Olympics show digital screen making its mark | Special Reports | Marketing Week

Digital out-of-home advertising is fast becoming an essential medium for clients to reach a wider audience, and will get even better with continued investment.

Just as this summer’s Olympic Games saw the results of years of work and training for the athletes involved, they also marked the culmination of 18 months of progress in digital out-of-home advertising.

The Games saw blue-chip brands using digital out-of-home (DOOH) as part of their media repertoire as three key factors came together.

The first was scale - the sheer number of digital screens available following a period of intense investment by the media owners. Second was technology as the infrastructure was developed to allow screens to respond to user-generated input in real time. And the third was the Games themselves - long predicted to be a tipping point for DOOH because of people’s desire for real-time information and the location of the audience when the events were taking place.

The end result was a dramatic step up in what DOOH can deliver, and a challenge to advertisers and agencies to start finding ways to use this new capability.

Three years ago, digital screens accounted for between 6 and 7 per cent of the UK outdoor sector’s revenue. By last year that rose to 14.4 per cent, or almost £128m, according to trade body the Outdoor Media Centre (OMC). And in the first three quarters of this year advertisers have spent about £126m on the medium, or between 18 and 19 per cent of the total.

OMC chief executive Mike Baker flags up the difference in spending on digital outdoor by different verticals. Although the Nielsen figures only cover large-format digital outdoor, they show that the food, drink and telecoms sectors account for a smaller percentage of spending in digital outdoor than conventional outdoor, but the motor, travel, media, clothing and games sectors account for a bigger chunk of digital.

“What you can do with creative helps to explain the different use by category,” says Baker. “Motor and travel used to be big spenders in digital, but that spend dwindled. Now they’re coming back into digital outdoor.

“Many upmarket brands are also happy to advertise using digital when they wouldn’t use conventional outdoor, because of the superior quality of the image.”

The growth in the number of digital screens and advertisers’ enthusiasm for using them has happened in parallel with a technological shift. One of the benefits of digital outdoor is that it breaks the traditional two-week cycle of outdoor, allowing advertisers to change creative according to the time of day, or even run campaigns that last hours and days rather than weeks.

Real benefits

Work by the site owners on the back-end systems and by companies including Grand Visual and The Cloud and Compass to develop content management platforms meant that

by the time of the Olympics, digital outdoor screens could incorporate messages changing in real-time. This feature was something that brands, including BP and Heineken (see Case Study, below), capitalised on around the Games.

“There were two elements to our digital outdoor work around the Olympics,” says BP’s UK brand manager Mark Rose. “One was the link to social media and the other was the real-time messaging around individual athletes.”

BP’s aim was to boost people’s perception of the company and its support of the Games, and to reinforce the idea that the company is committed to the UK and UK communities.

BP also realised this was not a time for brands to talk about themselves. So it used digital outdoor and social media to celebrate those who had helped make the Games possible.

“We created a Facebook app that allowed people to submit their stories about how they, like BP, were helping with the Games. We took a selection of the stories and they appeared on digital screens in the London Underground,” says Rose. “The social tie-up ran from July until the end of the Paralympics. We had between 300 and 400 stories submitted and around 50 made it onto the digital outdoor screens.

“To try and cut through the busy Games environment, we realised that we needed to be relevant and of-the-moment. We were sponsoring three Olympic athletes and three Paralympians, so we mapped their schedules through the Games and created appropriate good luck and well done messages that we could trigger at the right moment. For example, the moment Jessica Ennis won gold [for the Heptathlon] we put an ad live across the network of screens we were using.”

BP’s creative agency was Ogilvy, which used Grand Visual’s OpenLoop platform to deliver the real-time content, while Mindshare booked the space.

Rose continues: “We had to go to the media owners before the Games to show them what we were going to do and the language we were going to use. We had to show them there was no risk involved and that the activity would enhance life for Londoners during the Games, which meant all of this had to be planned a couple of months in advance.”

Both the social and reactive elements were part of the original thinking for the campaign, something Rose believes was crucial.

