As NFC-enabled mobile devices reach the market in larger numbers, announcements of commercial-grade NFC-enabled advertising campaigns have also increased, demonstrating that the market for NFC-enabled marketing is beginning to materialize.
Clear Channel CEO Matthew Dearden described mobile technology as “a natural companion for out-of-home” advertising in December 2012.
In February of 2013, Clear Channel launched a nationwide network of permanent advertising panels in the UK, one of the largest announced to date.
The rollout included 10,000 panels in Birmingham, Bristol, Leeds, Liverpool, London, Manchester, and Newcastle. Clear Channel claims that its network was the UK’s first permanent nationwide NFC-enabled advertising platform.
Other outdoor media companies, such as JCDecaux and CBS Outdoor are also supporting the technology, or at least trialing it.
While Clear Channel UK said it is managing its own NFC content and marketing platform, with some help in the campaign from UK-based Eagle Eye, most NFC-enabled campaigns use specialized companies to provide the technology. They include France-based Connecthings, UK-based Proxama, Blue Bite of the U.S., Australia’s Tapit, along with U.S.-based NFC tag supplier Identive, which also offers its own tag platform.
Consumers can tap the tags to, for example, visit a brand’s mobile website or Facebook page, download applications or videos, place orders, interact with the brand or share its content on social media.
Campaigns Starting to Grow
In the past two to three years, such campaigns have launched in several countries, mostly in the form of local pilots.
For instance, in a May 2011 trial implemented by UK-based Proxama for Twentieth Century Fox, users with NFC-capable smartphones in London could tap 10 to 20 smart posters to view a trailer and Facebook page for the movie X-Men: First Class.
More recently, out-of-home NFC advertising has expanded to nationwide campaigns and begun to include small, put permanent rollouts, usually in a particular city.
In April 2012, for example, France-based Connecthings provided the NFC tags and content platform for the City of Strasbourg’s permanently deployed StrasPlus service. The deployment initially included 1,400 tags on signs in bus stations and other public areas, which residents and visitors in Strasbourg could tap to access transport information, local news and events, tourist information, and maps.
Later in 2012, Australia-based Tapit and the distributors of the movie Zero Dark Thirty launched a nationwide smart poster campaign in Australia. The campaign lasted four weeks and involved 200 posters at 91 shopping centers in every state except northern Australia.
The campaigns are starting to grow larger. Clear Channel UK in March announced its first advertisers for its NFC-enabled panels, including promoters of recently released films, Trance and G.I. Joe: Retaliation, and ads from KFC enabling users to search for the nearest restaurant. Vouchers and promotional offers would also be available from advertisers.
In May, Identive said its tag marketing campaign platform, Tagtrail, saw its first commercial rollouts during the first quarter of 2013. It declined at the time to name the customers, but CEO Ayman Ashour did hint that “you may have already tapped your phone into March Madness posters in American stores or various loyalty programs and posters in German movie theaters.” March Madness refers to an annual college basketball tournament in the U.S.
As the market for these campaigns begins to gather steam, NFC marketing companies are offering platforms that allow brands to design, deploy, manage, and collect analytics about their campaigns, with varying levels of help from the NFC platform providers.
NFC vs. QR Codes
The majority of content platforms describe themselves as “technology agnostic” and usually offer customers the choice of both NFC tags and QR codes.
As an Identive spokeswoman noted to NFC Times: It’s “important to support today’s mixed environment of NFC and non-NFC enabled devices.”
Industry observers have pointed out that tapping a tag is faster than opening an application and scanning a QR code; additionally, NFC works even in poor lighting and does not require a scanning application. But mobile devices do require an NFC chip to read tags, while nearly any smartphone can run a QR code app and scan the codes.
QR codes also remain less expensive to add to posters and other outdoor advertisements, though some advertisers and consumers dislike them on aesthetic grounds. “QR brings out very mixed emotions with different marketers,” Mark Donovan of U.S.-based Thinaire told NFC Times.
Still, he said, “normally, we would at least incorporate QR in, as well.”
David Holmes, vice president and general Manager of mobility and NFC solutions at Identive, told NFC Times, “We try not to pit one technology versus the other. They’re complementary, not because of how they function; they’re complementary in terms of where one might be more appropriate than another.”
Donovan said that although the company’s mobile marketing platform supports QR codes and other technologies, “for the most part, our clients ask for NFC only.”
And some tag platform providers say they are seeing growing use of NFC tags compared with QR codes, though the QR codes still get more interactions.
For example, Connecthings said NFC taps accounted for 9% of page views at its installation in the last five months of 2012, increasing to 13% in the first five months of 2013, with QR codes making up the balance.
Tapit said the increase in Australia is even more pronounced. Six months ago, 85% to 89% of consumer interactions with advertising displays in its campaigns involved scanning QR codes, and only 11% to 15% involved tapping NFC tags. Over roughly the past six months, Tapit told NFC Times, NFC’s share of those interactions has increased to 38%-43%, compared to 57%-62% for QR codes. It’s not clear how many campaigns were involved in the higher NFC tap rate.
