Consumers nowadays are demanding greater value from advertisers in exchange for their time and attention, with advertisers in turn seeking greater proof that they’re reaching the correct audiences and getting the bang for their buck.
As online advertising is now measurable in ways that were impossible compared with traditional media many years ago, this makes evaluating success more clear, but on the other hand highlights the failures and as platforms increasingly diversify, delivering successful targeted brand messages becomes more and more difficult.
So where does this leave advertisers? According to Google, 4 in 5 active consumers use search engines to find local information while they’re going about their daily business. It’s at this precise moment when the consumers’ optimum receptivity is riled and they’re open to receive branded messages and this is where advertisers need to align themselves.
One particular area of advertising, which is taking advantage of this receptive moment, is the use of NFC in both Out-of-home (OOH) and digital out-of-home media (DOOH) advertising. Both media use strategically placed, signage displays to reach active, on-the-go consumers with highly targeted messages in venues such as shopping centers, transport areas etc.
So what exactly is NFC technology and how does it work?
NFC, which is a contactless technology, stands for Near-Field Communication and helps connect the physical and virtual worlds by short-range wireless communication technology by allowing phones, tablets, and laptops to share data with other NFC-equipped devices. Evolved from radio frequency identification (RFID) technology, an NFC chip operates as one part of a wireless link. Once it’s activated, small amounts of data between the two devices can be transferred when held a few centimeters from each other.
NFC technology is not new and Sony and Philips first submitted it as a standard in 2002. In 2004, they both partnered with Nokia and established an NFC forum. Two years later, the first specifications for NFC tags were created. An NFC tag can be a sticker or small item that is embedded with a chip and antenna.
THERE ARE TWO NFC MODES:
Both devices generate a radio frequency field and exchange data. This mode is also known as Peer-to-Peer (P2P) e.g. two phones tapping and sharing information and unlike Bluetooth requires no pairing.
A passive device, such as an NFC tag or smart poster (with an embedded NFC tag), contains information that other devices can read but does not read any information itself, so there is only one active user.
NFC has gained popularity over the past few years, especially in the payment and retail industry and has a huge potential for a lot of the commercial industry. However, there are lots of similar technologies out there for NFC to compete with particularly QR codes and iBeacons, and to a lesser extend RFID and GPS so why select NFC as your marketing technology?
First lets compare QR codes; like NFC they’re also a form of wireless technology to transfer data and link content. Every smartphone can potentially read a QR code with a downloaded QR Code reader app. Once the app is opened and pointed onto the 2D code, the app scans and decodes it. An NFC compatible smartphone on the other hand is faster as the action is automatically triggered when the phone comes within 10 cm near the NFC tag and you get instant access to the content on mobile without a single click. QR codes can contain small amounts of information with limited data size, so the more data that is encoded the greater the chance of errors when the code is scanned. NFC is capable of communicating larger amounts of data, and is less susceptible to other problems affecting QR code scanning such as poor readability in low light. Currently over 50% of all smartphones are NFC-enabled and according to IHS Technology it is predicted 2.2 billion new handsets will be shipped by 2020.
NFC and iBeacon are two of the most popular technologies today when it comes to “contactless payments”. While both allow for data transfer via proximity and P2P payments, they differ in their basic working and the hardware infrastructure they require. This leads to varying degrees of accessibility, security and accuracy between the two solutions. Beacons power wireless data transfer by consuming small amounts of power by continually relaying a discovery signal that is received by BLE enabled smartphones within a 70 meters range. In order to receive signals from a beacon, Bluetooth must be turned on. Beacons essentially allow a one-to-many experience whereas NFC is a one-to-one experience and the user must first identify the tag. In the case of a BLE location system, beacons are mostly battery-powered and can be configured with the help of a mobile app making them scalable and highly portable. However, because of battery usage they need to be checked regularly.
Where the iBeacon probably powers forward is from a marketer’s point of view; it can more or less be used for a lot of the same types of advertising as NFC tags but it gathers a lot more information about the consumer. But this too can be a negative, from a customer’s consent point of view there can be a level of brand spamming and this can lead customers to turn off the Bluetooth capabilities on their phones because of privacy concerns. Although NFC technology is set to be one of the most common services available for future mobile payments, the level of adoption varies, in Eastern countries, it tends to be on a national level, whereas in Western countries it seems to be more localised, with merchant readiness and acceptance low probably due to the fact that there currently isn’t enough payment terminals equipped with NFC technology and without the infrastructure in place, leading to consumer acceptance and usage being disrupted. Japan, however, already has much of the infrastructure in place. NFC services for transportation and vending machines are already common in Japan using FeliCa, an older NFC-like system from Sony.