“You need to plan how you’re going to use the space in a way that will stand out, and you need to do that in advance,” he says.

A successful racquet

IBM was another company using the real-time capabilities of DOOH in the summer but around Wimbledon rather than the Olympics. The IT giant is the long-standing technology partner of the tennis championship and, according to UK brand advertising manager and brand and identity manager Rosemary Brown, each year the company looks to raise the bar for its advertising around the event.

“We have predictive software called SlamTracker in place at Wimbledon that analyses the performance of players to predict how they’ll get on against each other and what they need to do to win,” she explains. “We wanted to show this to a business audience, to say ‘if we can do this for sport, think what we can do for your business’.”

The result was a campaign that identified the key elements of the matches played that day. Because IBM and its creative agency, again Ogilvy, were unable to film at Wimbledon, the footage had to be mocked up to look like fans cheering on their heroes using the key messages identified by the software.

“In the mornings we said what the players had to do to win, then during the matches the messages changed to reflect what the software predicted,”says Brown.

“Digital out-of-home gave us reach. Last year we just used ECNlive, which is a network of screens in office lobbies in the City, to target a business audience, but this year we wanted more of a mass audience, so we also used Transvision screens in railway stations. Play at Wimbledon takes place when people are out at work, so we used the screens to give quick updates of the scores, by adding updates into the advertising. That was a lesson from last year.”

Street wise

Since the summer, brands have continued to experiment with linking social media and digital outdoor. The latest is Marmite, which is using the two technologies in tandem to raise awareness of the launch of its limited edition Marmite Gold. The brand has a screen outside Selfridges as part of its Oxford Street Christmas lights sponsorship and is inviting people to submit photos of themselves pulling either a ‘love’ or a ‘hate’ face to appear on the screen, via a Facebook app or a camera in an interactive bus shelter unit nearby. The images will appear on the screen for a minimum of 10 seconds, and each one will be captured by a webcam. People will be notified of the appearance of their picture and given the chance to share it on their own Facebook pages. The creative agency on the campaign was DDB, using the Grand Visual platform.

“The Oxford Street opportunity was there, then once we worked out the details of the sponsorship the creative juices started flowing and digital outdoor seemed like a great fit,” says Marmite brand manager Joanne O’Riada.

Unlike many real-time digital outdoor campaigns that have used traditional brand or social media metrics, Marmite’s campaign is focused on sales.

“The campaign is intended to drive national interest and awareness of the launch, and we’re very focused on sales of the limited edition,” says O’Riada.

Beyond the use of social media, which BP’s Rose describes as “the glue that binds everything together”, other technologies are starting to appear. Media owner Ocean is among those experimenting with facial and gender recognition to improve the targeting of ads on its sites.

The company is working with House of Fraser and media agency Starcom MediaVest to test the technology on a 12m screen at Westfield shopping centre in West London. The House of Fraser ad is one of three running on a loop and there are three versions: one focused on women’s fashion, one on men’s fashion, and one generic brand ad. When the department store’s slot comes round, three cameras mounted on the screen photograph the people walking past. The software analyses the gender breakdown and, if more than 60 per cent of the audience are of a particular gender, it screens the appropriate ad. Although the technology is still being tested, Ocean plans to roll it out across similar screens in its estate.

With the activity around the Olympics demonstrating what digital outdoor is now capable of, and with the emergence of new technologies and the introduction early next year by outdoor audience measurement body Postar of new audience data, the sector is confident of a bright future.

Investment in the digitisation of the estate continues with growing emphasis on roadside locations; media owner JCDecaux recently announced plans to digitise every site on London’s Cromwell Road.

The OMC’s Baker expects the proportion of outdoor spend on digital to reach 30 per cent in the next few years, although he also expects the pace of growth to slow.

“There will be a plateauing, because it’s easier to find the best sites to digitise at the beginning,” he says. “At the same time, the cost of the technology will continue to come down and its reliability will improve, creating a virtuous circle.

