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It's going to be the year of mobile...again. Sure, go ahead and yawn (or laugh). We've heard it all before, right? But smartphone adoption is through the roof, and cutting-edge technologies are gaining some real traction. So we caught up author and consultant Rank Mobile's Cindy Krum to help sort out some of mobile marketing's most recent acronyms, not to mention their viability.
NFC is new in the mobile arena. Can you explain what it is?
NFC stands for near field communication and it's a means for payment, which is what it's mainly used for now, but it's also used for transferring information over a very short space.
There's a whole class of intelligent things that can broadcast including RFID, Bluetooth and NFC, which is basically a subset of RFID (radio frequency identification). RFID is what started this. RFID is actually used for a lot of different things including tagging animals in the wild, or cow's ears, or big shipments or pallets of goods. They use RFID on all this stuff to easily track things across more of a distance. Then they came up with NFC, which is a much closer, proximity-type communication.
How close is "close"?
Very close. Usually within 2-3 cm. is what I've seen. When they were still testing RFID and thought it was a great idea they had a major oil company gave a key fob to their employees to pay for gas. You would swipe it at the pump and pay. Problem was it was overly sensitive so if you walked by someone else's pump you'd pay for their gas.
Prada was using RFID in their stores to keep tabs on inventory, right?
Yes, Wal-Mart, Prada. The people with the tin hats hate it because you take the product home and you've still got the RFID on it. If you've ever pulled the price tag off the back of a CD and seen a computer chip thing on the back, that's RFID.
There's two types of RIFD. Active RFID is always working, that's what they put on pallets. Passive RFID is actually pretty cool because it takes battery power through the air, or when you swipe something over it, it activates the chip for just enough time for it to send the message.
So where does NFC fit into this spectrum? You need a specially equipped phone for it, don't you?
Tue. NFC is a progression and was born to fix the problem of, essentially, paying for other people's gas. Now it's used for payment, but also for things like the key fob for your garage or apartment, or 7-11s have a swipe-and-go payment system. It's all the same technology. They're using it in Japan for payment. You can actually have it open up a digital wallet and pick the credit card you want to make the payment with. You also can have a series of digital keys built into your phone that swipe you into buildings, or potentially in and out of your car.
That's all very useful and practical, but where do the marketing prospect come in?
The thing I like the best are activated posters. You put an RFID chip on the back of the poster and in the design add a call to action such as "touch your phone" or "swipe your phone here." If the phone is enabled with NFC it will do something, whatever you tell it to do. Generally, it's open a Web page - assuming there's a clear signal or if there's WiFi - or send a text message with a link. Usually, the Web page or link will contain another call to action. Usually it's a download of a wallpaper or a screensaver. I love the idea of putting calendar events into the phone, for example I saw this used in a Bluetooth campaign for [Discovery's] "Man vs. Wild". It would send you a VCal reminder to watch the premiere. That's great! You can have it open up a text message or an email that's preformatted and ready to send that perhaps opts you in to something.
Do you have any idea how many NFC-enabled phones are available in this country? Is this one of those chicken-and-egg marketing conundrums in which you can't do the marketing without the phones, and the phones aren't readily available?
It's definitely bigger in Europe, but it's not happening so much there yet. It's not something you can plan on. The only place you can really plan on it is countries in Asia. My hope is the next iPhone or one of the cool Android phones has NFC as well as a QR code reader.
It's going to take some big company to take the leap and put it in. In the United States there are a lot of concerns for privacy, maybe more so than in other countries it seems. That's one of the things slowing adoption of NFC.
Let's compare and contrast QR with NFC, because even QR is barely on people's radar here. What are the advantages and disadvantages of both technologies?
I love QR codes. I think they're going to happen before NFC. It's just a software download instead of additional hardware. For NFC to work you actually have to have a chip in the back of the phone. The problem with QR codes within the US is there's just not awareness so people don't know what to do with them. But also QR code reader aren't standard on the phones. Different QR code software varies in quality, or can read some codes but not others. The reason that's not an issue in Japan they have a state-run telecom that mandates the software on all the phones. It's a predictable environment.
In the US we have such a different carrier system that even if a major carrier decided to pick a pony and say, "This is the QR code reader we're going to go with," it doesn't mean everyone else will.
Like VHS versus BetaMax?
Yes, times five major carriers. That's why again my hope is the iPhone or an Android phone will pick on on-board application and have everyone start with it.
How can NFC, getting back to that, transform mobile commerce? Let's face it, you can already pay at Starbucks with your phone.
Mobile commerce almost confuses the issue because you can pay for things with your phone over the Web, or you can have loyalty accounts tied to the phone, or have things like coupons on your mobile phone that are scanned and tied to a loyalty account, or you can pay with NFC. NFC is so different than any of those things. It's almost just like having a credit card. You don't have to swipe it. It goes over the Web only inasmuch as a credit card number goes over the Web when you use it.
The other thing in terms of NFC security is it's a lot easier for Europeans to adopt it is they use a chip and PIN system. That's an added level of security we just don't have in the US. When credit card information is flying through the air, or the invisible Web, people feel safer perceptually when you have that extra security level.
So activated posters I think is the big thing, but I don't think we're going to see it in the US unless there's a big push from either a cell phone manufacturer or a carrier.
With that there's going to have to be a lot of user education because even people with smartphones never really use them to their full potential.
Even going back to the PalmPilot boom of the late '90s, when kiosks and phone booths asked people to synch and beam their devices, people just didn't do it. Americans just aren't trained to take their phones out and bump and wave them, are they?
Americans are much less patient with things they don't understand. If it makes them feel stupid, they just won't do it, especially in public. Once we have the right phones and handsets and software, it's going to take the first couple of posters to include a lot of instructions on how it works and what you need to do and what if it doesn't work.
Wired magazine started putting QR codes in the magazine but they failed to run an article explaining what a QR code was.
So all this new mobile technology. Should we marketers put it on the back burner and revisit it in, say, 2015?
It depends on where your market is. If you're in Asia then absolutely it should be on your radar. In Europe, too.
My advice is watch what other people are doing and how it's working. Mobile is so new that you should go ahead and try it. Know that if you're confused, everyone else will be too. Test it, see what isn't working, and make it work.
Cindy's book, Mobile Marketing: Finding Your Customers No Matter Where They Are, published just this week.