NfC News and Views


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NFC research and opinions on what lies ahead for NFC from industry experts

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NfC News and Views

  1. 1. NFCNews and ViewsResearching consumer perceptions towards NFCR e c e n t r e s e a r ch f r o mPosterscope UK and USA hasfound that there is every signthat Near-Field Communication(NFC), a wireless technology thatallows you to make transactions,exchange digital contentor connect with other NFCelectronic devices by touchingthem together, will becomecommonplace in the future asit is incorporated into moremobile devices than ever before,and is increasingly adopted foreveryday usage. Previous research studies aroundNFC and mobile payments e.g.Google Wallets have focused onthe low awareness and usageof the technology. With very few an ideal opportunity to understand NFC technology per se was higher. ‘easy access to web content’ andmobile phones currently being perceptions of the mobile advertising After being given a description of ‘comparing prices’. Obviously thereNFC enabled (roughly 5-10%) this interaction experience. what NFC technology was, 60% were some smartphone ownersis hardly surprising. A lot of mobile technologies/ of smartphone owners said they (although only 30%) who told us So to find out more about the applications are described using had heard of it. Similarly, when the that they were unlikely to use NFCfuture potential for NFC, as well complex terminology or definitions NFC technology was demonstrated posters in the future - so we askedas other mobile technologies, and (e.g. NFC, Augmented Reality) through an OOH video, the number them why? It was pleasing to seethe opportunities they provide for which, whilst may be familiar of respondents’ who stated that that security/viruses were notOut-of-Home media, Posterscope terms within the media world, are it was important to have NFC perceived to be as much of a barrierpartnered with Clear Channel and not necessarily in the real world. functionality on their next phone as could have been expected. Thecommissioned an indepth research To overcome this, the survey doubled from 36% to 70%. main reason given was that it wasstudy into the perception and contained detailed descriptions, Smartphone owners also a gimmick, but in the future whenfuture adoption of NFC. The study, images and videos about the perceived that various NFC consumers have become educatedconducted in Feb 2012 in both the various mobile technologies. This technologies were useful, in on the benefits of Interacting withUK and USA, consisted of 1,000 lead to greater levels of awareness particular ticketing e.g. Oyster Card OOH posters hopefully this barrieronline interviews. However, unlike amongst our audience, who we (74%) along with mobile phone can be easily overcome.other research, it ensured that all termed “Smartphone Real World contactless payments (71%). And finally as we look ahead, 57%the respondents were smartphone Interactors”, and as the research Encouragingly for OOH, over half of respondents’ also stated that ifowners who had used at least one of results will demonstrate, a more (54%) perceived that using NFC they saw an OOH advertisementthe following seven technologies on positive view of the technologies technology to interact with posters that interested them, they wouldtheir devices: Quick Response (QR) and their future potential. would be useful - this applied to be likely to purchase directly from itcodes, Mobile Bluetooth, Barcode So what insight did we gain posters in multiple OOH locations using NFC. This applied to multipleScanner, Augmented Reality, Visual from the research? Firstly, that providing opportunities for all OOH product categories and providesSearch, NFC and Mobile Payments. an education job is required. The media owners and formats. The the ultimate opportunity for brandsIn addition half of the respondents research demonstrated that 60% top reasons given for interaction in the future.had to have used at least one of smartphone owners were unsure with NFC-enabled posters were To access the full researchof the technologies to interact whether their phones were NFC ‘downloading vouchers/special findings go to with advertising, providing enabled. However, awareness of offers’, ‘getting local information’, pyB4y-lg
  2. 2. NFC: What Lies Ahead? “Hero ideas create a virtuous circle of increasedWe canvas industry opinion interest, investment and engagement”We increasingly talk about theconnected consumer, and ofconvergence. One of the keydrivers of this convergence –and one of the technologies thatwill make consumers even moreconnected – is NFC. We’re familiar with the manybenefits that NFC contactlesstechnology is already bringing to theconsumer, propelled in the main byits integration into smartphones. Andfor the advertiser, NFC allows quick,simple, scalable and affordableinteraction between mobiles, postersite and ultimately their brand - lotsof boxes ticked. NFC goes far beyond simplyserving as a proxy wallet. We canthink of it as a gateway to a wholehost of rich mobile content and newexperiences, itself the springboardto new levels of consumerengagement. To us this suggests that NFCstands a good chance of emergingas the dominant technology inthe mobile area, but it’s importantto consider both the barriersand drivers which will ultimatelydetermine its success. It’s a theme that Posterscope Wi-Fi facility without the pain of very different in two years’ time. I iWallet (barcode and QR codesexplored recently at the SXSW having to enter IDs and passwords, think there will be lots of posturing based now, but NFC based in thefestival in Texas and here we canvas or pay for your parking by tapping from the likes of Google and future) and the banks are launchingopinion from industry leaders. a poster, connected to a payment many network operators – these NFC prototypes today. The market Miles Quitmann, Managing card, or even book a hotel room businesses have made it clear they will be fragmented in the shortDirector Proxama is keen to over the internet and use your are keen to be seen as the new term, but expect to see muchunderline the variety of potential NFC enabled phone as the access wallet owners. The banks seem to consolidation in the longer term.”uses for the technology: “NFC has control/room key.” be relaxed about being a standalone Michael Nicholas, Chief Strategyso many potential applications; However, Quitmann also warns that application or forming part of a third Officer Isobar, suggests that wevoucher and coupon distribution for “Unappealing content could slow the party wallet. It is quite possible that need to think very carefully aboutbrands and retailers is an obvious growth of NFC as an engagement the largest retailers will decide to the consumer benefit. “The questionone. Picking up a voucher in store, technology. NFC should be magical, move into the wallet-owning space I always ask is: do we really have aor, for example, at a bus shelter more than an updated version of – a Tesco or Sainsbury’s Wallet? - credit card problem? Are they toofor redemption in a local store, cumbersome QR codes. A single tap these giants might well think that heavy? Do they take up too muchdrives footfall and sales.” Quittman should send the consumer directly now is the time to move into the space? Do people sit around andbelieves that NFC for brands and to the most engaging content and payment space more vigorously think “cash is such a difficult thingretailers needs to be transactional enable them to keep the content or by launching their own closed-loop to use”? I don’t think that they do.