Dec 02, 2013Since marketing came of age as a business discipline in the early 1900s, generations of consumers have found themselves the passive recipients of pitches designed to communicate the value of products and services, to encourage immediate purchases and engender long-term loyalty. Companies have built their brands and boosted their revenues with print and broadcast media, and, more recently, e-mail and the Web.
Now, companies are taking marketing to the next level by using radio frequency identification—in particular, Near Field Communication technology—to make their campaigns more personal and create experiences, at events and in stores, that entice consumers into being active participants. RFID marketing efforts focus on improving brand awareness, loyalty and sales through social media and interactive advertisements and promotions.
Some RFID firms that provide access-control solutions now offer applications that enable event attendees to share their experiences with friends via social-networking sites (see RFID News Roundup: Intellitix Links RFID and Facebook at Coachella Festival and Nike Korea, Nestlé Philippines Like U-Like). The Connect & Go system, developed by RFID Academia, was used at the 2013 Osheaga Music and Arts Festival, in Montreal. Attendees were issued RFID bracelets to access the event, post photos on Facebook at RFID-enabled kiosks and enter contests to win prizes.
There also are startup marketing firms worldwide that specialize in using RFID technologies. Blue Bite, Gauge Mobile and Proxama, for example, offer NFC systems that deliver digital media content—including ads, coupons and video promotions—to mobile phone users within targeted geographic locations. Blondefish, dwinQ, Liquid Lemon, Mediamatic Lab and Publicis E-dologic use RFID at events to connect attendees to their social networks. Cubocc and Pittsfield ID Technologies are among the companies that rely on RFID for in-store marketing and branding solutions.
Consumers seem to like participating in RFID-enabled marketing campaigns—whether it's posting photos from an activity or event on Facebook in real time, joining a loyalty program to receive on-the-spot discounts, or holding an NFC-enabled mobile phone up to a smart billboard to download exclusive video content about a movie being advertised.
That's one reason Lexus, Vail Resorts and other forward-thinking companies that have employed RFID marketing campaigns believe they are getting a return on their investment. "When people choose to reach out and touch, your engagement factor is going to be higher because they have decided that they want something," says Debbie Arnold, NFC Forum director. "And because it's easy, they will want to do it again."
Many of these programs also provide analytic software that lets companies capture key performance indicators, to evaluate the success of the campaign. Often, consumers provide contact or other personal information in exchange for RFID-enabled event passes or to enroll in loyalty programs. "Think of all the things you can do from an advertiser or store or brand perspective once the user agrees to be tracked," says R "Ray" Wang, principal analyst and CEO at Constellation Research. The data from those transactions can be used to help "figure out how to get them to buy and respond. You can market against, making it easier to serve them what they want."
But Gauge Mobile's CEO Tony Vassiliev admits there's still a bit of a guessing game going on regarding the best use cases for NFC marketing. In 2011 and 2012, Gauge Mobile partnered with two Canadian advertising firms to deploy NFC smart posters on university campuses and at transit shelters. Consumers could use their NFC-enabled phones to tap the smart posters to receive discount coupons, enter contests, win movie passes or purchase products.
The campaigns met with mixed results. They were more successful with a younger, hipper audience, Vassiliev says, but many people were not ready for NFC. Campaigns that rely on NFC mobile phones are limited by the fact that many consumers don't know the technology is in their phones. ABI Research reports that 125 million NFC phones were shipped worldwide in 2012, though Apple has not embedded the technology in its iPhone. Still, while RFID marketing is relatively new, companies are gaining a better understanding of what does or doesn't work, and they are developing best practices (see "Consumer Marketing Tips From the Pros" on last page).
Branding via Social Media
One of the first companies to embrace RFID marketing is Vail Resorts, the leading U.S. mountain resort operator. RFID has been a part of vacationers' experience there since the 2008-09 ski season, when the company introduced RFID-enabled ski passes (see Benefits Up and Down the Ski Slope). Building on the RFID infrastructure, for the 2010-11 season, Vail debuted EpicMix, social-media tools that allow guests to track on-mountain stats, such as days skied, lifts ridden and vertical feet accumulated, and share them with family and friends on their Facebook or Twitter accounts.
EpicMix also offers the ability to share professional photos of skiers taken on Vail's trails in near-real time. According to a Facebook case study, 300,000 skiers were actively using EpicMix as of February 2012, and one-third were actively using Facebook to share their experiences, creating more than two million posts to Facebook, roughly half of which were photos. "We drive a much larger social engagement and greater brand advocacy through photos getting posted to Facebook," says John Lilley, senior director of digital applications for Vail Resorts.
Today, guests "expect to participate with EpicMix," Lilley says. "There's a real loyalty component to it," he adds, in that it brings people back to vacation with Vail. "The future of EpicMix is to continue providing a rich guest experience through on-mountain gamification and social-media integration," he says.
