It looks like the email was coded incorrectly. It appears a different field from Blockbuster’s customer database was inserted by mistake. It says “Netflix Counter 2out TA #14.99benefitDescription”. I’m assuming that this tells us that Blockbuster’s internal database refers to this offer as a “Netflix counter” or counteroffer. Any former Blockbuster people out there who can confirm this?

I thought this was an interesting peek behind the scenes of what is one of today’s biggest digital entertainment rivalries.

Let’s say you’re an average social media user, with 50 Facebook friends, 75 LinkedIn  contacts, membership in 5 LinkedIn groups, and you’re following 50 Twitter accounts.  These are modest numbers – many fans of social media have much higher numbers than these.  Indeed, LinkedIn lets you follow up to 50 groups.

From my experience, social network activity (how much people post) varies widely.  Some people post very frequently, some never post,  and everyone else is somewhere in the middle.  (This doesn’t even take into account the social media holdouts – people who for reasons of personal preference, security concerns or workplace requirements cannot join these networks).

The Gallup Organization has gone beyond my unscientific sampling. They surveyed over 17,000 individuals on their use of social media, and found that individuals fall into eight distinct categories, or what Gallup calls “typologies”.  A more detailed analysis is contained here,
http://gmj.gallup.com/content/149411/Making-Social-Media.aspx, but basically they found that about a third of the respondents are active in networks, with a third inactive.  Not surprisingly, the active third tends to be younger, a group which marketers are calling “Digital Natives”.  (The older group is called ‘Digital Immigrants”, implying they were exposed to a digital world later in life.)

With your 50 Facebook friends, maybe only 15-20 post regularly. What happens when your network grows, and more people start posting as the population ages?

As more and more people and companies get involved with social media, I’m finding myself overwhelmed with information overload.  The early adapters in social media have been successful in getting me to follow them, and so my content streams are quite busy.  Do-it-yourself tools have replaced many Web Masters – it’s never been easier for non-techies to post thoughts, photos, and videos, Tweet, blog and share “likes” and +1’s with a single click.

Already there’s no way for me to read every status update or post that appears in my networks.  I’d have to check my feeds three times a day, and even then might have to scroll down several pages to catch everything.  Things are getting lost in the noise.

Marketers are realizing this, and adjusting by posting more frequently.  This only adds to the congestion. 

In its early days of launching groups, LinkedIn tracked online activity and realized that most people who joined these groups don’t follow the discussions regularly.  To stay visible, LinkedIn started sending emails with daily discussion topic summaries to the members.  Even then, most people who joined multiple groups cannot keep up with the conversations, and the group hosts are now trying weekly summaries in the hopes of making these group updates more meaningful.  It may already be too late.

Salon recently had an interview with David Weinberger, author of “Too Big To Know”, where he discusses information overload, not specifically related to social media but nonetheless relevant.  http://www.salon.com/2012/01/01/are_we_on_information_overload/singleton/  The availability of more information than ever before, and failed filtering technology has put us in a crunch.  This threatens the majority of social media.

So how to overcome this gloomy scenario?  If you’re a consumer, the solution is already starting to appear through the proliferation of easier, do-it-yourself filters.  If you’re a marketer, the solution is to raise the bar and make your social media content and presence more meaningful.  These two items are related.

The social media sites that will survive data overload are the ones which give people the best control over the information they want to consume.

Twitter has a user created list feature that allows people to group their feeds into meaningful categories, so the Tweets aren’t all lost in a big random jumble.  You can read about your industry one minute, and then on a break read your sports feeds or other entertainment feeds.

Facebook, probably more because of the threat from Google+ than anything else, recently allowed users to segment their networks into family, friends and acquaintances, with the implication being that you can filter out feeds from people you aren’t as close to.  On a related note, I’ve personally noticed a great reduction in Farmville and Mafia Wars gaming updates in Facebook.  User complaints have been heard.