“As long as the media companies continue to invest and advertisers continue to find ways of using the medium, I think it bodes well for the future.”

Q&A

Louise Dennett
Brand manager
Heineken

Marketing Week (MW): What was the thinking behind the campaign and in particular the digital out-of-home element?

Louise Dennett (LD): Our London 2012 campaign was focused on a theme of ‘celebration’; in short, we wanted consumers to enjoy the world’s best athletes coming together at the Games with a cold Heineken. We set out to ensure the ‘Celebrate London 2012’ theme ran across all of our Olympic and Paralympic activity, and to provide a lens through which we could judge not only media but also our channel activations and how we operated.

We wanted to create an exciting fan experience that would encourage interaction across a number of media touchpoints that we know are used by our ‘Heineken Man of the World’. We know our audience are heavy commuters and always in search of new experiences and information. Our aim was to make our content as relevant and dynamic as possible to drive intrigue and interest, particularly as this campaign was to run across the entirety of the Olympic and Paralympic period. In order to fully leverage the Man of the World’s digital experience, we worked with our media agency MediaVest to create a campaign of activity across Yahoo.com, DOOH, Twitter and mobile.  

We knew the London 2012 Games would also present a very cluttered media environment and we therefore made choices designed to cut through the noise and create impact − selecting to go big and bold in targeted locations through our ‘station domination’ activity at London’s Charing Cross and Liverpool Street stations, which saw the Heineken Celebrate London 2012 campaign message amplified on all major media sites at these stations during the 2012 Games period.

MW: How did the DOOH activity integrate with other activity at the time?

 

LD: We partnered with Yahoo! to develop a Heineken fan hub filled with celebration theme content and journalism, user-generated content and Games updates. Working with Grand Visual we used OpenLoop technology to scrape the Fan Hub content in real-time to deliver dynamic, snapshot updates throughout the day, direct to the DOOH sites across major London stations and Westfield Stratford. Consequently, our consumers had the latest information on the medals to celebrate or could see their own celebration images on the screen. We also ran geo-targeted mobile activity in proximity to our DOOH sites and activity on Twitter on key dates.

MW: What metrics were used to evaluate the activity?

LD: We commissioned bespoke research with our key media partners [JCDecaux and Yahoo!]and a broader piece with Millward Brown to measure the effect of our full multi-media campaign and sponsorship activation on our brand equity metrics, association recall with the Games and the effect of the creative itself.

MW: What did you learn about DOOH?

LD: We’ve found being selective with media placements drives impact; our station domination activity delivered cut-through and brand reconfigurability. We understand the importance of creative that’s crafted being mindful of its environment and how our consumer interacts with the space. We also know the benefit of making progressive media choices to reach our Man of the World.

Case study

IBM

Technologies such as gender and facial recognition software are starting to bring a greater level of targeting to digital outdoor. But there is another approach to the same problem that is also gaining traction - location-specific networks.

Last year, when IBM wanted to target a business audience around its partnership with Wimbledon, it went with ECNlive, a network of 200 digital screens in the lobbies and lift areas of 130 office towers. This year it wanted greater reach and added Transvision screens in railway stations, but it kept ECNlive to address the business audience.

UK brand advertising manager Rosemary Brown says IBM has had a long-term partnership with ECNlive. She says the initial appeal was that the network was

in the places the brand wanted to be seen, and had a clearly defined audience.

“They could be very specific about the audience, because they had the client lists for the buildings,” she says.

Another example of a location-specific network that targets a similar audience, this time when they are travelling, is 7 Heaven Media. It launched on 8 November to manage ad sales for a network of 250 interactive screens in 165 private jet lounges across the Emea region.

The resulting audience of business decision-makers and high net worth individuals means that the company is targeting premium and luxury brands. Clients include Swiss watch brand FP Journe and private Swiss bank Pictet & Cie.

In both cases, advertising is only part of the offering. In order to increase dwell-time, 7 Heaven splits its time 60 per cent content, 40 per cent advertising, while ECNlive provides content such as live news, stock market and sports results updates.

