Tuesday, February 15, 2005

Integrating The Internet With The Physical World

This came up through one of my alerts. I don't know who Little Spring Designs Design is or if they are being paid to promote, but I found the article very "familiar".

Integrating the Internet with the Physcial World.

Up until recently, the Internet, with all its information capabilities, was something you used while sitting at a desk. Do you want more information about a particular product? Check the internet. Would you like to compare prices? Check the internet. Would you like to know whether the product on the shelf you are looking at in the store is a good value? Wait until you get home.

Companies have long recognized the potential benefits of allowing the virtual world to interact with us in the physical world, but nobody has yet changed our lives in that way. Several companies are close, waiting on location-based services, but we believe that NeoMedia's PaperClick is likely to be the leading service for pull-based integration.

Pull based integration will turn into push marketing for brands.

Companies from the dot-com boom such as E-Compare were attempting to do price comparisons by requiring the user to type information using limited keypads. The services failed for serveral reasons, including slow network speeds, user typing, and the databases only including internet prices. The companies failed for all the above reasons plus not having good business models.

Along similar lines, there have been products that allow users to collect snippets of information from the physical world for later use. Examples include bar code readers such as NeoMedia 's Cross pen and even voice recorders.

Yes, the CueCat.

These solutions require a lot of time investment from the user, who has to be interested both at the point of information physical presence and later when the user sits down at a computer. This will only happen if the user has an intense interest.

Waiting on Location-Based Services

There is another set of products that will work beautifully once location-based services (LBS) are prevalent and cheap. Mobile yellow pages from companies such as Go2online and InfoSpace have good products. Perhaps the most important feature of these products is that they can extract revenues not from the users, but from the companies who would like "premier listings". However, these products won't really come into their own until location services allows the user to find the nearest restaurant or ATM to where they are, rather than some location they can actually type in. This will also allow accurate directions to get to the point of interest.

While Go2online is purely a "pull" technology, the advertising industry is clamoring to push messages to users based on time of day, situation, or location. At lunchtime, local restaurants could send coupons or other messages to increase traffic whenever necessary. The chief problem with these services, aside from lack of LBS, is getting people to opt in, especially in a country where the recipient and not the sender pays for messages. This problem can be overcome by giving users something of value in exchange for their participation, such as ringers, images, or coupons. Users' selection of what they value can help in market segmentation activities.

Seth Godin refers to this in his book Permission Marketing .

Permission is key for mobile marketing, This isn't spam or a pop-up, its much more intrusive. Those four square inches will be considered tho most valuable advertising real estate.

I talk about how advertisers must create campaigns that allow consumers to interact with the brand here.

Google purchased Keyhole , software and a database that allows users from their PC to view visual images of anything and everything outside, down to fire hydrants. They also recently introduce maps.google.com that gives users browser access to the data using Javascript. It may be only a short time until we can take pictures using our camera phones and have the phone tell us exactly where we are. This could be a method of getting location-based services without carrier participation, but the search requirements would be enormous without at least some help from the carrier or device. In the meantime, it's a cool desktop application.

Google buys Keyhole for their enormous database. Think of any vast database. That is what a search engine needs in order to provide a comprehensive search. Words, pictures, audio, video are all examples..Obviously the video contains the most data.

PaperClick – more than just bar codes

NeoMedia 's PaperClick service marries internet data with real-world objects. Wherever a bar code exists, users can launch an application on their camera-phone, take a picture, and be transferred to the appropriate web site. Taking a picture of a book's ISBN will direct the user to, for example, the Amazon.com web page for that book. A real estate sign bar code could take the user to a virtual tour of the home. A picture of a consumer electronics bar code could take the user to a page with demos, features, and user guides.

I call them Physical World Hyperlinks.

By the way, don't try to make your own bar code picture technology, unless you use the NeoMedia switch. They've got a set of patents, including a few protecting the use of bar codes or other machine-readable codes to look up electronic information.

A key court case could be settled in the next few weeks that may determine how encompassing these patents are.

The beauty of NeoMedia's business model is that they are monetizing the switch, not the end user applications. Companies can bid for specific bar codes or blocks of bar codes. For example, Amazon.com could pay for all ISBNs one year, but Barnes & Noble might win the bidding war in the following year. A real estate agent could pay for the bar codes for her properties. Sony could pay for bar codes for its products.

As more people use the PaperClick service the bar codes become more valuable, and NeoMedia has finally hit upon a combination of factors to make end user adoption easy. First, users can download the J2ME application to access PaperClick services for free. Second, the only necessary hardware is a camera phone with J2ME MIDP2.

The bar code technology can also be used to create interactive advertising campaigns, something NeoMedia is actively and successfully pursuing. Any sort of magazine or poster campaign can add a bar code, allowing PaperClick users can visit the site for information, ring tones, coupons, sweepstakes entry, or anything else deliverable via the Internet.

This is how mobile advertising starts. No need to pay for keywords when your user has given you permission to market to him on his cellphone.

The brand can reach the consumer anytime, anywhere...POWERFUL.

There are other ways to make money with PaperClick. Do you manage a tourist area? If you place a few signs with a PaperClick bar code, users can learn about when this building was built and burned down, what related information is nearby, how to get related souveneirs, how to get anywhere else in the tourist area, and where the nearest bathroom is, all for relatively low costs. The user can keep all this information, especially directions, long after walking away from the sign or kiosk. You can also track users' interests by their behavior. You can integrate with a service such as Go2online to integrate your tourist area with the larger region, providing users with a nearly seamless integration.

At CTIA Wireless & IT 2004, NeoMedia also announced keywords for sale (their WordRegistry service). While this sounds like yet another Internet land grab, we need to look at it in the light of the PaperClick service. Within the same PaperClick application that allows users to take pictures of bar codes, users can type a word or phrase. The idea is that the PaperClick switch would then take the user to the "correct" web site. Typing "Treo 650" could take the user to the PalmOne Treo web site, rather than a community site or a sales site. This will work once PaperClick approaches ubiquity. In the meantime, it's another land grab.

Ubiquity is key. If I was Google I would start incorporating this ability into my search. The point when more Internet traffic is done via mobile device than the PC, then what do search engines do then?

The dream of a virtual-enhanced physical world is one of the guiding visions of the mobile internet. Companies have been waiting a few years to get good location-based services from the carriers, and some have failed during the wait. NeoMedia has taken an alternate path to interacting with the physical world, one based on their deep experience with bar codes. This one may work, and soon.

Yes, I refer to this as The Next Google?..No Much Bigger...

1 comment:

Anonymous said...


If NeoMedia's patents are upheld in court, do you believe that their economic moat (patents) will be enough to give them an enormous competitive advantage against all others? And, if so, how do you begin to put a value on the company?

On a side note, I did read Rheingold's "Smart Mobs." It was so fascinating I'm reading it a second time to catch things I could have missed. Do you have any other books that qualify as "must reads" to better understand pervasive computing. Thanks, -Walden-