LinkedIn has very extensive sorting and filtering features to find contacts, particularly if you are a paying customer, but the network updates are still unfiltered.  I can keep you from seeing my updates about mundane items like profile corrections, and interest updates, but you can’t block these updates unless you unlink me.  Don’t be surprised if LinkedIn adds more filtering options at a later date. (Update 1/20/12 – thanks to Sven Johnson for pointing out that you can now indeed hide posts from people in LinkedIn without unlinking. There’s a hide button that appears next to each of your contacts’ posts when you do a mouseover. I assume this feature isn’t promoted very much because blocking content reduces the value of LinkedIn connections).

As a professional marketing consultant, one of my pet peeves is marketers who see social media as an opportunity to post every mundane bit of company information onto social media, simply to keep the funnel filled and create a sense of activity in the social networks.  This weakens the social media relationship between vendor and customer, while also diminishing the overall value of the platforms for everyone else.

As a recent example, one of the networking gear companies I follow posting a highly technical definition of an obscure technical feature found on one of their products.  No information about a cool application using the technology, nothing related to how that feature might give the company’s product an advantage, just a clinical definition that could be found by Googling in three seconds. Other scofflaws post things like “Read how our customer gave us a great testimonial today” with a link to a self congratulatory note.  Really?  If you want me to stop what I’m doing, you should at least reward me with something special.  How about a case study about a unique problem your technology solved, with the testimonial at the end?

Gallup studies have shown that social media doesn’t create brand loyalty – it only gives a forum to brand loyal customers.  If this is ever going to change, companies need to be more selective about what they post, and focus beyond serving a narrow audience with content of limited appeal.

What’s the first thing you do when you have a problem with a device?  You Google it.  Unfortunately, that is really hard when you can’t type anything.  I was stuck with a problem that had to be fixed before I could find out how to solve it.

Enter Google’s iPad app.  This handy app, which many people don’t know about, features speech to text conversion, kind of a nice way of having a little Siri before Apple releases it on the iPad 3 and charges us another $599 to use it.  I spoke into the device “My iPad keyboard stopped working”.  Lo and behold – a lot of hits came up.

It turns out that it is very hard to type on Apple’s mobile devices.  I also have an iPhone and have to constantly use the magnifying glass editing tool to fix my mistyping.  Having just switched from a Blackberry, I miss the tactile keyboard.

My mother got me a Bluetooth external keyboard for Xmas for my iPad (no – you can’t have my Mom), and I just started using it.  Little did I know that with the keyboard in the laptop bag behind my seat, it automatically associated with the iPad, blocking the keyboard.  The fix was to turn off the Bluetooth.  Problem solved.

Thanks Google!

Showing Taft colors at the OC Marathon - May 2011

Tim Templeton, founder of Templeton Interactive, caught the marathon bug in 2010, and most recently completed his third fourth marathon, the Orange County Long Beach Marathon, in May October 2011.  He shares his insights below.

1. While it’s not how you start but where you finish, it does help to start near the front.

At any marathon, the best runners all go to the front of the starting line, so they aren’t slowed down by the other runners.  The top marathons like Boston’s and NY City’s give front row priority placement to the world class runners – the ones who have the best chance of winning.  Most of us running a race aren’t expecting to come in first, and so working through the crowd at the starting gate is a minor inconvenience.  With 26.2 miles, you know you have a lot of time to distance yourself from the pack.  Indeed, by about mile 20 you’re going to be with the same people for the rest of the race, people that share your level of strength and conditioning.

So how does this apply to a marketing campaign?  In the business world, the front runners are the market leaders with the deepest pockets.  There are usually only about 2-3 companies at any time that can realistically expect to gain the title of market leader – the other companies are simply looking to increase their market share or increase profitability.  It would be nice to launch a marketing campaign as the front runner with corresponding deep pockets and associated strong brand awareness, but companies don’t let the fact that they aren’t in front discourage them from making the best of the situation.  You’re going to be competing with the other companies in your market niche, of similar size and resources, and these are the ones that you should be focusing on.

2. With both, doing the same thing over and over again and expecting a different result ISN’T the definition of insanity.

