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NFC and Your Mobile Phone, Doesn’t Simply Mean “Payments”.

If you are involved with technology, content creation, marketing or advertising, you have probably heard of “Near Field Communication”. Actually, if you watch the news or listen to NPR, you have probably seen, or heard about it because of Google’s “Google Wallet” which is now being tested in select U.S. cities.  NFC has been around for sometime, and handset manufacturers like Nokia have actually been embedding the technology in their handsets since mid 2006, although you wouldn’t have found any of those phones on sale in the U.S. outside of an importer. So why is NFC so hot right now? Because there are tens of billions of dollars in mobile payment revenues riding on it. And now with handset manufacturers, teleco’s, payment companies, marketers, advertisers, and other key players on the same page, the doors have opened and NFC-enabled phones are starting to show up in the U.S.A.

The first big announcement started at the end of last year when Google and Samsung dropped the news about the Nexus-S. Now other manufacturers like Nokia, HTC, Motorola, and Blackberry have all chimed in with commitments to release NFC enabled phones in the next year. Even Apple is hinting that NFC might be included in the next generation iPhone. If you look at the numbers and the surrounding research it suggests that 30% of all mobile phones shipped worldwide will be NFC-enabled by 2015, which seems like a fairly conservative prediction since by the end of 2011 more than half of all phones sold will be smartphones. So what does this mean to all of us, both consumer, and content creator/advertiser? Quite a bit.

Right now when you hear “NFC” it is usually associated with mobile payments, and this is really where people are pushing the technology.The ability to pay for things with your mobile phone and potentially replace credit cards is arguably the most powerful and transformational aspect of the technology,but it is not NFC’s only use. Right now mobile marketing is the fasts growing segment of the advertising industry.NFC has the potential to create newer, richer ways of connecting target audiences with a brand, and this is very appealing to agencies, marketing firms, their clients and you the consumer. Imagine being at your favorite store, and seeing an NFC enabled sign for a new product. By simply tapping your phone in a designated area of the sign, you are taken to a micro-site for the product, or you are given specific details, or you can see the product in a 360 degree view.This is where things get interesting and revolutionary. Mobile users don’t have to install an application, and hope it works since NFC is embedded in the phone itself. Is this the death of things like QR codes? Not immediately, but eventually.

In a recent article for Mobile Market Watch by Mikhail Damiani, he talks about how RMG Networks, a place-based media network with hundreds of thousands of digital screens across cafes, health clubs, airports, airplanes, pharmacies, and casinos announced the launch of mTAG, an NFC-enabled platform allowing users to tap their phone to discover relevant mobile content associated with the on-screen creative at their current location. This is huge. It’s like Yelp, or Foursquare on steroids. Google is also jumping on the trend by rolling out NFC enabled Recommended on Google Places window stickers in a test they are conducting in Portland Oregon. Those Google stickers, communicate localized information about the venue you are at. Rich detailed information designed to extend the overall user experience.

As for you the consumer, NFC marketing has some advantages over current mobile application based marketing. Like I said before you don’t have to download and install anything on your phone, you don’t have to enable GPS, and NFC doesn’t collect personally identifiable information about you. In addition, after you leave the NFC enabled area, you won’t have any form of advertising pushed to you on your phone. Because NFC has such a low power draw, it can remain on all the time in the background, with no noticeable impact on battery life. And all interactions are fully opt-in and secure – the only way you will receive anything, is if you proactively tap your mobile phone on the designated area. Because of all of this, marketers and advertisers will have the ability to micro-target specific locations and the audience in those locations who are most interested in the offer – thus, any such engagements are more relevant and valuable. Over the next couple of years as NFC handsets become more common, NFC based campaigns will evolve in both their creativeness, and usefulness. Instead of simple messaging, the advertisements will provide you with immediate offers, relevant information, special deals, and a rich deep user experience.

Right now there is a short window of opportunity for advertisers. The ramp up and acceptance for mobile payments is going to take some time, which gives us about 12 to 18 months to play. Hopefully your first introduction to NFC will not be a mobile payment, but instead will be a rich media experience delivered to the palm of your hand.

This type of introduction to NFC is going to be essential to the success and sustainability of NFC’s use as a marketing/advertising tool.  Americans really are creatures of habit, and if their only connotation of NFC is paying for things, it’s going to be difficult to convince them that tapping their phone for entertainment content will be as valuable if not more so won’t result in a payment transaction. In addition the content is going to have to be easy to engage, and provide value to the person opting in, especially if they want continued or return engagement in the future.

I think the next 18 months is going to be extremely interesting for the NFC world, and I expect to see a lot more engagement with it as we move forward.

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“Foursquare”, the Location-Based Social-Network Game for 2010

Twitter was undoubtedly been 2009’s media darling and Facebook is continuing on its path to global domination adding tens of thousands of users daily world-wide. With all the buzz about the growth of social networking, you may wonder which social-media service will become 2010’s technology poster boy.