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Customized Ad Campaigns Driving Growth of Workplace Media | Digital Signage Connection

It's a fact — digital place-based media has reached critical mass in the United States. Research from Arbitron shows that 70 percent of consumers ages 12 and up have actively watched a digital video display in a public venue in the last month. This helps to explain why advertisers from many industry sectors and categories have embraced this medium to reach consumers in pretty much every venue setting outside of the home. These settings include supermarkets and shopping malls; medical and dental practices; gas stations; health clubs and spas; hotels; airports; office buildings and more.

Jim Harris, CEO, The Wall Street Journal Office Network

It's no wonder then that place-based media has been growing faster than almost every other sector of advertising. It's equally not surprising that digital advertising at the workplace has grown even faster than the place-based industry as a whole. From a marketer's viewpoint, workplace media provides several advantages:

• Attracting attention when consumers are not exposed to other advertising platforms and messages.
• Influencing consumers throughout the day as they make a multitude of purchasing decisions via at-work computers.
• Targeting audiences by industry, size, specific company, or title.
• Reaching consumers and business decision makers close to the points of research, consideration, and purchase.
• Driving consumers to specific retail locations.

While it's true that "TV everywhere" is the mantra of the moment; not all video networks and screens are the same. Differences in screen size, content and content sources, specific placement, clarity, technological capabilities, and more, abound within the world of digital place-based information and advertising networks. The key is to reach consumers and business decision-makers in environments in which they're more likely to be receptive to advertiser messages via screen units that are large, attractive, modern and most importantly, easy to see. And, of course, the network must provide content and information that is important and relevant to the audience at hand.

Research Shows Brand Lift

According to comScore, more than 50 percent of ecommerce purchases take place at work, as business professionals research products and services for their companies and for themselves. Reaching these decision-makers at the office, in a high quality, clutter-free environment has powerful effects.

Now in its sixth year of operation, The Wall Street Journal Office Network (WSJON) continues to add to its roster of large, strategically placed, high-definition screens on which continuously updated news and headlines from The Wall Street Journal are presented, alongside digital video advertising. The Network is located within high-traffic elevator banks and lobbies within 760-plus premier office buildings in 15 U.S. markets. The ability to customize advertising campaigns with proprietary SmartMedia Apps has been one of the drivers of our advertising growth, which has been triple the rate of the digital place-based media industry as a whole. One of the most illustrative case studies of effective use of SmartMedia involved a national drugstore chain that wanted to customize its ads to direct consumers to stores in markets where they could receive the H1N1 flu vaccine. WSJON used its custom mapping capability to "geo-tag" ads on each screen to direct viewers to the very closest retail location selling the vaccines. The campaign was one of several contributing factors in the chain selling out of the flu vaccine less than two weeks after it began.

Recently, a major German auto manufacturer was able to tailor a campaign for one of its SUVs in an effort to enhance its marketing presence at ski resorts throughout the U.S. WSJON was able to insert real-time snow conditions at various resort destinations into space adjacent to its ads. A U.S. auto company, meanwhile, enhanced the national ad campaign for a new model by showcasing its navigation and entertainment system. In the video ads on WSJON, real-time local traffic reports were provided in map form throughout the day in a space that replicated exactly how the touchscreen system appears within the car.

Research proves that the use of place-based digital advertising provides a lift to critical brand effectiveness metrics. After a well-known financial services firm ran digital video ads in office building lobbies for less than one month, leading market research firm Brand Keys conducted a telephone study of people who work in those buildings. Recall of the campaign in office building lobbies exceeded that of magazines, newspapers, online and radio. Brand Keys states that a firm's brand strength and engagement measure are the best predictive metrics of in-market performance. The financial services firm realized a significant increase in these metrics (+11 percent) among those who were exposed to the office campaign, and consideration of the brand improved to four times the category average.

