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Bluetooth Marketing

Bluetooth Marketing

Marketing is always a challenge to develop product or brand recognition. Many companies use what we refer to as saturation marketing, basically saturating every possible media with ads for the product or brand. It is more of a shotgun approach, expensive and typically not target specific. Can bluetooth marketing replace all of that ? Certainly not. However there is a niche where Bluetooth Marketing does fall into place as a very cost effective method of marketing to mobile users. Below you will find some typical bluetooth marketing business models based around the VAR (value added reseller) model. We have many clients operating successfully using this model. However a new bluetooth marketing model has emerged and is gaining ground. The new model is the concept of securing high foot traffic areas and installing remotely controlled Proxiblaster BlueCastBoxes, then selling out of home advertising on these networks . Unfortuantely we do not have any financial information about these networks at this time, however we have been told that there is an advertiser market for these networks.

Bluetooth Marketing Comparisons:

Based on monthly costs over a 3 month campaign

	Bluetooth Marketing* *	Direct Mail	TV / Radio	Print Media	Web / Internet Pay Per Click
Time to market	15min	30 days	30 days	30 days	1 - 2 days
Acceptance	3% shotgun*	.5% Shotgun*	.1% Shotgun*	.15% Targeted	.4 % semi targeted
Average user contact	30k per month	10k per month	280k per month	25k per mo	5k per month
Average Acceptance	900 people per month	500 per month	2800 per mo	375 per month	200 per month
Cost over 3 months	$133 per mo	$1500 per mo	$20k per mo	$1500 per mo	$433 per month
Cost per person	$0.14	$3.00	$7.14	$4.00	$2.16

*Shotgun - blind advertising without signage or targeted audience, rates increase up to 25% when signage and or targeting is employed
**Based on purchase of a BlueCastBox versus paid services to alternative advertising methods

Bluetooth Marketing for literally pennies per day

Why Bluetooth Marketing?

• Low Cost Effective Initial Cost
• Cost Effectiveness Increases with time
• Unique Market Impact
• Mobile Marketing is the fastest growing marketing sector
• Bluetooth Marketing is the lowest Cost Mobile Marketing Method
• Viral implications (ads can be shared from phone to phone)
• No Cost to the end receiver

So what does all this mean to the entrepreneur?

Obviously there is substantial room create revenue streams from Bluetooth Marketing, the key is to identify the correct business model and price structure that makes the decision obvious to clients. There are several different business models but the bluetooth marketing business model we recommend is described below. We are aware of other models but the only one we have seen that is effective is the business model below. After providing the hardware and network solutions for the past few years we can offer our experience and our clients experience to identify the best working business model for bluetooth marketing.

Recommended Bluetooth Business Model:

The most successful Bluetooth Marketing Business Model we have seen to date is what we call the VAR model. The VAR model to those of you familiar with it is the Value Added Reseller business model. Typically our clients are Advertising and Marketing companies that purchase our hardware, then add value to our products by producing the actual ads (creative), supplying the hardware to broadcast the ads and management the campaigns (usually remotely). This end to end solution is then leased to the VAR client as a complete solution similar to other broadcast media. Most often this lease is based on a contract that defines the length of service (typically 1 yr). The VAR will usually recover his hardware costs in the first 60 days. These VAR clients will normally target large footprint retailers and restaurant chains for deployment as these VAR clients are not interested in purchasing their own equipment and managing it, they want to write a check, approve the ads and start broadcasting with all other responsibilities falling on the VAR. As a manufacturer of Bluetooth broadcasting products we have limited knowledge of the charges that the VAR clients are paying the VAR but due to the very limited availability of data for Bluetooth Advertising, it comes down to what the VAR Client will bear against how many locations the VAR client has. What we have seen on average is $200 per month per bluetooth broadcasting point and 4 ad changes per month.

Based on $200 per month per unit it only takes the first two months to pay for the hardware purchase, after the first two months the VAR profit margin jumps to 90% depending on what he is paying his employees for ad creation and campaign management functions. You can also generate up sell charges for additional spot ad changes, or offer discounts in return for ad time on the VAR client machine if the machine is in a high foot traffic area. You could also perform analytics for additional up charges, define volume of foot traffic against time of day, acceptance rates based on day date time. Additional revenue can be generated by adding in SMS messaging as part of the campaign and also for signage to offer a "call to action" enticing users to turn on bluetooth and receive what is being broadcast . The opportunities are simply endless.

So how much can a company make?

We will make this easy and base it on a small footprint client with 20 locations. We will assume the conventions based above using a $200 per month per unit with 4 updates per month model. We will base it on a 6 month contract for the 20 units.

Hardware Cost for 20 units	$7,980.00
Cost for updates ($15 hr x 8hrs per month)	$720
Total Cost for 6 month deployment	$8,700.00
Revenue from 6 month lease agreement	$24,000.00
($200 per unit per month)
First Deployment Gross Profit	$15,300.00
Profit Margin	64%

Wait, it gets better!

Now for the next 6 month contract, since the first contract paid for the units the next 6 months look like this:

Hardware Cost for 20 units	$0
Cost for updates ($15 hr x 8hrs per month)	$720
Total Cost for 6 month deployment	$720.00
Revenue from 6 month lease agreement	$24,000.00
($200 per unit per month)
Second Deployment Gross Profit	$23,280.00
Profit Margin	97%

Bluetooth Marketing Business Model Summary

Value Added Service are where the money is made, reselling the hardware and offering the client use of the control panel is not profitable nor is it advisable as there are many pitfalls to deploying successful campaigns. However a VAR capable of creating ads and managing campaigns can provide an end to end solution with a strong profit margin while offering a service that is far below competing pricing structures. The benefits are clear:

• Low Investment Cost
• Residual income
• Fast ROI
• Extremely High Profit Margins
• Ease of use
• Ease of deployment
• White Label
• Affordable and attractive to clients

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