Collecting Data Analytics
In the long run, gathering data about consumers is even more valuable to companies than simply delivering a message for a given campaign.
The companies in the campaign platform market generally collect similar types of data from campaigns. These include a count of total taps and unique taps, tag location, date and time, content accessed (such as a mobile URL or a movie trailer) or actions taken (such as downloading an application or liking a Facebook page), and which type of mobile device taps the tag, and often which operating system and even which mobile browser is running on the device.
Other user information, such as personal details, preferences, and demographic data, are collected from users on an opt-in basis when they sign up for certain offers, interact with brands using their social media profiles, or create profiles with the advertiser or the company managing the campaign.
For instance, although no application is required to tap NFC tags, Identive offers consumers an optional tag-reading application that lets them create a profile with its Tagtrail platform and view a history of the tags they have tapped. The application also enables a tap of the Tagtrail tags to automatically open the phone’s camera or connect to a Wi-Fi network.
However, most of the players in this market told NFC Times that they respect users’ privacy and can still collect useful data for advertisers without any personally identifiable information from users.
“We don’t need any information from the user because there’s still a fair amount of data that’s interesting to the brands and the campaign owners in terms of level of engagement,” Identive’s Holmes told NFC Times.
For example, he said, “you can still collect a lot of data just on tag-based activity in terms of number of unique taps; you know that a number of people are engaging, there’s several unique visitors, and there might be repeat visitors.”
Tag location also allows advertisers to link user activity to time of day, weather, and other factors to explain varying levels of engagement and understand why some tags receive more taps than others.
At the retail level, when tags are attached to shelves displaying specific products, companies can see which products users interact with more than others. “I can start measuring who’s engaging with a specific product. I’m capturing information about that entire flow in stores that traditionally there’s no information captured on,” Thinaire’s Donovan told NFC Times.
Campaign results released so far illustrate how that data comes together for advertisers.
In October and November 2012, India-based NFC advertising startup JusTap! held a smart poster campaign at the Cinemax flagship movie theater in Mumbai. During the first six weeks of the campaign, over 200 users tapped the tags, an average of five people per day with an average engagement time of 36 seconds per user. Devices used included the Samsung Galaxy S III, Nokia 700 and BlackBerry Bold smartphones, Google Nexus 7 tablet and a model from HTC. Of those 200 tappers, 35% downloaded the Cinemax Mobile App, 26% left feedback for Cinemax, 20% “liked” Cinemax on Facebook and 19% purchased movie tickets from their smartphones.
In the U.S., Thinaire recently released the results of a San Francisco-area retail marketing campaign with food manufacturer Kraft and advertising company NewsAmerica. The companies placed NFC-enabled cards in the aisle of five area Safeway supermarkets. According to Thinaire, customers spent an average of 48 seconds on the NFC-enabled advertisements, compared with a 5-to-8-second average for print-only advertisements. Thirty-six percent of those who tapped also downloaded a recipe, shared the recipe with a friend, viewed another recipe, or downloaded a cooking application.
Retailers are “usually happy with about 2% of engagements,” Donovan told NFC Times. The difference, he claimed, is that NFC users were “not burning that time looking for the app, launching the app, snapping that QR code. It’s immediate on-boarding, and they’re now spending that time engaging.”
Managing Content
Most–but not all–companies that provide tag campaigns offer clients a way to manage the tags’ content in real-time from a Web browser interface.
Proxama’s TapPoint platform, for instance, lets users assign, remove, and change tag content remotely from the Web. “We believe this increases the lifespan of the tag and its value to the advertiser,” a Proxama spokesman told NFC Times. CEO Miles Quitmann estimates that customers can set up mobile URL-based campaigns in minutes.
Tapit, Thinaire, and Identive offer similar self-service platforms. However, Thinaire’s clients “generally are relying on us to assist them with that,” said Donovan.
In contrast, Blue Bite’s mTag platform does not allow advertisers to remotely manage their own content. Instead, Damiani said that although advertisers maintain control over which content is shared with consumers, “that’s where we come in and make sure that’s all taken care of so they don’t have to worry about it.” Advertisers don’t have to “be concerned with the intricacies of the technology, but have the ability to log in and view results and analytics in real-time,” he said.
But a spokeswoman for Identive told NFC Times that its Tagtrail platform uses dropdown menu selections to guide users through the setup process so that it “requires no special technical ability–and no knowledge of NFC.”
Pricing Models Differ
Platform providers appear to differ the most when it comes to putting a price on the service.
France-based Connecthings, which also sells tags through its online NFC Tagstore, charges a per-tag licensing fee for AdTag customers.
Identive, which shipped almost 15 million tags during the last quarter of 2012, offers monthly subscription plans from a free basic plan to a $149-a-month premium plan. Each plan provides varying levels of access to analytics and includes quantities of “free” tags.
Proxama, which recently announced a partnership with tag supplier Smartrac, uses a combination of up-front campaign charges, tag licensing fees, and cost-per-tap fees. “It is our vision that the market will adopt the cost-per-tap model aligning physical world advertising to existing digital success based cost-per-click models,” said head of operations Graham Tricker.
