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NFC
News and Views
Researching consumer perceptions towards NFC
R e c e n t r e s e a r ch f r o m
Posterscope UK and USA has
found that there is every sign
that Near-Field Communication
(NFC), a wireless technology that
allows you to make transactions,
exchange digital content
or connect with other NFC
electronic devices by touching
them together, will become
commonplace in the future as
it is incorporated into more
mobile devices than ever before,
and is increasingly adopted for
everyday usage.
   Previous research studies around
NFC and mobile payments e.g.
Google Wallets have focused on
the low awareness and usage
of the technology. With very few       an ideal opportunity to understand      NFC technology per se was higher.       ‘easy access to web content’ and
mobile phones currently being          perceptions of the mobile advertising   After being given a description of      ‘comparing prices’. Obviously there
NFC enabled (roughly 5-10%) this       interaction experience.                 what NFC technology was, 60%            were some smartphone owners
is 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 NFC
future potential for NFC, as well      complex terminology or definitions      NFC technology was demonstrated         posters in the future - so we asked
as other mobile technologies, and      (e.g. NFC, Augmented Reality)           through an OOH video, the number        them why? It was pleasing to see
the opportunities they provide for     which, whilst may be familiar           of respondents’ who stated that         that security/viruses were not
Out-of-Home media, Posterscope         terms within the media world, are       it was important to have NFC            perceived to be as much of a barrier
partnered with Clear Channel and       not necessarily in the real world.      functionality on their next phone       as could have been expected. The
commissioned an indepth research       To overcome this, the survey            doubled from 36% to 70%.                main reason given was that it was
study into the perception and          contained detailed descriptions,           Smartphone owners also               a gimmick, but in the future when
future adoption of NFC. The study,     images and videos about the             perceived that various NFC              consumers have become educated
conducted in Feb 2012 in both the      various mobile technologies. This       technologies were useful, in            on the benefits of Interacting with
UK and USA, consisted of 1,000         lead to greater levels of awareness     particular ticketing e.g. Oyster Card   OOH posters hopefully this barrier
online 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 if
owners who had used at least one of    results will demonstrate, a more        (54%) perceived that using NFC          they saw an OOH advertisement
the following seven technologies on    positive view of the technologies       technology to interact with posters     that interested them, they would
their devices: Quick Response (QR)     and their future potential.             would be useful - this applied to       be likely to purchase directly from it
codes, Mobile Bluetooth, Barcode          So what insight did we gain          posters in multiple OOH locations       using NFC. This applied to multiple
Scanner, Augmented Reality, Visual     from the research? Firstly, that        providing opportunities for all OOH     product categories and provides
Search, NFC and Mobile Payments.       an education job is required. The       media owners and formats. The           the ultimate opportunity for brands
In 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 research
of the technologies to interact        whether their phones were NFC           ‘downloading vouchers/special           findings go to http://wp.me/
directly with advertising, providing   enabled. However, awareness of          offers’, ‘getting local information’,   pyB4y-lg
NFC: What Lies Ahead?
                                         “Hero ideas create a virtuous circle of increased
We canvas industry opinion

                                         interest, investment and engagement”
We increasingly talk about the
connected consumer, and of
convergence. One of the key
drivers of this convergence –
and one of the technologies that
will make consumers even more
connected – is NFC.
   We’re familiar with the many
benefits that NFC contactless
technology is already bringing to the
consumer, propelled in the main by
its integration into smartphones. And
for the advertiser, NFC allows quick,
simple, scalable and affordable
interaction between mobiles, poster
site and ultimately their brand - lots
of boxes ticked.
     NFC goes far beyond simply
serving as a proxy wallet. We can
think of it as a gateway to a whole
host of rich mobile content and new
experiences, itself the springboard
to new levels of consumer
engagement.