RFID is such an important part of EpicMix, Lilley says, because it doesn't make the skier work for the benefits, aside from proactively registering for the service. "We have gantries around each entrance to our lifts, and as the individual passes through, we read the UHF tag in their ski pass and register the activity," he says. "All the data is there if the guest wants to engage with it. We've debated about using GPS, but with RFID you don't have to activate your phone, worry about battery life or manage a phone in harsh conditions, in the cold and with gloves on."
Increasingly, companies that sponsor events—from the Olympics to car shows and golf tournaments—are turning to RFID and social media to better engage visitors and promote their products. Event marketers have always struggled with the fact that events have been one of the least measurable forms of marketing, says Laura Moody, managing director of Blondefish, which has handled projects for Adidas, Converse and Smirnoff that leveraged RFID to let guests share activities, videos and photos with friends on social media. "Literally, it's a simple tap and people are a part of something," she says. "It's a little more personal, and they love it."
Now, the struggle is getting easier, Moody says, thanks to RFID's ability to track people around the experience, and to use tools such as Facebook analytics to understand how users' online engagements as advocates trended in terms of advocacy for the brand. On average, she reports, "for every person you connect with at an event, you reach 580 more friends online" via Facebook or 400 via Twitter. Brand-related comments and click-throughs to a Facebook page, Web site or promotional offer also can be assessed. "What we do is just so measurable," she says, "and that's what makes it very exciting to the brand."
During the 2012 and 2013 U.S. Open Men's, Women's and Senior golf tournaments, luxury carmaker Lexus worked with dwinQ to implement an RFID social-media solution. Visitors to the Lexus Performance Drive Pavilion provided their e-mail and some other personal data to receive an RFID card they could swipe at kiosks to play interactive games and have their photo snapped with the U.S. Open Championship Trophy. RFID readers at each station collected information about the activity and photos, which were transmitted to Facebook, Twitter or YouTube. This allowed users' friends and family to engage with the Lexus brand as well, says Adrian Si, events and partnerships manager for Lexus. "We saw with RFID that we could tie in to certain bits of social media," he adds. "So that gave us a built-in amplification process, which was good for us from a branding and engagement perspective."
DwinQ worked with Cadbury on a similar project during the 2012 Summer Olympics in London. Some 20,000 visitors at the Cadbury House used RFID badges to check in, activate games and share photos. This real-time sharing led to 7 million earned impressions on Facebook, says Patrick Sweeney, president and CEO of dwinQ (also founder of ODIN Technologies, now part of Quake Global, which deployed the RFID technology for Vail Resort's implementation). "To get that exposure during the Olympics on the BBC would have cost more than $2 million," Sweeney says. "Cadbury paid about a tenth of that for RFID activation. So, $200,000 for $2 million worth of value is very tangible ROI."
Interactive Ads and Promotions
Companies and organizations are trying a variety of RFID marketing tactics to engage consumers and turn them into customers. At a recent concert in Miami, Post Foods passed out cereal samples and NFC-enabled cards that people could tap with their phones to visit a URL containing videos, music and concert updates (see At Miami Concert, NFC RFID Helps Post Foods Market Its Products). In Wired magazine's April 2012 issue, an NFC tag was embedded in a Lexus car ad. Consumers could use NFC-enabled phones to retrieve video and other content regarding the automotive company's latest offerings (see RFID-enabled Lexus Ad Debuts in Pages of Wired Magazine).
This year, California's Sacramento Kings basketball team provided season ticket holders with NFC loyalty cards, which could be used at designated terminals within the arena to accrue reward points. "One NFC tag did multiple things to create multiple revenue channels," says Matthew Bright, director of technical marketing at Kovio, which develops and manufactures printed silicon products for NFC markets. "It was a trading card, and that by itself was a cool item. But it also could be a discount card at the point of sale, and when a user tapped it with an NFC phone, he or she got exclusive content." That access to behind-the-scenes content connects fans with their team and feeds their loyalty, Bright says, and more loyal fans attend more games and buy more team-related items.
In May, Blue Bite and Creative Mobile Technologies (CMT) announced they are working together to enhance the content delivered via CMT media screens in taxicabs. Blue Bite's mTag platform will be installed in 5,000 cabs in Anaheim, Boston, Chicago, New York, Philadelphia and San Francisco. Riders will be able to tap their NFC-enabled smartphones (or use the QR code) to download music, videos, promotional information, coupons and maps.
A recent NFC promotion for Hellmann's Mayonnaise at a supermarket in São Paulo, Brazil, increased sales by 68 percent, according to Brisa Vicente, an account director at the Brazilian advertising and marketing agency Cubocc, which developed the campaign. RFID readers and antennas were installed on store shelves, and shopping carts were equipped with RFID tags and tablet computers. As shoppers walked by, say, the vegetable section, a video of a salad with a mayonnaise dressing would play on the screen. A consumer could use the touch screen to be directed to the other ingredients in the recipe and to share the recipe with friends on social networks (see In Brazil, RFID Is an Important Ingredient to the Marketing of Hellmann's Mayonnaise).