On the other hand, such companies as Blue Bite and Tapit avoid per-tag or per-tap fees.
Blue Bite’s pricing model varies by campaign, but Damiani said, “We are not in the business of selling tags. We provide a mobile solution, which brings together all of the pieces of a successful mobile campaign, including the creative, content, user experience, deployment and analytics.”
Tapit charges by the campaign, and vice president for Europe, the Middle East, and Africa Niklas Bakos told NFC Times, “We don’t want to establish ourselves as a tag provider, hence we will never just charge for the tags.”
Uptake and Expectations
The viability of NFC tag-based promotional campaigns is tied directly to the availability of NFC devices.
“NFC has been tricky up until this year in that obviously there’s no secret about the penetration numbers on NFC,” said Thinaire’s Donovan. “We are seeing a significant uptake in this, and expect that in 2013 we’ll see that aggressively continue to grow.”
A spokesman for Proxama told NFC Times earlier in 2013, said he expected the number of campaigns to grow throughout the year. In April, Proxama’s Quitmann told NFC Times that the company expects to announce two other major projects in the coming months. The first will launch outside the UK, Quitmann said, and it involves mobile-wallet capability and “some large organizations who are well known in the mobile space.”
Early in the summer, Quitmann said that he hopes to be able to announce a retail-related project in the UK with “a very large global brand.”
Connecthings CEO Laetitia Gazel Anthoine told NFC Times that the company has more than 25,000 tags installed in permanent deployments for public services in the French cities of Caen, Nice, and Strasbourg. That’s in addition to a recent rollout in Madrid. Tapping these tags gives users access to transport and tourism information, maps, event listings, and information about other local services; the displays are managed through the company’s AdTag platform. In Strasbourg, the company claims that the StrasPlus mobile page receives 100,000 views a month, though that is unlikely launched only by NFC tags.
An Identive spokeswoman told NFC Times that its NFC-enabled campaigns for AT&T, Cisco, Ericsson, Qualcomm, Samsung and Vodafone at Mobile World Congress 2013’s Connected City exhibit received around 1,100 taps during the four-day event. During a conference call in March 2013, Identive CEO Ayman S. Ashour said, “Before the end of Q1, we expect Tagtrail to be on direct-to-consumer trials with large telcos in multiple major countries on a national basis.”
Thinaire’s Donovan told NFC Times, “I think that the reluctance is probably more on the agency side than it is on the brand side; what we see on the brand side is a very aggressive movement to go after this, but the brands control their own risk, whereas the agencies don’t want to put something in front of the brands that’s going to be particularly risky.”
Donovan said he believes that marketing campaigns are likely to continue to give way to larger-scale adoption of NFC by brands. “They’re interested in how it impacts their whole ecosystem. People are very interested in how this impacts everything, not just doing a tiny trial.”
Many of the companies that specialize in NFC marketing expect that uptake to lead to wider consumer adoption of the technology for other applications, such as payment, but other sectors of the advertising industry offer differing opinions.
A Proxama spokesman called NFC marketing “a vital part of building trust in the technology.” He told NFC Times, “We believe that the uptake of NFC will be driven by marketing activity. Coupon and voucher distribution from posters and point of sales displays are likely to be one of the first mainstream uses. Loyalty card schemes are likely to be another.”
In the interim, the NFC marketing activity will “move across retail and media to drive NFC until national NFC payments sorts itself out,” Thinaire CMO Patrick Meyer told NFC Times in February of 2013.
Damiani of Blue Bite agrees. “the more applications we see in retail, marketing, social, transit, etc., the more likely NFC payment systems are to come into play,” he said following the February “NFC Goes Social” panel at the Massachusetts Institute of Technology in Boston.
Awareness Low but Growing
CBS Outdoor, however, released a report earlier in April of 2012 on interactive advertising in Europe, in which it said it expects payment to build consumer awareness, which will drive uptake of NFC-enabled advertising.
“It is only a matter of time until NFC technology underpins a mainstream interactive behavior (such as mobile wallet payments) to make interacting with advertising via a smart device an everyday norm and a very real consumer expectation,” said the report. But CBS Outdoor’s survey also found that only 8% of urban respondents were aware of NFC, up from 6% in the preceding year. By comparison, 54% of respondents were aware of QR codes.
A 2013 study conducted by Kinetic Worldwide, a large planner and buyer of out-of-home media found 21% of smartphone owners surveyed had heard of NFC and 19% of those had used the technology, according to a recent presentation by JCDecaux. That compares with 71% awareness for QR codes and 36% use of those aware of the technology.
NFC advertising companies agree that consumer awareness is an issue. For Meyer of Thinaire, this was the greatest challenge facing the NFC-based advertising industry in the coming year.
But with the increasing availability of NFC phones and more out-of-home media companies supporting the technology in their billboards and other outdoor advertising panels, awareness of NFC is expected to continue to grow.
It remains to be seen how well the brands and media companies, and the NFC tag marketing companies they hire, will capitalize on that growth. NT