Touchatag: The Interactive Advertising Opportunity

Alcatel-Lucent (News - Alert) recently announced enhancements to its touchatag solution, an online Radio Frequency Identification (RFID) service that enables developers and Web-savvy consumers to create innovative one-touch applications which connect everyday objects with online applications.

As part of the announcement, Alcatel-Lucent unveiled a suite of five new touchatag business solutions to help businesses improve efficiencies while offering unique user experiences and services including an Interactive Advertising solution designed to enable businesses to create targeted interactive advertising at the point of sale.

One of the ways that a business or brand can leverage the innovative touchatag technology is through the creation of a “smart poster.” By adding a touchatag tag (News - Alert) to a poster advertisers create an NFC (near field communications) hotspot for users. When the user touches the tag, or comes in contact with the tag via their NFC enabled mobile phone, they can get more information via an SMS, an e-mail, or even a phone call. Enhanced information, links to Web sites, coupons, contests… simply by touching the reader to the tag, all of these things can be delivered to the consumer at the moment he/she is ready for it — interactivity where they want it, when they want it.

Just think of the possibilities. If a shopper walks by a shoe store and sees the latest Manolos in the window, she can scan the tag in the display with her NFC-enabled phone and be presented with a Web site offering full product information, pricing, user comments and ratings, and the like. If she goes into the store she can scan a tag on the shoe itself and get instant access to inventory, available colors, pricing, maybe even a discount for having scanned the product.

Or imagine walking down the aisle in a supermarket and scanning an item, and being presented with a list of recipes — and other necessary ingredients — to create that perfect meal. A consumer might also cross reference a database to ensure that the suggested food items contain no allergens.

Of course all of this information can be shared with the shopper’s self-identified brand/loyalty programs. Now an advertiser or marketer can utilize this information to provide a more targeted offering, resulting in increased sales.

touchatag takes campaign information (e.g., landing pages) and stores it in the network on an application server — not in the RFID tag. This offers the advantages of enabling context- and user-dependent action initiation; the ability to update a given campaign on-the-fly via a Web interface; also enabling full campaign reporting.

By personalizing the experience (the user controls the interaction initiation) and enhancing the end user experience by providing new levels of interactivity, advertisers will be able to drive more transactions, and more revenue.

The Opportunity

When considering the potential impact of the touchatag service it’s necessary to define several related technologies, namely RFID and NFC.

Analyst estimates that the market for RFID network, software and services will increase over a five-year period from around $1 billion in 2008 to over $6 billion in 2013 (IDTechEx). Strategy Analytics (News - Alert) projects that in 2012 around 250 million NFC phones will be sold and that in 2017 over 1 trillion RFID labels will be tagged. According to ABI Research, the RFID market is expected to generate $9.7 billion by 2013.

The research points to an ever increasing acceptance (on the part of consumers) of mobile advertising, especially if it has personalized contextual value to the consumer, and offers some measure of control and interactivity.

Furthermore, increased personalization will change how ads are created and served to make them more entertaining. Recent Alcatel-Lucent research points out that end users are more likely to accept advertising if that message is related to a favorite musical artist, sports team, or other major interest. Likewise, text-based ads and ads for specific products and services, which may contain special offers or discounts are more appealing to end users if the find themselves in a place where they can enact a purchase.

By leveraging emerging technologies such as touchatag, marketers can take advantage of new and exciting ways of reaching consumers and serve them the appropriate messages at the appropriate time and place, creating an environment conducive to closing the sale and generating more revenue. IT

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