Does NFC Marketing Miss Apple ?

NFC Marketing is on hold. That's the general opinion of most industry watchers. Let's consider whether the argument is justified.

NFC Marketing Campaigns

It's often been said that the real benefit of running and NFC marketing campaign at the moment is more from getting the PR associated with running it rather than the direct benefit.

Some of the earlier integrated campaigns such BMW's magazine advertising were really nothing more than a gimmick. The 'novelty' effect being the main purpose.

There's a couple of reasons for this. Firstly, the consumers awareness of NFC outside payments (and arguably even within payments) is almost not existent. There just haven't been that many campaigns. The campaigns that have run haven't been consistent with branding or instruction. In Europe, aside from a few bus stops, there's just not enough going on to raise awareness.

Clearly, this is chicken and the egg. You can't raise awareness without running campaigns but you can't run campaigns because there's no awareness. And which advertiser is going to spend money unless there's results either directly from the response or via the associated PR.

The second reason is that many of the campaigns that have run aren't suitable. Let's be honest - are you going to stand at a bus stop waving your phone in front of a billboard ? NFC isn't going to work like that and when advertisers don't get a response, they write off the whole medium.

The Apple Effect

And then there's the Apple effect. This is how it works. An NFC marketing company, outdoor ad network or similar walks into an ad agency. They make a presentation that NFC is this great technology that can connect a physical space or object seamlessly to the internet. An Android phone is used to do a demonstration and all the ad agency people are amazed. It's magic.

Then they want to have a go themselves, get out their brand new iPhones to test and suddenly discover the problem.

The problem here is not so much that NFC doesn't work with the iPhone. The problem is that you have to explain to iPhone users that NFC isn't going to work. NFC is designed to create a positive brand awareness and if the user is standing (or sitting) there waving their phone and there isn't a response, you get a negative brand experience. The net effect is worse than doing the campaign at all. The option of explaining who can and who can't use the NFC experience would take more ad space than any creative director is going to accept and who'd pay attention to it anyway ?

So the ad agency consider that up to 40% of their US market and say 20-30% of their European market can't scan or will get a negative experience and that's the end of that. Or is it ?

Market Segmentation

Back in 1984, Apple was the brand that you bought into if you wanted to stand up against the corporate monster. Around that time, that was IBM and Microsoft. Now, of course, Apple would like you to think it's Google.

But that's not really the case - particularly with mobile phones. Apple is no longer the edgy brand, the outsider trying to fight against the industry standard. A large part of this is reflected in the price of the product which has moved from aspirational to simply expensive.

Within the all important Millennials age group (18-35), split on Android vs. iPhone usage is roughly 50/50. However, within certain defined market segments, Android is becoming the OS of choice (albeit by default). For example, data from CivicScience reported on Forbes suggests a substantial 50% uplift in Android usage among techies. It also defines a lift for Android within drinkers, which would certainly play into the hands of Malibu's recent NFC campaign !

The Reality

Ultimately, the reality at the moment is that reaching those defined sectors where Android (or Samsung) is the preferred choice isn't easy. The likelihood is that in the next year or so we aren't going to see any significant  NFC advertising campaigns. We would also argue that unless the segmentation between Android and iPhone users becomes more defined, that NFC marketing is going to remain a highly niche option.