Marketing RFID Marketing Solutions
While RFID marketing faces some challenges, industry insiders believe it will become commonplace as consumers become more familiar with their NFC phones and retailers learn how to exploit these innovative marketing possibilities. In the past year, Samsung has has increased consumer understanding of NFC as a fun technology, with its Galaxy S III Android smartphone commercials that highlight users sharing videos and downloading goodies like music through smart posters, says Robert P. Sabella, the founder of NFC Bootcamp and AccelerateNFC. "Really," he says, "the Galaxy S III changed the discussion, being the first real viable alternative [to the iPhone] for people to use with NFC in it. Now people are starting to understand that they can tap and something will happen."
The adoption of item-level tagging in stores is also opening the door to creative marketing. Retailers that adopt item-level RFID to improve inventory management can enhance the shopping experience for their customers, says Jill West, senior manager of marketing communications at RFID vendor Impinj. Consider Patrizia Pepe, an Italian fashion designer that has tagged all its product items—some two million of them—to improve warehouse operations and logistics. The company installed video "totems" at retail locations in Florence and Rome. As a shopper passes by with a tagged item, the totem displays product information, such as details about a garment's construction, videos of models wearing the clothes and advice on coordinating items (see Patrizia Pepe Brings Efficiency to Its Supply Chain).
If supermarket retailers don't want to pay for RFID technology, consumer packaged goods companies likely will, says Michael Liard, VP of auto-ID at VDC Research. He points to an active RFID solution, developed by Zebra Technology in partnership with VisibleBrands, that offers targeted promotions to shoppers who enroll in loyalty programs. "They know Suzy Shopper is there, what she likes because she is a loyal customer, and now it's possible to push a real-time dynamic market message to her" as well as maybe a coupon to her smartphone for the advertised product, Liard says.
The catch, Liard says, is that the solution uses ultrawide-band technology, the most expensive real-time location system option. But, he adds, "CPG companies can learn what resonates with Suzy and what would be more likely to get her to spend in the store, especially as the system gets smarter over time. Promotions management and their success measurement are often referred to as the 'black hole' of retail, but with something like this you'll know in real time that an offer or promotion is not resonating with any, most or individual customers."
Meanwhile, companies from Nissan Europe to Sunglass Hut in South Africa are embracing RFID-enabled social media. The connection between social media and events isn't a fad that will fade, dwinQ's Sweeney says. "Connecting events to social media is a new functionality that's going to be required of every event going forward," he says.
"You can find out where users went and what they did, which amplification or activation sites were the most engaging, so there's immediate data back on engagement both on-site and on Facebook to know where to spend money, where investments worked," Sweeney says. Data mining, especially with a good social media operating system, lets marketers go deep into Facebook and Twitter to pull back information about user age, geography, education level and relationship status, and that, he says, is "all-important information marketers love and CMOs [chief marketing officers] are demanding."
Consumer Marketing Tips From the Pros
"Make it easy. You've probably built your Web site in HTML5 Responsive Web, which renders well on mobile devices and gets consumers to your Web site. But then they still have to navigate the site to look for the application to download. Create a microsite or minisite, so consumers can simply tap an NFC tag to get an experience, such as entering a contest."
—Robert P. Sabella, NFC Bootcamp and AccelerateNFC
"Keep the content fresh. People enjoy the "magic" of using NFC to get information or access experiences, but you must continually refresh the content. If you don't, the user is much less likely to re-engage with the promotion. To keep people's attention, add some dynamic content through the cloud."
—Matthew Bright, Kovio
"Understand Facebook algorithms. When you add a social-networking component to an RFID-enabled event, you want posts to appear in users' news feeds or timelines, not just on your brand page. Facebook's proprietary algorithms connect users with content relevant specifically to them. Usually, there's not enough affinity, as Facebook rates it, or not enough engagement between a brand page and user to rate brand-page content highly."
—Patrick Sweeney, dwinQ
"Create a keepsake. Design the RFID-enabled access cards you'll use at events for registration and activities with the sponsor's company logo and an image of the featured organization, such as Lexus did for the U.S. Open Golf Championship. That way, the branded card becomes a souvenir."
—Adrian Si, Lexus
"Invest in resources. Whenever you implement a technology like RFID that is tied to an infrastructure, you are getting into bed with that technology for a long time. Don't underestimate the number of people and amount of time and expense needed to maintain the system. At Vail Resorts, for example, there is a guest experience consideration to take into account if we have to replace ski passes with worn-out RFID chips."
—John Lilley, Vail Resorts