Everyone knows the famous quote, attributed (perhaps erroneously) to Albert Einstein.  “Insanity:  doing the same thing over and over again and expecting different results.”  It’s easy to see how this applies to a marathon.  You run the same race over the same track, and it’s certainly not insanity to expect that you’d improve your time.  But how does this apply to marketing campaigns?

Marketing is a lot about branding and impressions.  Billboards, TV, radio and print ads, banner ads, Google AdWords campaigns and direct mail all aim to familiarize customers with a brand.  When I was contacted by the local AM radio station about running ads for my company, the sales rep told me that if I didn’t commit to at least 30 spots a week, I wouldn’t get any benefit.  I’ve even heard one expert say that the average person hears an ad 11 times before actually LISTENING to it.

So, with marketing, as with marathons, you need to do the same thing over and over before you get the results you want.  Take that Mr. Einstein!

3. It’s always better when you can measure the results.

Most serious marathon runners keep careful logs of their training routines and race info.  They record their training distances, the weather, even their mood – before and after they run.  My race goal is pretty simple – finish faster than my previous time.  Technology helps me track this info.  Event organizers have developed timing chips that attach to shoelaces, and thanks to strategically placed readers along the course, data points are collected along the way, not just at the finish line.  When the results are combined with demographic data supplied during registration and posted after the race, runners can see how they did compared with others in their age and gender groups, and even whether they were the fastest runner in their town.  When I ran the Long Beach Marathon in 2010, the detailed data they recorded even showed how many people I passed during the last few miles!  (Happily it was more than the number of runners who passed me.)

Record keeping and measuring results are just as important when running a marketing campaign, yet many marketers don’t give enough attention to this critical step.  There are various reasons for this.  Familiar excuses include “we don’t have any way to measure the results” or “we are too busy trying to close orders to record this data.”  Compounding the challenge is the growing influence of social media marketing.  E very company is either active with social networks, or considering a strategy, but how does a company measure the value of social media activity and engagement?  What is the value of a Facebook “like”?

Luckily there are technology solutions that are every bit as elegant as the timing chip on a runner’s shoe.  Web logs are a common way to track company website activity, and there are also popular tools for tracking “mentions”, “likes”, Tweets, and other Social Media activity metrics.  Custom URLS paired with site redirects, custom PBX extensions for inbound calls, and custom QR codes are just a few of the ways marketers can create a unique identifier for leads.  With carefully planned CRM integration, it’s easier than ever for marketers to close the ROI loop.

Whether your goal is just to finish better than the last time, or aggressively trying to shatter your historical results, measuring and tracking won’t be a problem.  May your next campaign be your best one yet!

4. Praise and recognition make the whole effort more enjoyable, and can even improve performance.

Anyone who has ever run a race knows that their race day finish time is almost always better than their best training time.  Part of this is because of the primal competitive instincts that come out during races.  When pushed by others, we’re able to exceed our normal performance.  Another equally important part of this is the motivating effects of the spectators cheering the runners.  It’s always nice to get a cheer, and my favorite part of any race is high-fiving the crowd lined up near the finish line.

A well run marketing campaign can also be accompanied by cheers and praise.  Everyone likes a pat on the back.  If you’re in charge of the campaign, you usually have some sort of internal communication to alert inside sales, order entry, operations and any other constituents that they can expect an increase in activity.  If you’re on one of these teams, be aware of how important it is to offer encouragement to the marketing campaign manager(s).  The Gallup Organization has compiled 50 years of research  showing how positive reinforcement can powerfully boost productivity, satisfaction, and stability in all kinds of organizations.  Don’t be shy – do what you can to create a happy productive environment – you’ll feel good too!

5. Repetition and experience will yield better results.

Did you know that a study by Yale University of the top runners in the NY Marathon found that over a 16 year period, older runners improved their performance more quickly than younger runners?  The study, published in the August 2004 issue of the British Journal of Sports Medicine found that the average finish times of older age groups improved more than the average times for younger age groups.  The group of females showing the greatest improvement, more than 2 minutes faster each year from 1983 to 1999, was in the 50 to 59 group.  The corresponding 50 to 59 men’s group improved about 8 seconds each year.