Enhancing "Shopper Marketing"

There are good reasons why "shopper marketing" — the ability to influence consumers as closely as possible to the point of consideration and purchase — is a fast-growing discipline. Back in 1995, John Philip Jones, a professor at the Newhouse School of Public Communication at Syracuse University, shook up media planning with a seminal book titled "When Ads Work." In his treatise, Jones postulated that a single advertising exposure could prompt the purchase of a product or service. The key to his thesis was timing: the single advertisement that could move the consumer needle was the most recent in a series of advertising exposures just before a purchase is made. Even though Jones wrote his tome when the Internet was still a gleam in Al Gore's eye, this is precisely where place-based digital advertising shines today.

In his book, Jones made this observation about the importance of product promotion: "Do not advertise without some promotional support. Do not promote without some advertising support." What about doing both in the same place at the same time? A prime example is what a U.S. technology company did to increase purchase and use of its smartphones among small businesses and small-business owners. This company employed WSJON workplace screen advertising, combined with hands-on product demonstrations within the lobby spaces. Research firm Brand Keys found that average purchase intent rose more than 50 percent (compared to a control group that had not attended the demonstrations) and that brand strength and engagement — the Brand Keys predictive gauge — rose more than 60 percent. Most compelling was the fact that among the people who attended the demonstrations and saw ads in the lobbies of their office buildings, actual product sell-through was 16 percent within 120 days of the events. The combination of office building-based ads and product demonstrations outperformed general brand advertising alone by a ratio of 8-to-1.

What lies ahead for the digital place-based space? Technology currently under exploration will enable consumers to interact with video ads in ways that futurists just a few years ago would have envied. Digital place-based ads will provide marketers with solid direct-response metrics that will further enhance their marketing campaigns and show the efficacy and ROI of place-based advertising. The uncharted boundaries of technology represent the only limitation on how successful this already robust, highly visible, and successful medium can become.

Copyright © Platt Retail Institute 2012 and reprinted with permission. All rights reserved. See the entire PRI Resource Library at www.plattretailinstitute.org/library.

Jim Harris is CEO of The Wall Street Journal Office Network, a leading digital place-based news and advertising platform. A graduate of Northwestern University's Kellogg School of Management, Jim has an extensive background in marketing, advertising and brand management, and serves on the boards of several organizations, including the Digital Place-Based Advertising Association.

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The 2013 Digital Signage Expo 360 Global Perspective Program has just been released! | From DailyDOOH #dse2013

Adrian J Cotterill, Editor-in-Chief

For the second year, Digital Signage Expo and DailyDOOH have joined in creating an unprecedented half-day international conference with the goal of providing technology providers, systems integrators, network operators, advertising agency executives and others an overview of the opportunities, challenges and achievements in the use of digital signage and digital out-of-home networks around the world.

The 2013 event covers Eastern Europe, Asia/Pacific and Latin America (with speakers representing Poland, Japan, Australia, the Philippines and Brazil), will provide an ideal opportunity for anyone looking to network and do business outside their current region.

Schedule:

• 8:00am Registration
• 9:00am Welcome
• 9:30am The Key Digital Signage Players in Japan and Their Thoughts on the Market
• 10:15am Obstacles and Opportunities: An Overview of Emerging Asian DOOH Markets
• 10:45am Opportunity and Risk — Digital Signage Market in Poland and Other Central East Europe Countries
• 11:30am Brazil and Latin America DOOH: Opportunities to Grow UP!!!
• 12:00pm ONLINE or REAL TIME — The Challenges of Managing Over 20,000 Screens in Different Environments and With Different Content

Prospective attendees can register here

Celebrating its 10th anniversary in 2013, DSE has grown to attract attendees from not only all 50 states but also from more than 60 foreign countries. Over the years, DSE has increasingly become a meeting place for the international community to see and display new technology and share the knowledge necessary for business success.

