Twitter, Inc. has been scrambling to find ways to monetize its microblog service, and now it may have found an answer thanks to a recent investment in beacon technology startup Swirl Networks, Inc. Swirl announced that it has completed an $18 million investment round that included Twitter Ventures, as well as Hearst, SoftBank and others.

Displaying targeted advertising

Beacons are bluetooth devices that can be placed in retail stores, concert venues and other public places to locally connect with mobile phone apps. They can be used to track foot traffic and location data in real time, and they can also provide locally relevant information to users about nearby restaurants, shops and other attractions.

And, of course, they can also be used to display targeted advertising to nearby potential customers, which is how Swirl’s service works. Owners are able to use Swirl’s cloud-based platform to design their marketing campaigns, and when a user comes within range of the beacon, the service will display a fullscreen ad that can be tailored to the customer’s specific location within a store. For example, the ad could show discounts or coupons for items on the shelf directly in front of the customer.

Beacon technology to grow?

Swirl CEO Hilmi Ozguc admits that consumers may be skeptical about the idea of in-store advertising through beacons, but he believes that the market will come around. “It’s early days, and consumers are still getting used to it,” Ozguc told Business Insider. “It’s a bit like e-commerce when people said, ‘I will never put my credit card online; it will get stolen!’ But as people use it, they will become more confident.”

He added, “We insist on an opt-in experience. You will never get a notification unless you give specific permission. Our market research has found 60 percent open rates [for beacon ads on the Swirl platform] and over 80 percent with some really relevant campaigns.”

Twitter’s investment may show a desire to tie Swirl’s beacon technology to its own location-based advertising, and Twitter would not be the first social media company to test out beacons as an advertising and customer data tool. Facebook began using beacons for its Place Tips feature in a few high-profile locations in New York City earlier this year.

photo credit: mkhmarketing via photopin cc