offers full outsourcing of Bluetooth communication campaigns. This means that the agencies allocate their resources to design complete Bluetooth communication programmes for the client to integrate them into the overall communication strategies of the brands. This model is advantageous for the bigger businesses that find financial resources to outsource communication campaigns to experts while concentrating their own resources on their core competencies. In this case I would advise the brands to be careful selecting their partners for this type of communication.

To conclude the above text, I believe that Bluetooth, with its certain advantages, needs some time to accept the shape that will convince the sceptics to try it out along with the todays supporters of the service. And I know that this moment is not too far off now. This has to become a trend in the end both the consumers and the brands have been longing for the opportunity to provide and to receive the services they need exactly where they need them and when the need them. Bluetooth communication has to become interactive, personal and secure for people to unanimously accept it. The industry has not yet been ready to meet this combination but I believe that with the technology development it is just a matter of time - little time So, lets wait some little time to enjoy the services that Bluetooth marketing is preparing for us in the nearest future.