While this shows the value of conditioning and repetition, it is also in no small part due to mental fortitude.  I remember reading in Runners World about Kenneth Feld, the owner of Ringling Brothers Circus and a fellow marathoner.  He said he started running at age 39, and when asked how much he trained, he replied “It’s all mental after the first.”

While I would never suggest to anyone that they run their 2^nd and 3^rd races without training, a big part of running is being confident that you can succeed.  Once any doubts enter your mind, you’re in trouble.  So, having done it before is the best way to keep that mental fortitude.

Marketing campaigns are no different.  Almost every campaign I’ve ever launched has benefited from those that came earlier.  I launched an email newsletter integrated with a new ColdFusion program designed to stagger email delivery times in order to prevent my company from being flagged as a spammer, and to eliminate straining our server’s capacity.  A missing word in the code caused the newsletter to go out 15 times to the first segment of recipients before we caught the error.  After eating some major humble pie and profusely apologizing, you can be sure that we didn’t make that mistake again.

This is particularly relevant with the onset of social media marketing campaigns.  Many companies are hiring social media managers based on who is most active on Facebook or LinkedIn or Twitter, not realizing that being skilled with the tool does not equate strategic thinking skills.  A lot of what goes into a successful social media marketing campaign is behind the scenes, away from view of most users of the platforms.  The person who has the most friends on Facebook, for example, may not know how to create a company page, or even how to encourage visitors to click the important “Like” button.

Creating engaging content, understanding buyer personas, tracking performance metrics and driving traffic through non-social media tools like direct mail and print ads are just a few of the tried and true techniques utilized by savvy marketing veterans.  Leverage experience and put yourself in the best position to win.

6. Your performance will be better if you’re able to compare yourself to how others are doing.

Insight #4 above, comparing marathons to marketing campaigns, stresses the importance of praise and recognition for successful races and campaigns.  The other factor leading to improved race day performance is having competitors.  Nobody ever set a world record in any race running by themselves.  We feed off the competition, getting an adrenaline rush by facing off against those who are trying to beat us.

Marketing campaigns are no different.  When planning a marketing strategy, it’s important to see what the competition is doing.  By tracking their performance, it inspires better performance all around.  With the ease of collecting information from secondary sources, it would be foolish to ignore an entire industry of campaign results.  The Greek playwright Aristophanes said “The wise learn many things from their enemies“.

The first of my six recommended steps to developing a strategic approach to social media is to study the competition.  When putting a client proposal together, it’s relatively easy to spend about an hour to see how sophisticated a company’s social media efforts are.  From simply looking on Facebook, LinkedIn and Twitter, it’s easy to see not only which tools are being used, and by whom, but also how active they are.  Remember, it’s all too common that a company will launch a social media strategy and then ignore the platform, not realizing that a good strategy is a (forgive me) marathon, not a sprint.

A San Francisco company called Klout has even developed a social media measuring tool to help companies see how influential they are as a result of their social media efforts.  Just like your racing results, you can now strive to improve your social media score.

A non-social marketing arena where the competition is furious is with Google AdWords’ bidding and organic rankings on search engines.  There are more than seven components which make up the quality score of an ad, and this quality score affects an ad’s placement just as much as how much a person bids.  It makes sense – Google won’t make any money if you bid a high amount for an ad that nobody clicks on.  Google also changes their organic ranking algorithms frequently, so it’s hard for many businesses to maintain high natural rankings without putting in some effort.  Take a look at the companies that appear above yours, when searching for the keywords you’re optimizing to attract new customers.

You’ll get better results when you’re familiar with the playing field.  I’ll conclude with a terrific quote by John W. Holt Jr., coauthor of “Celebrate Your Mistakes.  “If you’re not making mistakes, you’re not taking risks, and that means you’re not going anywhere.  The key is to make errors faster than the competition, so you have more chances to learn and win.”