– an opportunity to drive sales - and voucher for later use.” payment platforms and capitalise on To top it off there is a lot of datacites the following examples; When questioned ab out the current poor bank PR. pointing toward people not trusting “Enter a coffee shop, tap a poster “ownership” of NFC technology, The obstacles are beginning to mobile payments just yet. This isto immediately connect to the local Quittman adds “Things may look be dismantled – Apple is launching horse-before-cart in my opinion; we
  3. 3. “We need to embrace the real benefits of ‘what you touch is what you get’.”need to embrace the real benefits of “what youtouch is what you get” in a low-risk way to ease atransition and lower the barrier of adoption. Rightnow this wallet push by banks and carriers seemsto be more about them than about consumers.” In order for NFC to be adopted into themainstream, Nicholas believes that “NFCinteraction should be made fun and informalfirst and foremost - that’s why gaming andentertainment are such nice fits. They helppeople to understand the ‘metaphor’ so that theyask themselves “Wouldn’t it be great if I coulddo this with everything?” And when they startthinking this way, there are few limitations to whatthe consumer will then grant us permission to dowith NFC. Furthermore our goal shouldn’t simply beto move everyone towards NFC as quickly aspossible – rather it should be to deliver awesomebrand experiences to people. But ultimately it’s the tangibility of an NFCinteraction that will prove one of its mostcompelling benefits – unlike QR codes, it’s a verynatural interaction, very easy to understand, witha very low learning curve” suggests Nicholas. Stephen Bedggood, NFC Product ManagerO2 stresses the versatility of NFC. “Everyone are forcing those parties involved to address consumer adoption.talks about NFC being used for contactless some serious questions; “There are ongoing When asked the question about the educationalpayments, but it is far more than that. NFC has discussions regarding the battle for ownership – challenge for NFC, Edwards responds “Like allbeen used for Transit for many years now and some healthier than others. The healthy battles innovation it will spread through the network ofthis is probably the number one use case in are driving serious consideration as regards potential users. Initially we need to look afternearly all developed countries. Here in the UK, customer servicing, liability and best practice for the innovators, the first 3% who will buy justthe most well known deployment is the Oyster consumer choice. If it were a free-for-all with because it is new; we need to deliver messagesCard which sees over 2 million journeys made open access to the secure keys, who would be for appropriate brands in appropriate contexts. ITeach week using the card. liable for a fraudulent transaction if something trade fairs will attract early adopters who will have NFC is also used in museums and at tourist went wrong? Who would they call - the internet differing needs and interests - the brands andattractions, allowing people to further interact giants, their bank, their mobile operator or the contexts should evolve with them. Hero ideas thatwith the world around them, for example, finding handset manufacturer? Can the internet giants create real value are critical to create a virtuousout more about an object in a museum or perhaps provide the UK call centres to support customers circle of increased interest driving increasedviewing video content about that object.” in the same way that operators can? What investment driving increased engagement.” Bedggood also emphasises the need for happens if we end up with a different wallet app So, despite some common concerns, ourcontent to be appealing; “Simply linking to for every bank and every loyalty card we have contributors appear unanimous in their view ofa company’s promotion on a website is not today? No consumer would want to use it as the positive potential of NFC, a view that we shareengaging and not providing that consumer they would have to switch between this app here at Posterscope. There are undoubtedlywith a memorable experience. An example of a and that app to use this loyalty card with that some sizeable obstacles ahead which the marketpositive experience might be turning the SMS- payment card. In the end, collaboration between must overcome in order to offer the consumerbased parking experience into one where I tap a operators and between banks is healthy as it the most user-friendly NFC experience, be theysticker which launches a location-based parking drives the answer to these questions and offers content, ownership or logistics-related. But withapp, knows my registration and payment details the consumer choice.” so many stake-holders with their eyes on theand allows me to enter how long I want to stay. Jean-Paul Edwards, Executive Director, NFC prize we are confident that there is sufficientOr, alternatively, being able to tap a wine bottle Futures Manning Gottlieb OMD takes the view momentum to drive this through successfully, andin a shop to access recommendations of which that unappealing content could seriously slow the where the curious and contented consumer goesfood it best accompanies, provide other drinkers’ growth of NFC. “All media runs this risk but NFC the smart advertiser soon follows. Interest in NFCreviews and allowing me to review the bottle. will need some hero ideas to gain traction for is growing fast for all of these reasons and givenThese could be delivered via QR codes too, but the channel and to illustrate techniques and value the technology’s natural synergy with Out-of-so far it hasn’t been done successfully.” that would not have been possible previously.” He Home we are hopeful that the new opportunities Bedggood believes that the debate surrounding also states that “NFC needs to be open-source they collectively represent will encourage newownership has an upside in so much as they with non-interoperable systems likely to stifle investment in the medium.