advertising – Enavigo

Why the Google Nexus Q is so brilliant for Google

Amid the excitement and announcements made at Google’s I/O conference, Google announced a TV-connected device called the Nexus Q. The Nexus Q is similar to devices like the Apple TV and Google’s on Google TV sets in its ability to stream video and music from providers like Netflix and YouTube. Where it stands out aside from its round shape is in the fact that Google chose to include an NFC chip in the device.

NFC, short for Near Field Communications, is a technology standard and communications protocol. It specifies and enables devices to communicate without any configuration to exchange small bits of data. To communicate devices need to be near each other, normally to the point of touching or tapping. The main uses devised for NFC include things like train and bus tickets, payment systems (Visa PayWave, Google Wallet), billboards that send you to websites for additional content (Samsung), and even devices that talk to each other to spare you the configuration.

Google is a big believer in NFC and made it simple for device makers and software developers to build smartphones and applications that use its Android operating system. Google’s first NFC initiative had to do with payment – which is where most of the attention around NFC resides. Its Google Wallet service lets you pay with a credit card (presently just a Citibank credit card) by tapping NFC-enabled payment devices. But the Nexus Q brings into the fore something that is closer to Google’s bread and butter – advertising.

If you were unaware of this, Google is primarily an advertising company. The search engine lets Google make billions of dollars selling ads and placement to companies who want to be found when you search for products and services. While search makes Google huge amounts of money, the company always sought to expand on that base. Google’s forays into newspaper and radio advertising failed, yet its television advertising offering is still around.

With smartphones in every home and nearly every pocket, advertisers are looking for ways to activate consumers beyond showing them the television commercial. Commercials are meant to get you off the couch and into the store, online or the phone to buy the stuff brands are pushing. TV commercials are expensive but in most cases it works. Problem is that so far it was difficult to build a bridge between the television and the smartphone (or tablet).

Some attempted to use QR codes, square barcodes app can read using the smartphone camera, in television commercials. This was cumbersome as you had to make sure the TV viewer was ready, had an app that could read the barcode and you had to show the barcode for several seconds. All in tall that’s a lot of work.

Another angle is to use Shazam. Shazam is a popular smartphone app that identifies the artist and song by ‘listening’ to a short bit of music. Shazam is currently used to identify commercials using their soundtrack. The advertiser flashes the Shazam logo on the corner of the screen and hopes that you can get the app ready in time, that the room is not too noisy and that the audio is playing loud enough. It is also assumed that the app is installed on your phone and that you actually identify the icon on the screen. Again, quite a list of assumptions and a tall order for viewers to follow.

The hurdle can be summarized into awareness, activation and transmission. You need to be aware you can get something from your television – a link to a website, a coupon, an offer. You need to be activated – be able to react to a signal – an icon on the screen or some message in the television commercial. Finally, somehow the data or content needs to be transferred between the television and the smartphone.

NFC in the Nexus Q accomplishes two of the three tasks easily. With the Nexus Q Google can now activate viewers with smartphones with minimal effort. The bookcase example, in my opinion, is coupons. Imagine yourself watching a Tide laundry detergent commercial on television. A light turns on the Nexus Q, a message or an icon show up during the commercial to invite you to tap your phone on the Nexus Q. The tap sends your smartphone to the website where you can get the coupon. No apps necessary. It just happens, because that’s what NFC is: tap and go.

This can be taken a step further into instant commerce. With Google Pay or Wallet you can even order products from a TV commercial right to your home. You tap the Nexus Q, and with Google knowing your account information, an order can be made instantaneously.

Like with coupons, the Nexus Q can drive you to content that enriches your engagement with the currently playing TV show. Things like an app or a website, elements that extend your viewing experience. Transmedia (http://j.mp/LRFnAj) will become easier to accomplish for creative producers and visionaries.