7. You don’t know what you can accomplish until you try.

My inspiration for starting running was a book I stumbled across in my parents’ attic almost 30 years ago.  First published in 1968, and largely forgotten now, Aerobics was written by Dr. Kenneth Cooper, a former Air Force Colonel who is credited with introducing the term “Aerobics” into our lexicon.  The premise of the book was very simple.  He tested people on a bicycle ergometer for cardiovascular fitness, and was puzzled that the most muscular people often performed badly in long distance swimming or biking.  After extensive testing, he found that the fittest people, by far, were Nordic Cross Country skiers – trim and lean, yet full of aerobic energy.

Dr. Cooper developed a point system for running, biking and swimming certain distances within a set timeframe.  The goal was to increase point totals by covering greater distances in faster times.  To get started, he created a conditioning test for people to gauge their level of physical fitness.  Run as fast as you can for 12 minutes, and the distance you cover determines your level of fitness.  Intrigued, I put on some sneakers and ran towards town.  12 minutes later, and a mile and a half away, I was officially in good, but not great, shape.  My casual running career had begun.

I never considered myself a serious runner; indeed, until I moved to California about 15 years later, I’d only run one race, a 5K intramural event during my undergraduate years at Cornell.  A friend in Atlanta had talked me into running Atlanta’s famous Peachtree Road Race but then forgot to sign me up after I’d spent weeks training to get my time and endurance up.

In 2005 living in California, a friend talked me into running another 5K.  It felt good finishing, and just like that, I’d caught the competitive racing bug.  The next distance on my racing radar was the 10K, 6.2 miles.  That would be the longest distance I’d ever run, but I thought if I don’t do it, I never will.  A few months and a couple of 5Ks later, I completed my first 10K, in about 56 minutes.

The next level of racing is the half marathon, 13.2 miles.  It was one thing to go from 5K to 10K, but holy cow, that’s more than FOUR 5Ks!  How could I ever do that?  I dug in, started a running log and got my training up to 10 miles.  I was confident I could do it, and sure enough, I completed the Orange County half marathon in 2009.

After completing the race, I felt that I could have gone further.  I’d been tentative during the race and stopped several times for breaks, but at the end, I was passing the other runners.  Could I tackle the next level, the full marathon?  What had never seemed even a remote possibility was now within reach.

A friend that’s I’d run a few races with told me that he’d completed a marathon, and finished and collapsed at the end, exhausted but satisfied.  It turned out that simply knowing that he’d done it and I hadn’t drove me to start training.  Nervously, but eagerly.

You don’t realize how long 26.2 miles is until you start training.  I’d run from Laguna Beach to Newport Beach and back, a beautiful oceanside two hour run along Coast Highway, and that’s only 13 miles.  For five months, I worked on getting my endurance up.  I reached 20 miles, and felt I was ready.  On May 2^nd, 2010, I completed the OC marathon in 4 hours 20 minutes.  I’d reached the plateau – I was a marathoner!  Something I never thought I would do I’ve now done three times, with number four coming up in October 2011 in Long Beach.

Marketing campaigns can be very simple or very challenging.  As marketers develop their skills, they come across projects that can be overwhelming, but like with running, the first goal is to succeed with small projects and then combine them into more complex activities.  This similarity is illustrated by a marketing campaign I ran in August 2008 that was subsequently profiled by Marketing Sherpa.

I was tasked with improving channel sales of a fiber optic networking device, with a very limited marketing budget.  I developed a comprehensive campaign designed to get the most out of a onetime rental of a distributor’s customer database.  The campaign integrated list segmentation, competitive analysis, a catchy direct mail piece, informative downloadable web content, automatic lead entry into CRM, an opt-in for an email newsletter and tracking through the distributor’s point of sales reports.   Each component was something that I’d done before, just like a 5K race, so putting them together into a marathon project wasn’t so intimidating.  The project, like my marathons, was a success.

Tennis great Arthur Ashe once said “One important key to success is self-confidence. An important key to self-confidence is preparation.”

Don’t be afraid to try, and enjoy the great feeling when you succeed!