If you speak to any of the Web’s early adopter set, the answer is an almost unanimous: Foursquare.

While the internet and social media landscape is continuously changing, I think it’s fair to say that Foursquare already has aligned itself to become this year’s mainstream social media hit.

Foursquare and Twitter

Foursquare is the brain child of the team that brought us the mobile social network Dodgeball, which was acquired by Google in 2005 and later shut down. Dodgeball was a location-based mobile startup served a simple purpose: It lets an individual share his or her location with a group of friends.

Foursquare ventures beyond simple utility. It’s a virtual game in which participants earn badges for checking in at various locations; those that check in most become a locations “mayor.” Everyone you talk to says that Foursquare, is as addictive as Twitter, Facebook or checking your e-mail on a mobile hand set.

Originally launched as an iPhone application Foursquare was seeded by the young early adopter set in larger metropolitan cities like New York and San Francisco, L.A. and Chicago. Because of this the site’s developers were able to leap from a ready-made springboard. Allowing users to post to Twitter and Facebook.

With users’ “check-ins” being posted to the messaging service, Foursquare has been able to gain a foothold in much the same way YouTube was able to build a gigantic lead from videos embedded in sites like MySpace.

The parallels with Twitter are numerous. As tech writer Robert Scoble wrote in September: “If you go back three years, Twitter was being used by the same crowd that is playing with Foursquare today.”

Similarities to Twitter don’t stop there: Twitter first took hold at Austin’s South By Southwest festival in 2009, and has slowly gained momentum thanks to viral marketing produced by members and the Foursquare team.

Foursquare and Twitter also share investors. Union Square Ventures is a backer, while Twitter inventor Jack Dorsey has made an angel investment in Foursquare. Other notable investors in Foursquare include the founders of Digg and Delicious. According to Fred Wilson of Union Square Ventures’ Foursquare’s first round financing was “among the most competitive early round financings I’ve seen in a long time.”

Foursquare’s big move for both developers and, retailers

This week Foursquare debuted the singular piece that launched Twitter into the super stardom. They released an API. This application programming interface allows third-party developers to build anything they want on top of Foursquare’s location-based social network. This is a huge step.

time and again it has been shown once these ecosystems gain momentum, any potential competitor faces an arduous task of unseating the top dog. From Flickr to Google Maps to Twitter, it’s clear that early critical mass  (having enough users and services to make you invaluable) sets you up for total victory. It all goes back to the early laws of the internet. First one with a good product wins. Why?, because getting people to switch from one service to another is almost impossible. With Foursquare’s API launch it is set to capitalize on this advantage before others can make a play.

Foursquare is doing more than wooing users and developers though. Foursquare like Yelp, and Urban Spoon is courting local bars and restaurants. “Foursquare for Businesses” is a platform designed for retailers that are wishing to offer special deals specifically to Foursquare users. A great example is frozen desert maker Tasti D-Lite, Foursquare users are eligible for a discount. This kind of captive marketing scheme not only benefits Foursquare, but businesses like it because it helps them build brand relevance with in an emerging market.

Competition

Multiple players are vying for the location-based services market and the people who are using them. Services like Loopt, Brightkite, Gowalla and Google’s Latitude, are proof that Foursquare will by no means have an easy ride. Even though Gowalla debuted an early version at SXSW 2009 alongside Foursquare, both Loopt and Brightkite have a head start launching products almost a full 18 months ahead of Foursquare.

The one thing that all of these other services lack, is the highly addictive game play that seems to have Foursquare users hooked.

Google is undoubtedly the 800-pound gorilla in this scenario, but the numbers-driven search engine has proven time and again that it really doesn’t grasp social-networking dynamics. Look at things like Orkut and Friend Connect, Google’s Facebook Connect competitor, and you’ll see what I mean. Look at Google’s failure to turn Google Video into a YouTube competitor. What was the Solution? Google bought YouTube. Lets hope that doesn’t happen to Foursquare any time soon.

One company that could actually end Foursquare in its development stage is Twitter itself. The service that helped propel Foursquare to prominence is currently building its location-based features. And Twitter’s location-based API is one that directly challenges Foursquare. The key for Twitter is that it already has the critical mass of users and an established base of developers. If Twitter executes their location-based service correctly, it could leave Foursquare in the dust.

One good thing for Foursquare though, the overlap in investors means the Twitter-Foursquare relationship is unlikely to go bad. Foursquare may network its way to the top in the course of the next year, or it could find itself lost in an increasingly dense competitive landscape. I’m betting on the former.

Foursquare is available for iPhone, Android, and Palm’s Web OS with direct applications, and it functions on Blackberry and Windows mobile via the Foursquare Mobile site.