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NFC in Direct Mail - the Pros and Cons


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Should you use near field communications in your next direct mail campaign?

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NFC in Direct Mail - the Pros and Cons

  1. 1. NFC in Direct MailShould you use near field communications in your next campaign? Brought to you by:
  2. 2. Intro Near field communications, or NFC, is a buzz word that has gained popularity over the past few years, especially in the retail space. NFC helps to connect the physical and virtual worlds through short-range wireless communication technology. Although this technology has been around since the 1980s, it took the rise of smartphones and mobile payments to launch NFC to today's status of "the next big thing.” However, roadblocks, such as the late addition of NFC to Apple devices, slowed its adoption in the marketplace. But now that businesses are beginning to embrace the technology, marketers are finding clever ways to use the technology across many platforms, including direct mail. In this document we’ll explore the pros and cons of using NFC in direct mail to determine if it is right for your next direct mail campaign.
  3. 3. About NFC NFC is a wireless communication technology in which two NFC devices communicate with one another using radio frequencies to exchange information. Many smartphones manufactured today include an NFC chip that can be used with either another NFC enabled device or an NFC tag. An NFC tag can be a sticker or small item, like a key fob, that is embedded with a chip and antenna. There are two NFC modes, active and passive. Active Passive Both devices generate a radio frequency field and exchange data. This mode is also called Peer-to-Peer (P2P) and an example is two phones tapping and sharing information. Unlike Bluetooth, there is no pairing required. The passive mode includes one active device (generating an RF field) and one passive device, which uses that field to exchange information. There is no power source in the passive device, but operates off of the field the active device is emitting. And example of this is a smartphone and an NFC tag or smartposter (with an embedded NFC tag). Direct mail utilizes the passive mode since the recipient would use their smartphone (active device) with an NFC tag (passive device), that can be either embedded within the paper or used as a sticker.
  4. 4. About NFCAlong with the different modes, there are also several types of NFC tags (Type 1,2,3,4) and each has its own distinct capacities and capabilities. Memory load and read & write capabilities differentiate each tag type, therefore, the direct marketer must understand the differences and how they will be used prior to launching an NFC direct mail campaign. Unlike QR codes, NFC tags can be re-writeable. Type 1 Type 2 Type 3 Type 4 Read & write capabilities Can be configured read-only 96 bits of memory Read & write capabilities Can be configured read-only 96 bits of memory Configured at manufacturer to be read and re-writeable or read-only 1 MB of memory More expensive than type 1 & 2 Configured at manufacturer to be read and re-writeable or read-only 32K of memory
  5. 5. A Short History of NFC 1983 2004 2006 2010 2012 2015 The first patent on RFID technology (NFC derives from radio frequency technology) Nokia, Sony & Philips created the NFC Forum - an association dedicated to the promotion of NFC First set of specifications for NFC tags established by NFC Forum The Nokia 6131 is the first NFC- enabled phone NFC grows from a payments solution to sharing content Samsung Nexus S becomes first NFC-enabled Android phone Sony and Samsung each develop programmable NFC tag products Apple adds NFC to iPhone 6 & 6 Plus, but is limited to use with Apple Pay
  6. 6. Other NFC Uses content transfer mobile payments transportation home automationretail beacons smart posters outside of direct mail
  7. 7. of using NFC in direct mail It's contactless. It's versatile. It's personal. It's trackable. It's "tap-n-go" technology helps turn your direct mail into an interactive piece with just a tap. No app or software required. Tapping is easier than scanning. With NFC you can create very personalized experiences for your recipients, providing them with relevant and targeted content. When you add campaign tags to the NFC links, you can easily track your mobile conversions. NFC can be used across an entire marketing program. For example, a retailer can use NFC to drive customers into their brick & mortar through a direct mail piece, track them upon entering the store, and use tags on products to provide information or coupons, which can help boost sales. Beyond direct mail, NFC can be used in a variety of ways, including home automation, access control, inventory control, and more! It's savvy. Want to look like you're on the cutting edge of technology? NFC helps companies and brands appear to be tech-savvy. The Pros
  8. 8. of using NFC in direct mail It's costly. It's secure. It's new. And what about ROI? It's limited. Embedding NFC into direct mail can be costly, plus if you need to adhere the tag to the printed piece, that also comes with a price. It will take some time for pricing to come down to an affordable level. Being secure is not usually a bad thing, however, some phones will have security features that require the NFC to be turned on before being able to use. This will add another step to the process, making it similar to a QR code, which typically requires one to open an app. As with any new(er) technology, there is a learning curve. Marketers will need to become educated on the different types of tags and how to use them. Although it is easier to track ROI with NFC, is it going to improve your ROI? The additional cost of the technology coupled with the absence of NFC in all phones may leave you with a less than stellar ROI initially. This is a new marketing tactic that hasn't been tested enough to ensure success. Only 39% of phones are enabled with NFC. Plus, the newest iPhones are limited to using NFC with Apple Pay only. Therefore, a large chunk of your audience will not be able to interact with your mail piece until more phones become enabled. The Cons
  9. 9. What About QR Codes? When considering NFC for direct mail, it would be prudent to compare it to QR codes before jumping in. After all, QR codes will provide a similar experience and have been used for a number of years with good results. Here's what to consider: QR codes are cost effective. Compared to the technology used in NFC, QR codes don't require special paper or a tag that needs to be attached to the direct mail piece. QR codes are simply printed, and there are many websites that will generate a QR code for free or at a very low cost. QR codes are not new, which means they have been tested and people understand how to use them already. They have been widely adopted for many applications, including direct mail. Plus, you can personalize them with your brand's colors or logo. Unlike NFC, QR codes don't require an NFC enabled device. Older smartphones are not NFC-enabled and the newest iPhones' NFC chip can only be used for Apple Pay. Virtually any smartphone with a camera can scan a QR code, as long as the phone has a QR code scanner built-in or an app. There are many free QR code apps on the market and since QR codes have been used in many applications, it is very likely that most people already have an app on their phone. QR codes have similar capabilities of NFC, but without the additional cost or learning curve. Yes, you must open up an app to use, however, many NFC enabled smart phones will be equipped with security features to prevent eavesdropping technology. Therefore, users will still need to "turn on" the NFC before using, so the same number of steps is required.
  10. 10. In Conclusion Although NFC has the potential to change the way we receive and share information, it is still very new for direct mail purposes. Currently, cost is a limiting factor since there are not many companies that mass produce NFC tags for direct mail use. Plus, the number of NFC-enabled smartphones is relatively low, which limits your audience. In time, as pricing stabilizes and more phones are manufactured with the NFC chip, NFC may very well be a direct marketer's most powerful tool. Until then, the QR code is still an effective and efficient alternative that has proven to be successful for several years. CPS Cards is a leading provider of integrated card marketing solutions for the retail, pharmaceutical, insurance, healthcare and telecommunications industries. As your direct mail partner, we provide card production and personalization, carrier printing, fulfillment, kitting and mailing. We also specialize in gift, membership, loyalty, healthcare, pharmaceutical and insurance cards. We have the capabilities and capacity to handle even the most challenging jobs, and take extra steps to ensure that even the most difficult orders are completed accurately and on time.