How the integration of RFID into mobile devices can, in my mind, revolutionize targeted digital signage advertising.

I’ve been contemplating writing on this topic for quite a long time. It’s one that needs kickin’ around because I feel it will be of supreme importance in the development of out-of-home advertising going forward. Before I get down to the knitty gritty, let’s visit the idea of RFID technology in general. What is it? How does it work? Where has it been? Where is it going?

RFID stands for Radio Frequency Identification and an RFID device is usually known as a “tag” or “transponder.” Appropriate RFID technology requires not only an RFID tag but also an RFID reader. The RFID tag can be incorporated into anything: a product, an animal, a person, or in this case, a cellular phone. The device is picked up by a reader using radio waves. The signal allows for identifying whatever information is held in the tag. RFID tags are very useful because they can be picked up by the RFID reader from quite a distance away.

According to Wikipedia, “Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal.”

RFID technology is currenly used a great deal in supply chain management. Wal-Mart is a great example of this. With such tight controls on their merchandising systems, Wal-Mart can easily track their inventory with the use of simple RFID tags. The uses go far beyond retail asset management. In fact, I have a couple of friends who live in the Washington DC area who have RFID tags embedded into their vehicles which allow them to autopay for their highway tolls. The uses of these devices are virtually endless. Recently, RFID tags are being used in cellualr phones by a company called SHIFD. But theirs is a story for another occassion.

We’ve determined the uses for RFID technology are vast. Similarly, the technology itself is almost as vast as its uses. For instance, there are several different types of RFID tags that can be used, with ranging functionality based on the specific tag. With such vast uses, it is foolish to conceive the digitla out-of-home segment not jumping all over RFID technology. It’s a simple scenario: embed an RFID tag as standard in mobile devices and embed an RFID reader as standard in digital signage media players. Well, I suppose it’s not that simple. In theory it’s simple, in practice it is, in fact, extremely complex.

RFID, Cellular Phones, and Digital Signage

When a cellular phone is activated how difficult would it be to register the RFID tag inside the device? Not very. In fact, it would be quite simple. A new PDA would simply ask a few questions to determine demographics for out-of-home advertising purposes. Questions like:

What is your year of birth?
What is your gender?
Where are you from?
etc. etc.

After determining the appropriate answers to these questions, the RFID tag then carries this information and transmits it to the RFID reader embedded in digital signage media players. When an individual approaches a digital display, the RFID reader picks up the incoming signal and corresponding demographics of the person carrying the mobile phone and displays ads specifically targeted to the customer’s demographic.

So, in theory, the ad management system on such a digital signage network would be highly targeted and complex, allowing advertisers to enter a portal and specifically target on a local/national basis the age, gender, race, religion of who is going to be within sight of any digital display on the network.

I know it sounds a bit “1984″ or “big brother”esque to have an RFID tracking device in your cellular phone, but let’s face it, we live in a world of decreasing privicy. I know Wirespring’s Bill Gerba posted some time ago on the need for digital signage networks to maintain privacy. While I certainly agree with him, I also believe it’s not a big deal to know generalized demographic information while negating specifics about consumers. But again, that’s just my opinion.

Technical Issues

No doubt you most likely have some questions going through your brain right now:

What about multiple persons in close proximity to the screens? In such a case, what type of content gets displayed?
What about storage space? If you’re talking about storing advertisements on a media player for every type of demographic, how do you manage such a database of advertising information? How are the advertisements pulled to the screen in an efficient manner?
What about privacy? What if people don’t want to register their demographic information into a database?

There are technical ways to go around some of these issues, but others involve changing attitudes about privacy, which may not happen this century…or ever.

Other Applications

I see this going way beyond simply integrating with digital signage, but something that could be used with electronic jukebox systems, smells/perfumes, and social media integration with online sites like Facebook and MySpace.

RFID technology is to targeted out-of-home as Google is to online search.

This type of a system is still several years out, but those willing to push the envelope of technology will be able to capitalize on this type of technology. Who knows, it may never come to pass…