8. Planning your strategy carefully with tracking milestones will help you get the results you need

Runners have it pretty easy when it comes to the end result.  There’s only one result, completing a race, and one parameter to measure, time of completion.  It’s how the runners get to that point that requires developing a plan and an execution strategy.  For example, a runner trying to beat a certain time will set a goal for reaching the different mile markers.  A runner aiming to finish under four hours would want to make sure they were at least at mile 13 in under 2 hours.  A runner also needs to be familiar with their own running style and skill level, in order to maintain the right pace over time.  Other considerations include when to make time for periodic rest to allow legs to recover, and planning for water and energy breaks.  Any good runner knows to keep hydrated; if you’re thirsty, it’s too late!

Marketing campaigns are more complicated to measure than race performance, since the critical metrics include sales and leads generated by the campaign.  Companies are even measuring a new metric which popped up thanks to social media: the reduced cost of support.  But, both marketing and running are similar when it comes to the difficulty in developing milestones.  This is where experience comes in handy.  A company running a new campaign may not have any success reference points, any “mile markers” to gauge how well they are doing early in the campaign.  A good example, as mentioned in #2 above, is how experienced marketers know not to expect immediate results from certain kinds of radio, direct mail or billboard campaigns until the level of impressions have, well, made an impression.  Once a marketer has executed a campaign and is ready to launch it again, he or she will know what to expect, and whether they need to increase spending or not to get the desired results.

Another example of marketing milestones comes with Google AdWords.  Most companies develop AdWords campaigns without knowing what to expect.  They write their ads, develop landing pages, bid for their favorite keywords, set a daily budget, and sit back and wait for sales.  A larger sample size is needed to account for fluctuations from seasonality, time of day, and day of week.  With experience and good data points, company can do A/B testing with different ads and different landing pages, to optimize their results.  Daily budgets can be increased to fine tune results.  Luckily, there are tools to simplify management of paid search campaigns.  SEMRush and SpyFu both help companies track their keyword performance, and even help businesses see what their competition is doing.

Plan your milestones carefully and keep striving for greater success.  I’ll wrap this up with a quote from the great Yogi Berra “If you don’t know where you are going, you might wind up someplace else.”

The advent of 8” and 5 ¼” floppy disks suddenly made it easier to copy software, so Independent Software Vendors (ISVs) were forced to adjust their business models. Some vendors simply printed a program activation code on the disk, but this didn’t prevent multiple users from installing the software. Early protection schemes were developed to write programs onto disks in a unique way that was harder to copy. Other programs might ship code that prevented the programs from being installed more than once, but these rudimentary protection schemes proved relatively easy to circumvent.

Later on, software vendors developed systems to bind software to a specific machine, through the use of a unique identifier on the machine. This was called device or “node” locking, and the process remains common today. This system was unfortunately often inconvenient to customers, because the program would stop working if customers changed the underlying locked hardware. Customers also couldn’t easily transfer the software to a different machine.

A more flexible licensing method was developed that required the use of a hardware USB dongle, which contained licensing information and had to be plugged into the user’s computer and detected by the software before it would operate. This solved the issue of portability, since users could transfer the software from one machine to another, and operate one copy at a time with the dongle. With built-in advanced cryptography, hardware dongles remain one of the best copy protection methods for ISVs today.

As computers became more and more networked, ISVs developed license delivery systems that were installed on servers, rather than having individual licenses tied to a specific machine. ISVs could choose between concurrent or named license models, or a combination of both. Concurrent licenses set a limit on the maximum simultaneous users than could be connected to the server at any time. This enabled companies to purchase fewer licenses than they had users, but often at a slightly higher cost per license. Named licenses were tied to a specific user, but often had the additional benefit of allowing multiple sessions per user, in case they needed to be logged in at different places or if they needed to open multiple windows on a PC or workstation.

As electronic communications sprang into use, license keys could be distributed electronically, but unfortunately, so could illegally copied software. As more and more people started to use the Internet, some vendors started online activation. Licensing issues were similar to those of store-bought versions. An activation key was usually included in some sort of welcome email, and a central activation server would attempt to validate the key upon installation.

