Should you use near field communications in your next direct mail campaign?

1. NFC in Direct MailShould you use near field communications
in your next campaign?
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2. Intro
Near field communications, or NFC, is a buzz word that has gained popularity over the
past few years, especially in the retail space. NFC helps to connect the physical and
virtual worlds through short-range wireless communication technology. Although this
technology has been around since the 1980s, it took the rise of smartphones and
mobile payments to launch NFC to today's status of "the next big thing.” However,
roadblocks, such as the late addition of NFC to Apple devices, slowed its adoption in
the marketplace. But now that businesses are beginning to embrace the technology,
marketers are finding clever ways to use the technology across many platforms,
including direct mail.
In this document we’ll explore the pros and cons of using NFC in direct mail to
determine if it is right for your next direct mail campaign.

3. About NFC
NFC is a wireless communication
technology in which two NFC
devices communicate with one
another using radio frequencies to
exchange information. Many
smartphones manufactured today
include an NFC chip that can be
used with either another NFC
enabled device or an NFC tag. An
NFC tag can be a sticker or small
item, like a key fob, that is
embedded with a chip and
antenna. There are two NFC
modes, active and passive.
Active
Passive
Both devices generate a radio frequency field and
exchange data. This mode is also called
Peer-to-Peer (P2P) and an example is two phones
tapping and sharing information. Unlike Bluetooth,
there is no pairing required.
The passive mode includes one active device
(generating an RF field) and one passive device,
which uses that field to exchange information. There
is no power source in the passive device, but
operates off of the field the active device is emitting.
And example of this is a smartphone and an NFC tag
or smartposter (with an embedded NFC tag).
Direct mail utilizes the passive mode since the recipient would use their smartphone
(active device) with an NFC tag (passive device), that can be either embedded within the
paper or used as a sticker.

4. About NFCAlong with the different modes, there are also several types of NFC tags (Type 1,2,3,4) and each has its own distinct capacities
and capabilities. Memory load and read & write capabilities differentiate each tag type, therefore, the direct marketer must
understand the differences and how they will be used prior to launching an NFC direct mail campaign. Unlike QR codes, NFC tags
can be re-writeable.
Type 1 Type 2 Type 3 Type 4
Read & write
capabilities
Can be configured
read-only
96 bits of memory
Read & write
capabilities
Can be
configured
read-only
96 bits of
memory
Configured at
manufacturer to be
read and
re-writeable or
read-only
1 MB of memory
More expensive than
type 1 & 2
Configured at
manufacturer to be
read and
re-writeable or
read-only
32K of memory

5. A Short History of NFC
1983 2004 2006 2010 2012 2015
The first patent on
RFID technology
(NFC derives from
radio frequency
technology)
Nokia, Sony &
Philips created the
NFC Forum - an
association
dedicated to the
promotion of NFC
First set of
specifications for
NFC tags
established by NFC
Forum
The Nokia 6131 is
the first NFC-
enabled phone
NFC grows from a
payments solution
to sharing content
Samsung Nexus S
becomes first
NFC-enabled
Android phone
Sony and Samsung
each develop
programmable NFC
tag products
Apple adds NFC to
iPhone 6 & 6 Plus,
but is limited to use
with Apple Pay

6. Other NFC Uses
content transfer
mobile payments
transportation
home automationretail beacons
smart posters
outside of direct mail

7. of using NFC in direct mail
It's contactless. It's versatile. It's personal.
It's trackable.
It's "tap-n-go" technology helps
turn your direct mail into an
interactive piece with just a tap.
No app or software required.
Tapping is easier than scanning.
With NFC you can create very
personalized experiences for
your recipients, providing them
with relevant and targeted
content.
When you add campaign tags to
the NFC links, you can easily
track your mobile conversions.
NFC can be used across an entire
marketing program. For example,
a retailer can use NFC to drive
customers into their brick & mortar
through a direct mail piece, track
them upon entering the store, and
use tags on products to provide
information or coupons, which can
help boost sales.
Beyond direct mail, NFC can be
used in a variety of ways,
including home automation,
access control, inventory control,
and more!
It's savvy.
Want to look like you're on the
cutting edge of technology?
NFC helps companies and
brands appear to be tech-savvy.
The Pros

8. of using NFC in direct mail
It's costly.
It's secure.
It's new. And what
about ROI?
It's limited.
Embedding NFC into direct mail can be
costly, plus if you need to adhere the tag
to the printed piece, that also comes with
a price. It will take some time for pricing
to come down to an affordable level.
Being secure is not usually a bad thing,
however, some phones will have security
features that require the NFC to be
turned on before being able to use. This
will add another step to the process,
making it similar to a QR code, which
typically requires one to open an app.
As with any new(er) technology,
there is a learning curve. Marketers
will need to become educated on
the different types of tags and how
to use them.
Although it is easier to track
ROI with NFC, is it going to
improve your ROI?
The additional cost of the
technology coupled with
the absence of NFC in all
phones may leave you with
a less than stellar ROI
initially.
This is a new marketing
tactic that hasn't been
tested enough to ensure
success.
Only 39% of phones are enabled with
NFC. Plus, the newest iPhones are
limited to using NFC with Apple Pay only.
Therefore, a large chunk of your
audience will not be able to interact with
your mail piece until more phones
become enabled.
The Cons

9. What About QR Codes?
When considering NFC for direct mail, it would be prudent to compare it to QR codes before jumping in. After all, QR codes will
provide a similar experience and have been used for a number of years with good results. Here's what to consider:
QR codes are cost effective. Compared to the technology used in NFC, QR codes don't require special paper or a tag that
needs to be attached to the direct mail piece. QR codes are simply printed, and there are many websites that will generate a
QR code for free or at a very low cost.
QR codes are not new, which means they have been tested and people understand
how to use them already. They have been widely adopted for many applications,
including direct mail. Plus, you can personalize them with your brand's colors or logo.
Unlike NFC, QR codes don't require an NFC enabled device. Older smartphones are not NFC-enabled and the newest
iPhones' NFC chip can only be used for Apple Pay. Virtually any smartphone with a camera can scan a QR code, as long as
the phone has a QR code scanner built-in or an app. There are many free QR code apps on the market and since QR codes
have been used in many applications, it is very likely that most people already have an app on their phone.
QR codes have similar capabilities of NFC, but without the additional cost or learning curve.
Yes, you must open up an app to use, however, many NFC enabled smart phones will be
equipped with security features to prevent eavesdropping technology. Therefore, users will still
need to "turn on" the NFC before using, so the same number of steps is required.

10. In Conclusion
Although NFC has the potential to change the way we receive and share information, it is still very new for
direct mail purposes. Currently, cost is a limiting factor since there are not many companies that mass
produce NFC tags for direct mail use. Plus, the number of NFC-enabled smartphones is relatively low,
which limits your audience. In time, as pricing stabilizes and more phones are manufactured with the NFC
chip, NFC may very well be a direct marketer's most powerful tool. Until then, the QR code is still an
effective and efficient alternative that has proven to be successful for several years.
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