   To us this suggests that NFC
stands a good chance of emerging
as the dominant technology in
the mobile area, but it’s important
to consider both the barriers
and drivers which will ultimately
determine 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 codes
explored recently at the SXSW            having to enter IDs and passwords,    think there will be lots of posturing     based now, but NFC based in the
festival in Texas and here we canvas     or pay for your parking by tapping    from the likes of Google and              future) and the banks are launching
opinion 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 short
Director Proxama is keen to              over the internet and use your        are keen to be seen as the new            term, but expect to see much
underline 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 Strategy
so many potential applications;            However, Quitmann also warns that   application or forming part of a third    Officer Isobar, suggests that we
voucher and coupon distribution for      “Unappealing content could slow the   party wallet. It is quite possible that   need to think very carefully about
brands and retailers is an obvious       growth of NFC as an engagement        the largest retailers will decide to      the consumer benefit. “The question
one. 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 a
or, for example, at a bus shelter        more than an updated version of       – a Tesco or Sainsbury’s Wallet? -        credit card problem? Are they too
for redemption in a local store,         cumbersome QR codes. A single tap     these giants might well think that        heavy? Do they take up too much
drives footfall and sales.” Quittman     should send the consumer directly     now is the time to move into the          space? Do people sit around and
believes that NFC for brands and         to the most engaging content and      payment space more vigorously             think “cash is such a difficult thing
retailers 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 data
cites 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 is
to immediately connect to the local      Quittman adds “Things may look        be dismantled – Apple is launching        horse-before-cart in my opinion; we
“We need to embrace the real benefits of ‘what you
                                                       touch is what you get’.”
need to embrace the real benefits of “what you
touch is what you get” in a low-risk way to ease a
transition and lower the barrier of adoption. Right
now this wallet push by banks and carriers seems
to be more about them than about consumers.”
   In order for NFC to be adopted into the
mainstream, Nicholas believes that “NFC
interaction should be made fun and informal
first and foremost - that’s why gaming and
entertainment are such nice fits. They help
people to understand the ‘metaphor’ so that they
ask themselves “Wouldn’t it be great if I could
do this with everything?” And when they start
thinking this way, there are few limitations to what
the consumer will then grant us permission to do
with NFC.
   Furthermore our goal shouldn’t simply be
to move everyone towards NFC as quickly as
possible – rather it should be to deliver awesome
brand experiences to people.
   But ultimately it’s the tangibility of an NFC
interaction that will prove one of its most
compelling benefits – unlike QR codes, it’s a very
natural interaction, very easy to understand, with
a very low learning curve” suggests Nicholas.
    Stephen Bedggood, NFC Product Manager
O2 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 educational
payments, but it is far more than that. NFC has        discussions regarding the battle for ownership –      challenge for NFC, Edwards responds “Like all
been used for Transit for many years now and           some healthier than others. The healthy battles       innovation it will spread through the network of
this is probably the number one use case in            are driving serious consideration as regards          potential users. Initially we need to look after
nearly all developed countries. Here in the UK,        customer servicing, liability and best practice for   the innovators, the first 3% who will buy just
the 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 messages
Card which sees over 2 million journeys made           open access to the secure keys, who would be          for appropriate brands in appropriate contexts. IT
each 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 and
attractions, allowing people to further interact       giants, their bank, their mobile operator or the      contexts should evolve with them. Hero ideas that
with the world around them, for example, finding       handset manufacturer? Can the internet giants         create real value are critical to create a virtuous
out more about an object in a museum or perhaps        provide the UK call centres to support customers      circle of increased interest driving increased
viewing 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, our
content to be appealing; “Simply linking to            for every bank and every loyalty card we have         contributors appear unanimous in their view of
a 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 share
engaging and not providing that consumer               they would have to switch between this app            here at Posterscope. There are undoubtedly
with a memorable experience. An example of a           and that app to use this loyalty card with that       some sizeable obstacles ahead which the market
positive experience might be turning the SMS-          payment card. In the end, collaboration between       must overcome in order to offer the consumer
based parking experience into one where I tap a        operators and between banks is healthy as it          the most user-friendly NFC experience, be they
sticker which launches a location-based parking        drives the answer to these questions and offers       content, ownership or logistics-related. But with
app, knows my registration and payment details         the consumer choice.”                                 so many stake-holders with their eyes on the
and allows me to enter how long I want to stay.           Jean-Paul Edwards, Executive Director,             NFC prize we are confident that there is sufficient
Or, alternatively, being able to tap a wine bottle     Futures Manning Gottlieb OMD takes the view           momentum to drive this through successfully, and
in a shop to access recommendations of which           that unappealing content could seriously slow the     where the curious and contented consumer goes
food it best accompanies, provide other drinkers’      growth of NFC. “All media runs this risk but NFC      the smart advertiser soon follows. Interest in NFC
reviews 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 given
These 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 new
ownership has an upside in so much as they             with non-interoperable systems likely to stifle       investment in the medium.