Online activation gave ISVs another weapon against piracy – the ability to have the software communicate with a central server to periodically check up on users, to ensure that the version of the software was legitimate. Microsoft uses this approach with their Windows Genuine Advantage system.

Migrating traditional software applications and overall business models to a SaaS platform can be appealing to Independent Software Vendors (ISVs) and their customers, but there are also major challenges that need to be addressed – it can be a massive undertaking. In reality, the SaaS model may not be right for every type of application or ISV. Developers who decide not to make the transition must still understand SaaS’ appeal to end users, in order to maintain customer satisfaction and minimize churn.

What’s the downside?  We’ll, beyond the integration coding effort to make the blog match the look and feel of the rest of the site, we’re losing the automatic update feature on our personal LinkedIn pages.  LinkedIn allows you to add Wordpress.com blogs as plugins to profile pages.

Another downside is that the content is not as searchable as it would be on a public site.  Instead of competing with just other Wordpress bloggers, we’re now competing with the entire World Wide Web for your attention.  But since you’re reading this, you found us already so that’s not an issue!

Lots of Tweets today about Google’s new Near Field Communications (NFC) Wallet announcement. Here’s the CNN report http://bit.ly/k9MtPv

For the uninitiated, NFC is a wireless contactless technology similar to Bluetooth. You just wave your phone near the reader to process a transaction. You need to be near an NFC reader and have a corresponding chip in your mobile device for this to work. This lends itself nicely to store and public transportation transactions, for example.

The first question is whether this will replace credit cards. I don’t see that happening until PC makers start installing NFC chips in desktop computers. How else are you going to shop electronically? I suppose you could have a Google wallet online that you can use to make payments. Didn’t Microsoft try this philosophy with the Net process where you could log into multiple sites with one set of credentials? Add payment processing and there’s your answer.

It turns out that there are reports that the new Windows 7 phone will also have an NFC chip in it. The technology is starting to reach a critical mass.

One of my LinkedIn groups has been debating whether this will replace QR codes, those funky 2D codes that have started popping up in ads. Imagine if you will that you click on a QR code with your phone and type a password and you can make a payment. You could click on ads in magazines or even billboards, and you don’t need to have new hardware, and you don’t need to be close to the billboard. It seems to me that the same backend needed for NFC to work could also make a QR code payment system feasible. For a lot less money.

The big hold up is who is going to clear the payments? Wireless carriers who will see higher rates of delinquent payments if the monthly bills get too large? The same carriers who also are not willing to float credit? It seems that they will have to partner with credit card companies to make this work.

Stay tuned!

This article does a good job explaining the current state of mobile payments with regards to the major wireless carriers. One other concern that’s not specifically addressed is that the carriers didn’t want to shoulder the risk from payment fraud.

http://www.computerworld.com/s/article/9216407/Isis_wireless_carriers_back_off_separate_mobile_payment_network

Will NFC (Near Field Communications) get traction for anything but speedy local transactions like paying for public transportation? We seem to be lagging the rest of the world in this respect.

The gift card industry is going through dramatic changes due to the widespread growth of smart phones.  These devices have become the hubs of many people’s business worlds, upending the business models of companies selling day planners, rolodexes and other legacy information storage tools.  As familiarity with eCommerce and mobile payments platforms continues to grow amongst an increasingly tech-savvy population, it’s only logical that developers would start to focus on ways of replacing traditional gift cards with mobile payment options.

Retailers love to sell gift cards.  Although they cannot recognize revenue until the card is used or otherwise expires, the sale creates a captive audience.  In other words, unlike a gift of cash, which can be used however the recipient chooses, a company gift card is what is known as a “closed” system, and can only be used for that company’s products.  Also, a gift card feels less impersonal than a cash gift, allowing the recipient to choose what they’d like, but reassuring the buyer that there was at least some personal touch made on their choice of gift.  Gift cards also often have expiration dates, and any unredeemed value goes back to the merchant.