There have been numerous campaigns and initiatives used to promote NFC contactless payment in the last year in an attempt to increase peoples awareness and trust of the technology. Visa Europe launched a 3-month pilot campaign in March 2016 called “Cashfree and Proud”, telling British cardholders they could make a Visa contactless payment with confidence. This campaign was part of Visa UK’s long-term strategy to make cash ‘peculiar’ by 2020.
But it didn’t stop there, Visa as the exclusive payment provider at the Rio 2016 Olympics introduced NFC-enabled payment rings 6 (which did not require any batteries) for all the Team Visa sponsored athletes and Visa UK teamed up with Barclaycard after they developed an NFC wristband which they provided to all the British athletes and support staff so that they could make and purchase food, souvenirs etc. through any of the 4,000 NFC payment points in Rio.
Malibu is also seeing an opportunity to capitalise on consumers’ “contactless payment behaviour” by turning 40,000 of its bottles into media platforms using NFC tech, offering Android and iPhone 6/6s consumers access to exclusive content such as prize draws, drinks recipes and playlists, as well as a bar locator by tapping their smartphone on the ‘sunset’ logo on the bottle, which opens a mobile browser leading directly to the content. The campaign was created after research by Malibu found that consumers were increasingly looking to buy “experiences and not products” allowing the brand to connect with its consumers more intimately. “This is not a PR stunt. Success isn’t necessarily about the numbers, it’s very much about gaining exclusive insight on how consumers react to new tech and exploring the boundaries of where technology can go.” said Jo Alexander, Malibu marketing manager at Pernod Ricard UK.
Leap Cards have also developed an app for NFC enabled smartphones, which allows you to instantly Top-Up your Leap Card, check your balance and collect pre-paid ticket. This opens up a whole new avenue for tourists and work has already been underway for the last two years to develop an “NFC Smart Tourist Card” (SMTC). The Dept. of Enterprise Engineering, at the University of Rome started developing an NFC SMTC which acts as a “Mobile Travel Assistant” for tourists by assisting them in the planning of their trips, both during and after and improving the whole travel experience. For example in one of their case studies that they carried out, they provided a range of related services with the selected application scenarios to an American tourist visiting an airport and museum. He was supplied with the download NFC SMTC App on a smartphone.
This then provided him with the following;
- Access to geo information relating to the closest local transport;
- Access to geo maps to orient himself inside the airport;
- He could share his location on social networks and other platform;
- Consult interactive travel guides and useful numbers;
- Mobile Ticketing and mobile payment options;
- Location Based Service (custom routes);
- Membership card: possibility to accumulate points based on the type of ticket purchased, and receive discounts on additional services (such as restaurants, public transport, shops, hotels).
The study illustrated how the telecommunication operator, through appropriate cooperation strategies with the tourism industry and local authorities and businesses, could offer services, content and value-added resources for both B2B and end-users, thereby contributing to economic and development of the tourist industry. NFC technology has numerous other applications outside of contactless payment for both personal use and for marketers. From simple things such as replacing the process of writing down Wifi codes for visitors to your home by using Trigger, or long-press on the Wi-Fi network to write the Wi-Fi network information to an NFC tag that anyone can tap to connect to your network instantly. You can electronically generate business cards by creating a tag and writing your contact information, social media details, websites and any other relevant information to it. With tags you can put more information than you would on a traditional card. More professional looking NFC Business Cards can be purchased from sites like Moo if it is beyond your skill set.
The applications for marketers are endless and some of the biggest companies worldwide are embracing the technology while others are trialling new and innovative ways of attracting consumers. One exciting area is NFC Smart Clothing as well as jewellery. For example two companies; Thinfilm, and Sarine Technologies, are partnering to bring NFC to Diamonds. NFC tags will be printed and will display the profiles of individual diamonds such as its history, measurements, grading along with other relevant information. There is already online profiles, but not directly connected to a diamond itself. The aim is by using NFC tags they make the information more accessible to wholesalers and commercial buyers. By applying NFC tech to these products; clothing, jewellery, wearable’s etc. it provides a dual benefit; protects the consumer by providing authentication and anti-counterfeiting measures, context sensitive digital content, after-sales service and customer intelligence for the companies involved.
So the more and more companies are using this technology, the more and more exciting ways it is being utilised and tested.
