By Alex Romanov

When historians look back on this commercial and cultural period, they will likely describe it as a time when the barriers between the physical and digital experience began to erode.

One of the hallmarks of this period will be the blurring of the lines between marketing channels, and the convergence and evolution into something new.

Today, location awareness and mobility have added context to even the most ordinary actions, while social media and the mobile Web have added a layer of immediate human connection to seemingly straightforward commercial transactions.

Point-of-sale signage has begun to incorporate interactive mobile communication capabilities, empowering consumers with relevant, actionable information in real-time retail settings.

This era is being ushered in by companies that are combining these technologies to effective marketing ends, and in the process creating limitless opportunities for revenue generation and ROI for consumer-centric businesses that engage in these practices.

Proximity marketing

In one arena, in particular, the efficacy of multichannel marketing is on full display: an interactive medium known as proximity marketing that combines digital signage with mobile technology.

Previous technologies have attempted to leverage static delivery methods such as text messaging that essentially are spray-and-pray methods that scatter an ad to as many people as possible in the hope that a small percentage of consumers will absorb the message and possibly take action.

Though certainly innovative for their time, text message marketing and other static outreach methods historically have not generated substantial or consistent ROI.

Proximity marketing, on the other hand, is predicated on the fact that the demographic is already optimized.

The messaging associated with this technology is delivered to consumers in a specific and ideal location – as near as possible to the point of sale, or inside a retail outlet, for instance – and consequently these consumers are in the ideal physical location and mindset to complete a transaction.

This, for marketers, is the perfect audience: consumers who are primed and ready to receive messages and to act on them.

Just DOOH it

Cultivating this perfect audience, which is a feat only possible with proximity marketing, reaps substantial rewards for retailers and other enterprises that engage in these techniques.

Stellar results in proximity marketing are possible both because of the growth of digital-out-of-home media – DOOH, which includes digital signage and larger-format media such as digital billboards – as well as the continued proliferation of mobile devices and the general public’s familiarity and willingness to use them for commercial purposes.

Coupled with mobile and proximity technology, multichannel DOOH networks provide marketers with the ability to deliver content in a contextually relevant environment and at moments of maximum influence.

This puts DOOH on an explosive growth trajectory. Most industry analysts are projecting global digital out-of-home media revenues to rise substantially in 2011, including as much as by 16.9 percent, according to PQ Media.

The mobile element in proximity marketing’s success equation is well documented.

According to recent figures, 85 percent of U.S. consumers over 18 now own a mobile device of some kind. The average consumer who owns a mobile phone spends nearly three hours a day on it.

This means that marketers have a great opportunity to reach consumers through mobile interactions, as has been demonstrated by the growth in mobile advertising, mobile applications and text message marketing.

The power, capability and reach of smartphones, now commonly found in the hands of U.S. consumers, set the stage for increasingly advanced marketing techniques, including those that bridge the gulf between a consumer’s physical location and the digital marketing messaging they receive.

There is a third factor influencing the growth of proximity marketing, and that is the gradual removal of the technological limitations that have hampered the strategy’s effectiveness.

Just a few years ago, a mobile device with location awareness might have been considered an outlier.

Additionally, 100 percent of smartphones are Bluetooth-capable, meaning that they can communicate with other compatible devices within a certain range of distance, such as with an interactivity-enabled digital sign within 300 feet.

The technology that enables these systems has also evolved considerably in the last few years.

While digital signs have been around in some form since 1987, the ability of DOOH media to communicate directly with consumers has only developed recently.

These advances in technology, coupled with the growth in DOOH and the evolution of consumer attitudes and behavior in mobile device usage, have combined to create a fertile ground for proximity marketing.

It is in this ground that retailers, restaurants, convenience stores and other businesses have planted the seeds of revenue growth.

Building business intelligence

Proximity marketing also redoubles the efficacy of static forms of marketing through its ability to quantify and collect detailed information about consumers.

Market research has always been a central component of any marketing and advertising strategy.

Knowing who and what comprises a given audience and consumer base is integral to any campaign’s success – or, for that matter, the success of a given business.

Proximity marketing unifies the message delivery and the information collection. It is a marketing tool that measures consumer response to advertising to gauge promotion effectiveness in real-time.

And thanks to the significant amount of non-private information available on smartphones, proximity marketing is able to collect information to help marketers build an accurate profile of the behavior and preferences of the targeted demographic.

Better still, this data is constantly adjusted based on new information that is being received, both from the existing audience and from new users entering the pool.

This provides the most up-to-date and well-rounded snapshot of the demographic, which will only be fine-tuned more the longer a campaign runs.

It is near

Proximity marketing is indeed a profitable tool for businesses, but it is also changing the way that consumers engage and interact with a store, brand or product.

It is generating new revenues for companies, yes, but it is also hastening a cultural shift wherein consumers and individuals expand their experiences to include both physical and intuitive encounters, and a companion digital experience.

Much in the way that social media has engendered this shift for interpersonal and non-commercial experiences, proximity marketing represents an entirely new way to take in the commercial experience.

It is, as a recent article in Mobile Marketer put it, creating new context for the mobile world.

That context is being built by proximity marketing, the very embodiment of the future of marketing strategy.

And when those future historians look back on this time, they will confirm that the future is indeed now.

Alex Romanov is founder/CEO of iSign, a Toronto-based interactive marketing company specializing in mobile and digital out of home and digital signage. Reach him at [email protected].