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Magnetic Positioning: Beacon-Killer — Or Beacon-Complement?

IndoorAtlas says its “natural GPS” could complement beacons, however, President Wibe Wagemans argues magnetism is better. Opus Research is impressed.

Wibe Wagemans, IndoorAtlas' President
Wibe Wagemans, IndoorAtlas’ President

For all the retailers wondering whether their shops and businesses need a beacon to help attract and retain customers, there’s another technology to consider: magnetic positioning.

So far, a Finnish company called IndoorAtlas is the main provider. Since its founding two years ago, IndoorAtlas has been making its case about the real-time accuracy of its offering and the limitations of beacons and similar technologies to connect with consumers’ smartphones.

According to an independent report being released today by location analytics specialists, Opus Research, IndoorAtlas’ argument is a convincing one.

Two things are particularly appealing and unique about IndoorAtlas’ magnetic positioning technology: one, it can offer 3- to 6-feet positioning accuracy within an enclosed space versus the vague 40-foot size footprint from a wi-fi signal; and two, unlike a beacon, which can miss a target by 100 feet, magnetic positioning doesn’t require a store to install any third-party hardware on its premises.

The Eureka Moment

IndoorAtlas only does one thing: offer its magnetic positioning system for retailers, warehouses, and map-makers. Like most intriguing ideas, it was developed mostly by accident.

Its founder, Janne Haverinen, was completing a PhD in computer science and engineering at Finland’s University of Oulu. One of his projects was to map interior air quality and temperature using robots.

As Wibe Wagemans, IndoorAtlas’ president, tells GeoMarketing, Haverinen was working in his house and programmed the first robot he used to head north. As expected, it zigged and zagged and couldn’t find its direction. So Haverinen tried again with a different robot. The second robot made the exact same movements. That was the “Eureka!” moment, Wagemans says.

This was Haverinen’s realization: the Earth is enveloped in geo-magnetic waves. The steel structures in buildings distort that magnetic field. In some cases, it causes robots to make the same bizarre movements when told to go north. It also allows a company like IndoorAtlas to map that field and determine the exact location of an electronic device inside a particular building.

Haverinen’s understanding of this “natural GPS” within steel structures was influenced by the work his father had done, which involved designing mining tools that relied on magnetic fields to find ore deposits.

“If [Haverinen] had been telling the robot to go north while in a forest, the robot would move in a straight line towards the north,” says Wagemans. “What happens is, the steel in a building interferes with the compass, causing the robot to move all over the place. But every square foot inside a building has a unique fingerprint that is stable over time. So as long as there is steel around you, you can adjust a signal with near-perfect accuracy.”

Find The Blue Dot

Opus estimates that the indoor location market could be worth as much as $10 billion over the next several years. Its analysts call magnetic positioning an emerging and “foundational” technology within the indoor marketplace. And Opus says IndoorAtlas’ solution has proven it can sustain “consistent accuracy in a real-world major retail environment.”

In terms of how it works, Wagemans calls magnetic positioning a “blue dot” solution. For example, a consumer with a smartphone entering a mall appears as a “blue dot” on a map of the mall’s operator. Again, no wifi or beacon/Bluetooth signal is needed. The phone doesn’t even have to be connected to a cellular network. Within that 3- to 6-foot range on the map, the app knows they’re there.

“Let’s say a person is in a large hardware store and there are four aisles of paint products,” Wagemans says. “The retailer could know — in real-time — how fast they’re moving through the store and if they’re headed in the direction of the paint aisles. If they’re 15 feet away, you can send them a message directing them to the paint aisle. You could send them a coupon offering $5 off a 5-gallon can of paint. You can’t really do that with a beacon.”

Beacon developers may be quick to scoff at that statement. But Wagemans argues that beacons have a very short range of accuracy. They may know you’re in the store, but they can’t tell if you’re standing in aisle 4 or aisle 14.

