Mobile operators join up to give NFC ads a major boost
M-COMMERCE: Mobile operators join up to give NFC ads a major boostThursday, June 23, 2011 10:47 AM (Source: Marketing Week)
A joint venture between Everything Everywhere, O2 and Vodafone is intended to deliver the technology that will speed up consumer adoption of near field communications (NFC) services, which enable shoppers to transfer the entire contents of their physical wallets on to a SIM-based storage system on their mobiles.
But as well as this, it aims to provide brands with a single point of contact to book advertising space, create offers, coupons, tickets for transport and events and loyalty cards - all which can be stored on a consumer's smartphone and redeemed in shops.
The telecoms brands plan for the new 'one-stop shop' system to allow them to target defined demographics while extending their campaign reach across all three networks.
The contactless payments market is predicted to reach more than pound 200bn by 2014, according to IE Despite only one live service at present - Orange and Barclaycard's Quick Tap - many brands are discussing how they can take advantage of the new technology.
Internet Advertising Bureau director of mobile and operations Jon Mew says: "NFC is something we get asked about a lot. It has been a real hot topic in the past six months, with lots of interest leading up to the Olympics."
He adds that the joint venture gives advertisers more confidence because campaigns across operators will be easier to manage, although consumer confidence is not yet at a high level.
"However, you only have to look at e-commerce to see it won't take long to reach mass uptake. And we expect m-commerce to have a quicker uptake than e-commerce because consumers are comfortable with the technology."
Consumers appear to have quickly adapted from paying through their PC to paying through their mobile phones. Ebay says an item was bought every two seconds through its app in 2010, just two years since it launched on the iPhone.
O2 business development director Tim Sefton says the company has already received a significant amount of enquiries from retailers, banks and other brands since the announcement of the joint venture last week.
He says: "The reaction has been particularly positive because we are creating a combined customer base with defined individual segments for targeting."
Advertisers can target the combined tens of millions of customers in the joint venture by gender, location, age and interests - such as cars, holidays and clothing.
Brands also have the opportunity of getting involved with the venture by adding their customer data for advertisers to target, although there are no plans yet to allow companies to join on an equity share basis. Everything Everywhere, Vodafone and O2 will hold an equal third equity share of the venture.
Neil Garner, chief executive of NFC solutions provider Proxama, says that to take advantage of NFC advertising when the joint initiative launches, which is expected to be at the end of the year, marketers need to start piloting campaigns to explore its potential - as they would for any other technology.
He adds: "One of the key benefits NFC offers is the increased measurability and accountability, because all transactions and interfaces can be tracked. It's why brands like Google are so keen to be a key player in the industry."
With all the possibilities NFC can offer, from vouchers to measurement, it may be difficult for brands to know where to begin on their mobile journeys.
Berney warns that education for brands will be "as critical" as simplifying commercial activities. This venture is just one step on the way to NFC becoming as commonplace as SMS.
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