Technically this Nexus Q NFC capability is very feasible. The main challenge will be to identify what you are presently watching. Companies are already doing that (http://j.mp/MZhpAB) which means that Google can develop its own technology or buy one of the players. Knowing what you are watching then enables Google to sell the NFC extension capability to advertisers and producers. These will in turn set up trusted web services that will communicate with Google’s own services to identify or just provision content to the Nexus Q owner. Sounds easy, right?

In summary, the Nexus Q brings NFC to television. Television makers do not have the vision or the motivation to put NFC in their sets, mostly because advertising is something they do on the demand side, not on the supply side. Google saw the opportunity and it is now coming. It is now only a matter of cost and adoption. And hopefully you also know that all of this is just conjecture and prognostication. I’m just really eager to see NFC do something meaningful. Beyond payments.

The Motorola Dilemma; do agencies have a lesson there?

A Wall Street Journal story about Motorola's relationship with Verizon and Google yesterday made me think of the tough situation mobile phone makers are in. The company is betting on partnerships with Verizon and Google for its future. Verizon as a carrier is important, but Verizon will go wherever the next iPhone wannabe is, not caring who makes it. Google, on the other hand, is where the risk lies.

Using a common operating system is nothing new. Nokia's Symbian was used by many manufacturers successfully for almost a decade. But this common foundation, while breeding a 3rd party app developer ecosystem, drastically increases the demand to produce great hardware. If your device cannot cut it, consumers will reject it. The alternative is to ditch the common operating system and create a combined, premium software/hardware combination. Apple succeeded, Palm did not, Samsung dreams it can. In Motorola's case, its own old basic operating system survives on low-end phones, while it realizes savings from avoiding its own Linux-based operating system's development costs.

In a way Motorola has something a reason for optimism. It DID produce excellent designs in the StarTac and Razr series. But now, if the hardware is not compelling enough, it will be toast. Worse, it is relegated the ranks of generic hardware manufacturers like HTC (well, they wish they were HTC at this point), LG, Samsung and Pantech. So the key here is design. And design translates to a unique proprietary flavor. The gist of 'why would I buy this phone as opposed to the others'.

Is this a unique business situation in a specific marketplace? Not really. Retailers compete to sell the same product on shelves they think are better organized, in stores they hope are cleaner and providing service that excels beyond that offered by their competitors. Technology offers a level playing filed in creating something that a brand can say is unequivocally superior. Snappier operating system experience is one; better video playback, a great keyboard or camera, remarkable call quality and stability are others. Again – proprietary flavor, a unique business proposition, the differentiator.

Working in an agency we operate in a miasma where beloved clients who love you have 6-18 months on average in a job. The next guy will bring his own agency and you're gone. Interchangeability is the name of the game and being on par with your peers is a good and common place to be. That is the core of why the problem is similar: if your agency lacks differentiation, you will be considered, invited, known, but nothing will pop to people's minds when they think of you. If you have a good idea that services the client well, great; you might get the assignment. What is missing is that differentiator, and I look right back at that concept of 'proprietary'. Proprietary is the hook. Proprietary is what you can do, only you have access too, and is a factual advantage to you. And when the client likes that proprietary capability/service/offering – they have no choice but stick with you.

For an agency that might mean having creative that knocks the ball out of the ballpark every single time. But that's difficult to achieve and can be draining. I am a technologist. I care about building stuff. And I think an agency needs to invest (!) in building technology that is the differentiator, maybe even the foundation, for its relationship with clients. That's really challenging, and may be expensive, but can simplify customer relationship lifecycle – acquisition, retention, expansion – from the current rat race. It is a very steep slope to crawl upon. You need to discover a need, do it once, and bet on repeating it. Worse yet, the agency suddenly needs to support technology, not only customer needs. Having a product is an entirely complex ball of wax all by itself.

Do agencies have a choice to avoid it? I am not sure. You can still partner with vendors – like Motorola does with Google – but your competitors can do so too and come up with a better offering that you will. Brands are not stupid either. They are happy to go straight to startups to get their own edge and to avoid paying agency overhead.

Therefore, agency folk, the choice is yours: become more of a startup, get your proprietary flavor, or remain adrift in a very flashy variety of a sea of gray.