In our previous post NFC: Disrupting QR Codes, we talked about how Near Field Communication (NFC) is the next game-changing technology for mobile advertising in the United States. For Asian markets, however, NFC is at a later stage, being a fully adopted technology with a wide variety of uses beyond marketing. For example, Pasmo, Tokyo subway’s rechargeable card has an embedded NFC chip, which allows passengers to enter the trains without having to take the cards out of their bags. Marketers in Asian markets are tapping into NFC’s huge potential as well. In Tokyo, advertising agency Shunkosha installed NFC chips in subway straps. When the user taps the straps the NFC chip sends a signal to the smartphone with URLs containing advertisements, discounts, or other information. “Strappy”, as the campaign was called, sent users advertisements from the travel agency H.I.S.

Asian markets, especially Japan and South Korea, have been ahead of the curve in numerous mobile innovations. The ill-fated QR code, 3G and 4G networks, and mobile email were ubiquitous in Japan when they were merely a buzz word in Western markets. David Steel, Executive VP of Strategy and Corporate Communications for Samsung Electronic explains that there are societal factors explaining why Western markets lag behind Asian markets in terms of the adoption of mobile innovations. He comments that 16% of Americans consider themselves “early adopters”, compared to 40% of their South Korean counterparts. In the interview video posted below,  Trevor Healy, CEO of [a•mo•bee], explains that an important factor fueling innovation and early adoption in mobile technology across South East Asia is the lack of personal computers and the pervasiveness of smartphones. He mentions that the increase in mobile advertising in this region is nothing short of 300- 400% in growth. Despite Asia’s head start in mobile advertising, the U.S. is trailing behind with noteworthy applications of NFC technology.

The emphasis for the U.S. seems to be on payment services like Google Wallet, Square, Intuit, and Paypal. Google Wallet uses an embedded NFC chip that stores credit card information on your smartphone. Instead of swiping a credit card, the NFC chip communicates with the payment receiver and completes the transaction wirelessly. According to Visa, this market is going to skyrocket with estimated transactions expected to increase from $27 million in 2012 to $40 billion in 2014.

In the U.S., companies are experimenting with a combination of print ads and mobile to create innovative campaigns, wooing costumers with their novel approach. In a pioneering effort, Lexus and Wired Magazine paired up to create the first print ad with an embedded NFC tag for their April 2012 issue. For readers with NFC-enabled phones, the ad brings up a video that showcases the new Enform® App Suite, which integrates popular mobile applications, such as Pandora, Yelp, and Open Table to the luxury vehicle.

NFC technology will disrupt the QR code trend with it’s more intuitive usage. For other areas of marketing like social media and location-based marketing, this technology will open the horizons to a more interactive arena. For print, NFC incorporates the web to a previously hard-to-track medium. With print ads directing people to the web, there is a bonanza of data for marketers to capitalize on. At the end, cutting through today’s clutter is a marketer’s Holy Grail and biggest challenge. NFC offers infinite possibilities for marketers to jump that hurdle.

By: Angela Romero

Twitter: @AngelaLRomero

Austin Allen, Marketing Associate

Austin@bars-tone.com

@austin_sf

NFC (Near Field Communication) is the next up and coming mobile technology that should change the game for mobile marketing, again.  You don’t have to have an App or try to fit that ugly little square into the capture area of your phone.  It takes away one step and requires less work than a QR Code.  In Tuesday’s blog I explained why I thought QR codes are dead as a marketing tactic, at least in the U.S.  NFC has a big potential in being more successful than QR Codes because it can transfer the same information without that extra step of having to load an app.  It’s easier to use too…

The future of mobile marketing will look like this.  A tag will be embedded in an ad, poster, and billboard (or on your dog’s collar if you feel the need).  Tap your NFC capable phone near the tag and information is sent directly to your phone.  You’re credit card might already have NFC in it, also called “Contact-less Payment”.  The excitement about NFC is currently building around payment, and receiving a receipt digitally as well, but it will have endless marketing uses as well.  The iPhone 5 is rumored to have this built-in technology as well as the Samsung/Google Nexus S which is already on sale.   When big name phones such as these implement the technology, there will be a new break-through in mobile marketing.  No more reaching over someone’s head on the BART trains to scan that tiny little square!  Bump and go.

Have you used NFC yet? Share your thoughts below!

Austin Allen, Marketing Associate

Austin@bars-tone.com

@austin_sf

If you still think QR Codes have a place in your marketing mix, you should reconsider.  A lot of us were really excited to see this mobile scanning technology take off, but it just isn’t.  We’ve written a few blogs about the subject, and filmed a man on the street short video as well.  Marketers have jumped on the QR Code bandwagon thinking they were becoming a part of a cutting edge marketing trend.  Yes, QR Codes can be found just about anywhere, and there might be more people who are scanning them.  But, it is still a relatively small portion of the people who actually see the add with the QR Code on it.  More non-marketing folk know how to use them and what they are, but it is just too inconvenient (if not socially awkward) to scan that QR Code conveniently located on the wall above someone’s head on that BART train.  There are a few big cities that might see a modest hit count on their ads but I would argue that for the most part, the buzz is waning.

I asked Craig Alexander, SVP of Client Services at Gumas what he thought about QR Codes.  Not surprisingly, he agreed with my position:  ”It’s hard to declare QR Codes dead because, frankly, they just never caught in with the American consumer like they did in Europe and Asia. Although marketers embraced the promise of QR Codes, I suspect that the extra step of having to scan a code to redeem a promotion or to learn more was a hindrance. By essentially eliminating that step, I believe that Near Field technology will allow mobile marketing to take hold in a way that QR Codes never achieved.”

In Bert Heymans’ presentation “QR Codes 2012 beyond the hype?” he touts the success of QR Codes as a marketing tactic because there has been a huge growth in use. For example, he sites a 1400% increase in scanning of codes from Q3 2010 to Q3 2011!  But if you look closely at the data, the “exponential growth” has stagnated toward the end of 2011.  It’s only a matter of time until that new car smell wears off.  It’s easy to achieve high growth numbers when you’re starting at a very small number.

In addition, while “Time on Page” metrics appear to be relatively high, keep in mind that mobile phones take a rather long to interact with on both 3G and Wifi networks. Time yourself the next time you try to fill out an information form on an iPhone.  ”Time on Page” isn’t a good measurement of success with QR Codes.  They aren’t interacting with your landing page for a longer period of time because of the QR Code.  Finally, the demographic most likely to be early adopters of a new technology (18- 22 yrs old), isn’t using them either.  I think that’s  a pretty good sign that they aren’t penetrating.  If the tech savvy demographic isn’t using them, the other demographics probably won’t ever use them.

I see two essential problems with QR Codes:

• QR Code Readers don’t come native on smart phones. It’s a lot of work for people to initially download the scanner apps and figure out how to use them.  The people that do use them know what they are about and how to do it.  Right there, a person must already be interested in using them.  Would you watch a TV ad if you had to go through a process to receive the information in the ad?

• Scanning QR Codes is a bit socially awkward. How cool is it to hold up your phone and try to scan the code?  Is this weirdo trying to film me? Take a picture? Oh, they are trying to scan that ugly bar code on that ad.

I have more faith in the up-and-coming, but not necessarily new, NFC (Near Field Communication) technology (which will be covered in a separate blog on Thursday).  The moral of the story is this: marketers are eager to tap into your handset and unlock mobile marketing, but QR Codes aren’t the solution, at least for the American consumer.  My view on this might be unpopular with marketers because the promise of mobile is so high. But take heart, the more exciting emerging marketing trend will be NFC, which I think has a more lasting place for mobile marketers. What do you think?