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NfC News and Views

  • 1. NFC News and Views Researching consumer perceptions towards NFC R e c e n t r e s e a r ch f r o m Posterscope UK and USA has found that there is every sign that Near-Field Communication (NFC), a wireless technology that allows you to make transactions, exchange digital content or connect with other NFC electronic devices by touching them together, will become commonplace in the future as it is incorporated into more mobile devices than ever before, and is increasingly adopted for everyday usage. Previous research studies around NFC and mobile payments e.g. Google Wallets have focused on the low awareness and usage of the technology. With very few an ideal opportunity to understand NFC technology per se was higher. ‘easy access to web content’ and mobile phones currently being perceptions of the mobile advertising After being given a description of ‘comparing prices’. Obviously there NFC enabled (roughly 5-10%) this interaction experience. what NFC technology was, 60% were some smartphone owners is 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 NFC future potential for NFC, as well complex terminology or definitions NFC technology was demonstrated posters in the future - so we asked as other mobile technologies, and (e.g. NFC, Augmented Reality) through an OOH video, the number them why? It was pleasing to see the opportunities they provide for which, whilst may be familiar of respondents’ who stated that that security/viruses were not Out-of-Home media, Posterscope terms within the media world, are it was important to have NFC perceived to be as much of a barrier partnered with Clear Channel and not necessarily in the real world. functionality on their next phone as could have been expected. The commissioned an indepth research To overcome this, the survey doubled from 36% to 70%. main reason given was that it was study into the perception and contained detailed descriptions, Smartphone owners also a gimmick, but in the future when future adoption of NFC. The study, images and videos about the perceived that various NFC consumers have become educated conducted in Feb 2012 in both the various mobile technologies. This technologies were useful, in on the benefits of Interacting with UK and USA, consisted of 1,000 lead to greater levels of awareness particular ticketing e.g. Oyster Card OOH posters hopefully this barrier online 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 if owners who had used at least one of results will demonstrate, a more (54%) perceived that using NFC they saw an OOH advertisement the following seven technologies on positive view of the technologies technology to interact with posters that interested them, they would their devices: Quick Response (QR) and their future potential. would be useful - this applied to be likely to purchase directly from it codes, Mobile Bluetooth, Barcode So what insight did we gain posters in multiple OOH locations using NFC. This applied to multiple Scanner, Augmented Reality, Visual from the research? Firstly, that providing opportunities for all OOH product categories and provides Search, NFC and Mobile Payments. an education job is required. The media owners and formats. The the ultimate opportunity for brands In 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 research of the technologies to interact whether their phones were NFC ‘downloading vouchers/special findings go to http://wp.me/ directly with advertising, providing enabled. However, awareness of offers’, ‘getting local information’, pyB4y-lg
  • 2. NFC: What Lies Ahead? “Hero ideas create a virtuous circle of increased We canvas industry opinion interest, investment and engagement” We increasingly talk about the connected consumer, and of convergence. One of the key drivers of this convergence – and one of the technologies that will make consumers even more connected – is NFC. We’re familiar with the many benefits that NFC contactless technology is already bringing to the consumer, propelled in the main by its integration into smartphones. And for the advertiser, NFC allows quick, simple, scalable and affordable interaction between mobiles, poster site and ultimately their brand - lots of boxes ticked. NFC goes far beyond simply serving as a proxy wallet. We can think of it as a gateway to a whole host of rich mobile content and new experiences, itself the springboard to new levels of consumer engagement. To us this suggests that NFC stands a good chance of emerging as the dominant technology in the mobile area, but it’s important to consider both the barriers and drivers which will ultimately determine 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 codes explored recently at the SXSW having to enter IDs and passwords, think there will be lots of posturing based now, but NFC based in the festival in Texas and here we canvas or pay for your parking by tapping from the likes of Google and future) and the banks are launching opinion 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 short Director Proxama is keen to over the internet and use your are keen to be seen as the new term, but expect to see much underline 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 Strategy so many potential applications; However, Quitmann also warns that application or forming part of a third Officer Isobar, suggests that we voucher and coupon distribution for “Unappealing content could slow the party wallet. It is quite possible that need to think very carefully about brands and retailers is an obvious growth of NFC as an engagement the largest retailers will decide to the consumer benefit. “The question one. 