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Meet the network creating the offline version of cookies

proximity technology proximity technology
Photo credit:

Penn State

Wouldn't it be great if retailers could track the behavior of their customers even when they're not in the store? Well, now they may well be able to.

Before January had ended, 2015 was already an interesting year for Norwegian tech startups.

It’s not often that any company is acquired by one of the most high-power celebrities globally, let alone a small business in Oslo.

But that is exactly what happened when music streaming service WiMP (later known as Tidal), was acquired by Jay-Z on January 30th.

The company which is a competitor to Spotify, Deezer and now Apple Music, was bought for $56 million.

Before it had been acquired, the duo which ran the commercial arm of the business, left to launch their own startup.

You would imagine that Thomas Walle, who worked with distributors, and Kjartan Slette, who oversaw supplier relationships, were ruing their decision to leave when they saw news of the acquisition.

However, their new company is off to a rather promising start.

Unacast, which is its name, claims to power the world’s largest network of proximity data, enabling brands and retailers to retarget customers online based on offline behavior.

In it’s own words, it is solving the following problem:

“As soon as the customer leaves [a store or venue with a beacon], he or she becomes invisible, until they resurface in the same location. What the customer did before and after the visit is unknown.”

Investors must think the problem is interesting enough as the business has raised $1.6 million in seed funding since launch, and was recently announced as the winner of Best Nordic Newcomer at the Nordic Startup Awards.

Hot Topics caught up with Kjartan Slette, who is Unacast’s COO, to discuss the potential of proximity technology in advertising.

“Me and Thomas are both highly commercial. We cut deals and then we build what the market is looking for. We don’t sit in the basement for two years and hone the perfect product, we go out and sell.”

An interesting stance in a technology industry which has become increasingly product focused.

The commercial opportunity, or market need, in this instance is the gap between offline and offline in terms of understanding customer behavior.

“We want to be the company that bridges the offline and online gap and creates a unified customer view. That is something that Google, Facebook, media companies and ad networks can’t do. It’s a huge monetary opportunity.”

Given the size of the Scandinavian market, it is important for businesses in the region to think globally early on in their existence. The Nordics countries can be good test beds but they lack the population required to gain enough critical mass to create a really big business.

Unacast, which is trying to build a global proximity technology network, was no different.

“This is a global play, it doesn’t make sense to focus just on the Nordics, or on the UK, or anywhere else. It makes sense to focus on the entire globe,” Slette said.

That international focus is reflected by the launch of offices in New York and London within the business’ first year of existence.

That’s fast by anyone’s standards.

So why is now the time to create a network based on proximity technology?

“The bigger retailers, the major airports, even cities, are deploying beacons now. If you look at the US, 50% of the top 100 retailers are using proximity technology in their stores. It will be 85% by the end of this year. 2015 really is going to be a transitional year where we go from smaller pilots to commercial deployments.”

Slette believes that an important part of this will be an awareness among the public of what proximity technology is.

“Right now it’s something that exists in the tech press, but the end user hasn’t really experienced proximity technology. That will happen in 2015.”

The importance, or power, of proximity technology lies in the improved data it creates about customers.

And it is not just a potential advertising play. Slette explains.

“We work with a big UK car brand and they’re not seeing this as an advertising tool at all. They have seen that more and more car transactions are being carried out online but when you buy a car you still want to test drive it at the car dealership.

The problem is that right now they can’t track the link between the car dealership and the online purchase. Currently those two worlds aren’t connected.”

The issue is that there are already over 200 proximity companies deploying hardware and software for retailers alone.

Or in other words, it’s a fragmented market and the data is caught in silos.

And that is where Slette believes Unacast’s network approach becomes particularly interesting.

“We are partnering with these companies, effectively becoming their back end, to facilitate the journey between online and offline. We integrate technically with all of these proximity technology companies and then all of the ad platforms.”

That integration requires a lot of heavy lifting, from data harmonization, to privacy regulation. All of which Unacast takes away from the retailer.

“We will be able to see a customer’s journey from Gatwick airport, to Regent Street, to H&M for example. It will create something akin to an offline cookie.”

So if Slette and Unacast can execute their plan, there will be no escape for customers.

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