• by September 26, 2011

You may have noticed all the news about the launch of Google Wallet the last few days. Or maybe you didn't. Maybe you saw that in addition to MasterCard, now Visa, Amex and Discover have all signed on. Well that makes sense. They're all credit card companies. The real question is, "Why should I care?"

The obvious answer is that as consumers use their phone as a form of payment, it will also store all of their credit cards, loyalty cards, daily deals and coupons right on the phone. And if they can be stored on the phone and redeemed on the phone, marketers will most certainly want to deliver offers to the phone through mobile apps and the like.

You will start to see smart posters, smart store shelves, smart street furniture where you can tap to get an offer and this will definitely be transformative for the Out of Home industry - and largely killing QR codes in the process. But that's just the tip of the iceberg.

The real value of Near Field Communications (NFC), and where it will change the way we all do business, is in the data. True, direct attribution of online and mobile advertising will become a reality, and real-time purchasing data will create immense value in targeting. Depending on who you ask, about 95 percent of all transactions take place in the offline world -- or 20 times as many as online. Search, contextual targeting, behavioral targeting, retargeting and so on are all based upon trying to infer what someone is likely to buy based on sites they have visited and mapping some stale - by internet standards, at least - offline data on prior purchasing behavior.

Imagine the marketing intelligence that will be readily available when every purchase a consumer makes is immediately fed into the cloud and accessible to ad networks and exchanges to serve more relevant advertising to that consumer online and to their mobile device. What would the value be of that type of targeting?

Now move on to CPM, CPC, CPA and so on. What are these but feeble attempts to move further and further down the purchase funnel to try to prove attribution to the advertiser? Again, marketers are restricted by the requirement to rely on post-purchase data and third-party aggregators to try to match up advertising touch points to an actual brick-and-mortar purchase. Google has server farms the size of Texas and a market value north of $170 billion, based in no small part on crunching an enormous amount of data to try to prove value to advertisers of their search and display ads, able to link online ads to only about the 5% of all purchases that take place online directly.

What's the value of all that data? Well, what's $170 billion times 20?

Jason Gross, Director of Strategy and Marketing, VeriFone Media