In 2013 fast food giant McDonalds in Singapore launch ‘The Happy Table’ campaign using NFC technology with a new in-store mobile game that was activated when a user placed their device on one of the tables. The game was targeted for children. Why and what was its purpose? Well McDonalds marketing research team identified that in Singapore real estate is scarce and expensive so there are very few playgrounds and by providing this resource children could play while eating their “Happy Meals”. What did McDonalds get out of it? They in turn saw an increase in foot traffic and an increase in frequent visits and the longer people stayed in store the better chances they had for more upsells. They plan to roll this out to all of Asia in the coming year.
We are now seeing more and more interactive outdoor media and the movie markers are using NFC technology to attract cinema goers earlier by providing teasers and information on Blockbuster movies. The X-Men poster was a case in point where they had NFC tags and by holding your phone to the posters you could see the trailer automatically. These types of posters are being used more and more in OOH Marketing and can be designed to trigger a series of actions such as purchase and download a song or e-book, receive a coupon or special offer, buy tickets to events, or “like” a brand on Facebook, for example. So as we witness the many big brands like BMW, Google, Nikon to name but a few, experimenting with NFC technology, you will always come across the weird,wonderful and amazing.
Meow-Ludo is one of those weird and amazing cases. He belongs to a movement of people who are integrating their bodies with technology and he has implanted an NFC chip in the back of his thumb. If he holds his thumb to the NFC reader on his smartphone, it can detect his business card the chip is carrying and he can also reprogram the chip to carry out other basic tasks. He is currently working with technologists on a project to facilitate financial transactions through the chip with just a tap of his thumb on a store’s contactless payments reader.
“Such chips he feels could eliminate some of the mundane items of daily life such as carrying keys and a wallet. It could also allow a supermarket to tag you as you enter and every food item you select would be NFC tagged. The transaction would be completely automatic. If these chips become smarter, their potential could be immense” he says.
He talks the potential of the chip being connected to health sensors such as detecting blood glucose or heart rate, or if connected to a Fitbit you could get all your health readings.
However, the technology obviously needs further development as his NFC chips can only hold small amounts of data and it would need to increase in capacity. While Meow’s idea sounds crazy and like something from Space Odyssey, testing is currently taking place in America by scientists who have developed a fluorescent sensor to detect glucose levels for people with diabetes using NFC technology. The sensor can be inserted subcutaneously into the upper arm, and is read by a wearable transmitter. The wearable transmitter is programmed to wake up the sensor via the NFC front-end, send commands that enable measurement through glucose sensitive fluorophore and then enable display of the calculated glucose value. The uses for NFC technology is growing by the day and more exciting and novel ways of utilising it are being published daily. The potential for marketers to target their audiences in a quick and responsive way are opening up hugely as people start to embrace technology more. That said people are very weary of technology and worry about it.
Threats and Consumer Acceptance
Any new technology poses risks and while there have been numerous successes using NFC technology there has also been failures or impractical uses of it, particularly in the contactless payment field. For example the London Underground (LU) is using NFC for their transportation services in combination with Oyster Cards, which uses radio frequency identification (RFI). Processing speed in the payment system is vital as so many people are using the public transport and LU have determined that NFC is not currently fast enough to meet these needs. Many consumers are still very hesitant to use the technology and those offering contactless payment as a solution need to overcome the security problems, be them real or perceived.
Many consumers feel this form of payment is not as secure say as cards or cash and that the signal could be intercepted or hacked. France in 2012 appointed Inside Secure, one of the worlds largest NFC companies in the world to provide them with security solutions. Using ESS (Embedded Security Systems) technology, they encrypted and placed security blocks on all data. The reason why France did this was because all medical services in the country use NFC devices to transmit patients’ data. While this improved the provider’s knowledge and efficiency, there is concern that private information may be accessed by those with no right to it.
Another issue is NFC requires power, which potentially reduces the phone’s battery. What if you carry no cash or cards and your only form of payment is your smartphone and the battery is gone, where does that leave the customer? If everyone becomes to reliant on the device to carry out all these contactless duties they run the risk of being left “high and dry”. Credit and debit cards are a normal part of life and work well for most people. If your smartphone is robbed, unless you have your phone password protected or encrypted you run the risk of it being used to purchase items fraudulently. Smartphones have been hacked and infected with viruses. All of the information stored on the phone may be insecure, and even if it is secure it may not be perceived as such. If a company chooses to adopt NFC they should make consumers aware of the technology and how it benefits the buyer, as it will be useless without customer knowledge of it. The adopter should also make sure to understand the habits, technological ambitions, and security preferences of their customers.
If these things are taken into account, they have a good chance of success.