“With magnetic positioning, you can be more precise in who you target with a marketing message,” Wagemans says. “Bluetooth can only be as precise if you put a beacon on every aisle on every other shelf. For a large, Home Depot-like store, that would require hundreds of beacons all over the store.”

The Values Of Magnetism

A beacon can cost as much as $20, Wagemans says, though he conceded that the devices could get down to 10 cents, eventually. Still, there’s also the costs of maintaining them. The best beacon batteries die after 11 months, he adds. Plus, how many get damaged or stolen and need to be replaced?

Wagemans says other beacon alternatives, such as cameras, Wi-Fi, inaudible sound waves, LED lighting, all have the similar drawbacks when compared to magnetic positioning.

And while he says that IndoorAtlas’ technology is well suited to a big box retailer with thousands of square footage, he insists that even a small 7-Eleven franchise could benefit. The jury is still out on the value of magnetic positioning for smaller spaces, says Greg Sterling, the author of the Opus research and a senior analyst for Internet2Go.

“I think there’s not yet enough empirical data to make a vertical assessment,” Sterlin says when asked about big versus small use cases. “It may be better suited to larger spaces from a cost perspective. I think the idea is that the technology is suited to multiple store types and sizes, however.”

Anti-Magnetism

There’s one thing that can be said for beacons in the area of privacy and opt-ins. Although there are ways around it, generally speaking, beacons do require that a consumer have the Bluetooth receiver on their phone on and that they opt-in to allow a marketer to message them.

IndoorAtlas suggests that its clients do obtain clear permission from consumers before contacting or targeting them, Wagemans says. But one could imagine scenarios where careless or unscrupulous retailers would ignore that hurdle.

In any case, one reason for the apparent rise of beacons is that Apple is behind it. The iPhone maker made a point of heralding the prominence of its iBeacon software as part of the latest iOS 8 package. And as Wagemans notes, two years ago, Apple shut down the API for magnetic positioning to be used in concert with an iPhone’s wifi signal.

It’s not clear why Apple did ceased supporting location developers’ access to its wifi API. Some sources believe that Apple, which issued an abject apology to users when it replaced the iPhone’s embedded Google Maps app with its own flawed, but since improved, map, wanted to pre-empt any other competition in the indoor location space. In any event, Google’s Android still allows wifi on its phones to be anchored to wifi signals.

No Stand-Alone

Overall, the promise of magnetic positioning is clear. But it is likely to be more of a complement to the use of wifi and beacons rather than single solution in its own right. And it does appear to fill in a lot of gaps within the burgeoning indoor location marketing space.

Mobility Ventures' Roman Kikta, an IndoorAtlas investor.
Mobility Ventures’ Roman Kikta, an IndoorAtlas investor.

“One of the key challenges for the indoor positioning market is the lack of indoor maps,” says Roman Kikta, the managing partner and founder of Mobility Ventures, which participated in last month’s $4.5 million funding round for IndoorAtlas. “This has made it difficult for consumers or business users to embrace indoor navigation as an extension of macro-navigation solutions like “Google Maps.”

As for where magnetic positioning fits within existing options for retailers, large and small, “it can and should be used with other technology such as BLE beacons,” Sterling says. “No individual technology out there is right now a stand-alone in terms of coverage or accuracy. Hybrid approaches are required and MP works with others.”

The only real challenges the technology faces are awareness and skepticism, Sterling adds. “Many in ‘the industry’ don’t see how it can work, let alone delivery the kind of accuracy it claims,” he says. “It’s a little like magic to many people. Until they see it in action they remain unconvinced.”

It’s only a matter of time, says Wagemans, confident that being out in front of any other magnetic positioning provider will allow it to chart a wider course that may ultimately take it from an “indoor” solution to an “everywhere” one.

“We don’t have a hand-over with geo-fencing outdoors yet, but it’s on our product roadmap,” Wagemans says, hastening to add that the focus will always remain indoors first. “It’s not so much that magnetic positioning isn’t proven. It’s just going to take a couple of years until we reach mass market. And we see tremendous progress in the understanding and acceptance of what we’re offering every day.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.