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 a or, for example, at a bus shelter more than an updated version of – a Tesco or Sainsbury’s Wallet? - credit card problem? Are they too for redemption in a local store, cumbersome QR codes. A single tap these giants might well think that heavy? Do they take up too much drives footfall and sales.” Quittman should send the consumer directly now is the time to move into the space? Do people sit around and believes that NFC for brands and to the most engaging content and payment space more vigorously think “cash is such a difficult thing retailers 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 data cites 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 is to immediately connect to the local Quittman adds “Things may look be dismantled – Apple is launching horse-before-cart in my opinion; we
  • 3. “We need to embrace the real benefits of ‘what you touch is what you get’.” need to embrace the real benefits of “what you touch is what you get” in a low-risk way to ease a transition and lower the barrier of adoption. Right now this wallet push by banks and carriers seems to be more about them than about consumers.” In order for NFC to be adopted into the mainstream, Nicholas believes that “NFC interaction should be made fun and informal first and foremost - that’s why gaming and entertainment are such nice fits. They help people to understand the ‘metaphor’ so that they ask themselves “Wouldn’t it be great if I could do this with everything?” And when they start thinking this way, there are few limitations to what the consumer will then grant us permission to do with NFC. Furthermore our goal shouldn’t simply be to move everyone towards NFC as quickly as possible – rather it should be to deliver awesome brand experiences to people. But ultimately it’s the tangibility of an NFC interaction that will prove one of its most compelling benefits – unlike QR codes, it’s a very natural interaction, very easy to understand, with a very low learning curve” suggests Nicholas. Stephen Bedggood, NFC Product Manager O2 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 educational payments, but it is far more than that. NFC has discussions regarding the battle for ownership – challenge for NFC, Edwards responds “Like all been used for Transit for many years now and some healthier than others. The healthy battles innovation it will spread through the network of this is probably the number one use case in are driving serious consideration as regards potential users. Initially we need to look after nearly all developed countries. Here in the UK, customer servicing, liability and best practice for the innovators, the first 3% who will buy just the 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 messages Card which sees over 2 million journeys made open access to the secure keys, who would be for appropriate brands in appropriate contexts. IT each 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 and attractions, allowing people to further interact giants, their bank, their mobile operator or the contexts should evolve with them. Hero ideas that with the world around them, for example, finding handset manufacturer? Can the internet giants create real value are critical to create a virtuous out more about an object in a museum or perhaps provide the UK call centres to support customers circle of increased interest driving increased viewing 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, our content to be appealing; “Simply linking to for every bank and every loyalty card we have contributors appear unanimous in their view of a 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 share engaging and not providing that consumer they would have to switch between this app here at Posterscope. There are undoubtedly with a memorable experience. An example of a and that app to use this loyalty card with that some sizeable obstacles ahead which the market positive experience might be turning the SMS- payment card. In the end, collaboration between must overcome in order to offer the consumer based parking experience into one where I tap a operators and between banks is healthy as it the most user-friendly NFC experience, be they sticker which launches a location-based parking drives the answer to these questions and offers content, ownership or logistics-related. But with app, knows my registration and payment details the consumer choice.” so many stake-holders with their eyes on the and allows me to enter how long I want to stay. Jean-Paul Edwards, Executive Director, NFC prize we are confident that there is sufficient Or, alternatively, being able to tap a wine bottle Futures Manning Gottlieb OMD takes the view momentum to drive this through successfully, and in a shop to access recommendations of which that unappealing content could seriously slow the where the curious and contented consumer goes food it best accompanies, provide other drinkers’ growth of NFC. “All media runs this risk but NFC the smart advertiser soon follows. Interest in NFC reviews 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 given These 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 new ownership has an upside in so much as they with non-interoperable systems likely to stifle investment in the medium.