Is NFC The Next Big Opportunity For Video Advertising?

In Steven Spielberg’s 2002 film “Minority Report,” a pre couch-jumping Tom Cruise plays a hero cop in a dystopian 2054 America. One of the more memorable details in the film (perhaps owing to its chilling implications) was the presence of retina-scanning billboards that beam custom-tailored ads directly into one’s skull. (You can watch the scene here.) If you know anything about near-field communication, though, you probably won’t be surprised to learn that this technology, albeit in a slightly less Orwellian form, has hit the streets 40 years earlier than Spielberg predicted. All of this is to say that as science fiction makes its inevitable transition into science fact, there will once again be enormous opportunities for those agencies and brands that are among the first to stake a claim on this new digital frontier.



Let’s start at the very beginning

The last few years have not been easy for the much-maligned QR code. While some of the harshest critics deride them as being “worse than useless,” more even-handed journalists argue that they’re simply “useless.” But wherever you stand on QR codes, it cannot be disputed that marketers have been furiously trying to make them “happen” ever since they first came into vogue in 2011. And while many QR codes simply link to a home or product information page, some of our more innovative colleagues in the marketing world have been attempting to use them to trigger mobile video in an effort to bridge the physical and mobile worlds with video ads.

Unfortunately, public reaction to QR codes has been tepid at best. The articles linked above put the numbers at just 15%-19% of smartphone users, with penetration dropping precipitously when you start breaking the numbers down into key demographics. This is unsurprising when you note that phones still don't come with a native reader. Unless you have an app that uses QR codes as a utility (such as parking meters), it's tough to ask the average consumer to download a reader.

Onward into the future

NFC technology has been in many Android devices for years, going largely unnoticed as retailers and advertisers grapple with how to use this new tool to create the best customer experience. Fortunately, Apple has just entered the game in a big way, integrating NFC into the iPhone 6 (as goes Apple, so goes the industry). NFC is going mainstream, and NFC payments are poised to explode with Apple Pay.

This is a huge opportunity to get video content in front of consumers.  NFC could trigger video spots on phones as a pre-roll or post-roll ad while the customer makes a payment at the register. And because the POS system knows everything that was just purchased, targeted advertising will become incredibly simple and accurate.

However, as the venerable poet Jerry Garcia once wisely pointed out, “every silver lining’s got a touch of grey." The dream of ultra-targeted point-of-sale video content may remain just a dream, as the mobile payment system in its early stages remains fragmented. According to a recent Nielsen survey, nearly half of all mobile payment system users prefer making payments using a QR code system. Anticipating this sea change years ago, a federation of some of the country’s biggest retailers (including Walmart, Target, and Rite Aid) have developed their own mobile payment system called CurrentC, and they’re not interested in doing business with Apple Pay users. If you’re not sure why this poses a problem for marketers, talk to anybody who owns a Betamax, a Zune, or a robust collection of HD DVDs. We need to see how this all plays out first.

Of course, NFC tech isn’t just a convenient way to pay for the groceries. The potential uses for NFC in out-of-home marketing are nearly infinite. Several agencies have already begun exploring the possibilities. One campaign prompts consumers to tap their phone on an NFC placard to receive location specific information and special offers. Another invites users to tap a movie poster in order to watch the latest trailer on their phone.

Without a doubt, NFC has an awkward adolescence ahead of it. Far from ubiquity, it will need all the support it can get from big backers like Apple. Likewise, advertisers will have to figure out interesting and innovative ways of using the technology in order to engage the user. In spite of these challenges, though, NFC looks to be one of the most promising new opportunities for marketers to reach the mobile phones of consumers, especially using video content.

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