A mobile gift card is a gift card that is purchased online and then is sent electronically either to a recipient’s email address, or via SMS text to the recipient’s phone number.  Some forms of gift cards are delivered as bar codes which can be redeemed by holding ones phone up to a scanner at the point of purchase.   This technology is similar to what the airlines are adapting for mobile check-ins with electronic boarding passes.  A numeric code is usually also delivered in case the cashier has to make a manual entry, if they don’t have the correct POS technology.  The recipient simply enters the code into the coupon section to make an online purchase.

There are pros and cons of giving mobile gift cards.  Some pros: unlike a physical card, fulfillment costs are very low, and delivery is very fast.  The business doesn’t need to produce and send a physical product – only an email or text message with an identifying code.  The obvious advantage here for the consumer is that last minute gifts will arrive on time, with pinpoint delivery to the minute, if necessary.  The main downside to mobile gift giving is its impersonal nature – the lack of a tangible item which would normally be included in an envelope and physically delivered to the recipient.  There’s a fear by merchants that there will be less of an emotional attachment to a “virtual” gift.  However, it seems that this fear will diminish as the younger more smart phone-centric generation gets older.

One terrific added benefit of mobile gift cards is the market intelligence it provides to businesses.  When a customer buys a traditional gift card and pays cash, the merchant learns very little info about the buyer.  On the other hand, when a customer logs into a web site and creates an account to buy a gift card, their address and other profile info is usually recorded.  When the buyer subsequently sends the mobile gift card, either via email or through SMS, the merchant gets to see both ends of the transaction.  Buying patterns can be tracked – frequent buyers can be offered incentives and other loyalty rewards, and recipients can be sent offers to encourage them to redeem their gift card.  This is very valuable info, and it’s hard to duplicate this with traditional gift cards, even with sophisticated bar code tracking systems.

Amazon is probably the largest online gift card merchant in the world.  In January 2011, LivingSocial sold 1.3 Million Amazon gift cards in a wildly successful promotion.  An Amazon gift code is redeemed online, and the balance is applied to a person’s account.  Amazon gift cards lend themselves well to online promotions such as invitations to fill out surveys.  Participants can be told they’ll get a code in some mystery amount, and they have to go to the Amazon web site to find out how much the value is.  This suggests an additional market niche for mobile gift card companies.

A leader in mobile gift card services is San Diego-based Transaction Wireless, with a diverse group of customers including AMC Theatres, Applebee’s and Travelocity.  Transaction Wireless offers a full range of mobile gifting solutions, from B2C mobile cards, B2B channel solutions for resellers who want to host their own programs, and a range of marketing intelligence tools to help customers track program success.  Business appears to be booming.  The company reports in a recent web site press release that their clients have reported sales jumps of 300 to 500 percent for the recent Valentine’s Day gift giving period.

Generator Research predicts strong growth for the mobile gift card industry, expecting over 490 million customers to use mobile payments by 2014, resulting in a $633 billion annual market growth.  Mercator Advisory Group, described on their web site as “the leading independent research and advisory services firm exclusively focused on the payments and banking industries globally,” suggests that digital gift cards are poised for success.  In a March 2011 report entitled “The Future of Prepaid Cards is Not Plastics,” Mercator cites a survey by RSR Research stating that only about half of the top 100 Internet retailers use mobile gift cards.  The report also mentions that only a third of the Top 100 brick and mortar retailers offer digital gift cards, so there’s obviously room to grow.

Mercator lists Transaction Wireless and their competitors Dimpledough, GIftango and CashStar as the four major providers of gift card services.  From a quick reading of the web sites, all four companies understand that a successful mobile gift card marketing program is as much about measurement as it is about technology.  Features the companies promote include the ability to track whether the recipient opened the mobile gift card, whether the card balance was redeemed, and even support for familiar marketing techniques such as A/B testing.  Clients can try different designs to identify which ones have the best response rates.  Doing something like that in the real brick and mortar world would be much more expensive.  Some of the companies even offer links to their clients’ card purchase storefront, as an added benefit of partnership.

As the mobile revolution continues, few traditional industries will be unaffected.  Businesses are going to have to adapt their sales and marketing practices to succeed.  The mobile gift card industry is at the forefront of embracing technological changes and helping their customers leverage technology for maximum profitability.