Emerging Platforms Opinions

Google wallet is more than just payments

Posted by Justin Loresco on May 29th, 2011 at 2:15 pm

The mobile movement is in full swing.  You know it, I know it, and Google knows it.  I'll revisit later and explain why the latter has tremendous implications to the future of mobile, but let's take a moment to see just how far we’ve come.  Recent Gartner research reveals that over 428 Million mobile communication devices were sold worldwide in Q1 alone.  Gartner also reveals total spend on mobile advertising will reach $3.3 Billion in 2011, and grow to over $20.6 Billion by 2015.  So yeah, the topic of mobile is pretty hot right now.


Which brings me to Google, and why their recent announcement to take the mobile payment industry by storm has greater implications than just payments.  Using near field communication technology (NFC), Google plans to integrate and enable all devices running the Android OS to be capable of transmitting payments and obtaining loyalty coupon information.  Sounds cool right?  Sure.  But in reality, the tech to do this has been out for years.  NFC technology is already prevalent across many Asian, European, and South American countries.  So why is this big news, and why did it take so long to introduce NFC to North American markets?  To answer that, let’s take a brief look at how NFC caught fire in Japan.

If we look at how NFC technology seamlessly manifested itself into Japanese mainstream, besides being a very cash oriented society where quick payments make sense given their dense urban populations, it was predominantly because telecom powerhouse NTT DoCoMo (who controls over half of Japan’s cellular market) pushed other industries to adopt NFC technology.  They essentially orchestrated the NFC introduction to market from the top down.   This is exactly what Google is doing.

Gartner reports that Google captured over 36% of smartphone market share in Q1 (globally).  Given the abundance of manufacturers already running the Android OS, there is going to be a huge wave of Google enabled NFC devices with the ability to not only receive and transmit mobile payments, but also the ability to receive highly engaging and relevant location based advertisements at a point of touch.  Are you catching my drift?

As this pertains to the digerati, the ability to receive coupons, advertisements, and engaging marketing messages to even just users on the Android OS is going to change the game.  Perhaps not today, tomorrow, or even the next 2 years, but as the adoption of NFC becomes the norm in a rapidly maturing and tech savvy consumer market, this will be the catalyst that forces advertisers to begin rethinking their overall marketing strategies.

For example, mobile advertising networks championing solutions surrounding the ability to engage audiences at the hyper-local level will need to begin thinking about how they will compete with a technology that will allow advertisers to not only serve ads at strategically placed physical locations, but now also allow them to measure conversions through a point of sale.  That is ROI to a T.

As we look to the future and head into the golden age of mobile, it will be exciting to see how advertisers respond to this technological development.  It will also be interesting to see what leaps advertisers will make using NFC technology as the conduit to connecting the physical world to the digital realm.

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