Proximity Marketing: Bluetooth vs NFC (Contactless)

The Problem with Bluetooth

Bluetooth: named after the scandinavian king who united the country, it hasn't managed to do the same for mobile

Just a few years ago, Bluetooth was predicted as being the next big thing in mobile marketing. The DMA even produced a set of Best Practice Guidelines. Bluetooth offered a number of advantages:

  • It was network independent – you didn’t need a mobile data connection
  • You could send large files, quickly to mobile handsets
  • It worked on even the most basic mobile phones
  • The units were relatively cheap to install

However, it has never reached its promised potential. There have been few examples of major brands successfully using Bluetooth, and none recently. The failure of Bluetooth seems to be down to a number of problems:

  • Users don’t understand how it works – most people have no idea how to turn on or off their Bluetooth. Those that do tend to keep it off as it uses a lot of battery power
  • It doesn’t work on a number of handsets including iPhone and BlackBerry. Given that these two models represent half of smartphone users that is discounting a lot of people
  • It isn’t very reliable – the units often fail to pick up handsets or cannot deliver content

When it comes down to it, Bluetooth was never intended as a marketing medium. It was intended to connect to other devices or for peer to peer file sharing. As such there has been little investment in the channel or the technology.

NFC, The Future of Mobile?

With rumours of contactless payments in iPhone5, 2011 may be the year of NFC

Near Field Communications, or Contactless is a contender for the next big thing in mobile. Unlike Bluetooth there has been a considerable investment in the technology by banks, mobile handset manufacturers and the mobile operators. Visa, for example has committed 400 million Euros to rolling out NFC this year. Payments and ticketing are the main driver, however the potential of NFC marketing is also a factor in its development. So far, only BlackBerry have announced a handset, but other manufacturers will follow. Rumour is that Apple will include it in the iPhone 5, assuming they can get the technology ready.

The key benefits of NFC are:

Simple to use – you just ‘touch in’ to make a payment, get your voucher or call back
The infrastructure already exists in the form of payment terminals in numerous retail outlets
Clear user permission – the action of touching in means that mobile handset users have specifically given their permission

So, it looks like NFC has a future (unlike Bluetooth). It is estimated that it will  be available in all handsets within the next 12 months. That just leaves one major hurdle, consumer adoption. Will mobile users trust it enough to actually use it?

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2 thoughts on “Proximity Marketing: Bluetooth vs NFC (Contactless)

  1. Pingback: Mobile Predictions for 2011 « The Future of Mobile and Mobile Marketing

  2. Hi Mark, Interesting article. The question posed at the very end “Will consumers actually use it” has recently been answered in a report.

    Note: this comment has been edited as it as blatant attempt to promote this research company’s work.

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