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This entry was posted on Wednesday, November 21st, 2012 at 13:04 @586 and is filed under DailyDOOH Update. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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The World Will DOOH It for the First Time - in London! #Int'lDailyDOOHGalaAwards

Paris, 20 November 2012 - The first annual International Awards
Ceremony totally dedicated to Digital Out of Home advertising takes
place in London on Thursday November 29th.

The DailyDOOH GALA AWARDS is being held at the Banqueting House,
Whitehall and is sponsored by NEC Display Systems’ ad serving platform
VUKUNET.

Finalists include, outdoor implementations from Amscreen, Eye,
JCDecaux and Ocean Outdoor, campaigns from the likes of DLKWLowe and
Posterscope, indoor installations at Bloomberg’s head office in New
York, the London Stock Exchange and Westfield London’s Stratford City
Mall as well as award categories that encompass the best that the
quick service restaurant and high street sectors can offer.

Organiser Adrian J Cotterill, DailyDOOH, Editor-in-Chief said: “We
believed that the industry needed its own impartial, professional,
upmarket annual award ceremony. One that could truly do the sector
justice. ”

The prestigious Black Tie event will be held under the magnificent
painted ceiling in the Banqueting House Main Hall, a ceiling painted
by Sir Peter Paul Rubens and members of his studio in Antwerp, then
shipped over and installed in 1636.

Guests will enjoy a gourmet three-course meal and fine wine followed
by a musical surprise before launching into the heart of the event.
The evening’s Champagne Reception and ‘After’ Party are being
sponsored by Scala Inc, one of the world’s leading providers of
digital signage solutions, who is celebrating its 25th anniversary in
November.

For more information visit http://dailydoohgalaawards.com/

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The ultimate ad metric cometh: an actual sale! | From AdAge: NBC Universal, AmEx See Dawn of 'Television Commerce'

The idea of buying something you see in a TV show by pressing a button on your remote or smartphone has long been the stuff of futurist gabbing or science fiction. Now NBC Universal and American Express are the latest to try to turn the idea into reality.

Linda Yaccarino

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The companies have formed a partnership that will let consumers purchase products "inspired by" NBC Universal programs directly from a mobile device while the programs are airing.

To do so, they'll use Zeebox, the social TV app in which NBC Universal and its parent Comcast Corp. took a stake earlier this year. The app, which works on certain tablets and smartphones, lets users converse in real time with friends who are watching the same show, or follow related Twitter and Facebook feeds. Under the new program, Zeebox will also give users information about how they can purchase show-related items such as couture and kitchenware.

NBC Universal's DailyCandy website will select the products that might appeal to viewers of shows such as Bravo's "Life After Top Chef," E!'s "Fashion Police" and Style's "Tia & Tamara."

American Express card members can receive $35 back when they use an eligible American Express Card, synced with their Facebook or Twitter accounts, to purchase one of the products.

"As viewer habits change and technology continues to evolve, and scale gets more elusive, context and impact mean everything," said Linda Yaccarino, president of NBC Universal ad sales, noting that more sponsors were seeking ways to play off the content their advertising supports instead of just running commercials that have little to do with the programs.

American Express sees the dawn of a new age of TV watching. "We're certainly not inventing advanced TV, but we think there's going to be a cultural shift," said Lou Paskalis, VP-global media content development and mobile marketing at American Express. The company envisions the TV becoming a sort of two-way digital hearth, he said, "where a lot of information is exchanged, as opposed to simply consumed, whether it be entertainment information or commerce-enabling information."

For decades, it seems, networks have dreamed of selling, say, the sweater Rachel Green wore on the latest episode of "Friends." To update this for contemporary TV, perhaps they'd like to sell one of the waitress outfits on "Two Broke Girls" or the cardigan worn by Claire Dunphy on "Modern Family. NBC Universal's program with American Express is still only a tentative step toward that notion. SeenOn.com has been working in that direction for several years. The SeeLoveBuy app is a more recent arrival in the nascent space.

American Express isn't expecting millions of dollars in transactions to take place this time around, Mr. Paskalis said, but rather wants consumers to see the company enabling new ways of purchasing goods and interacting with programming.

"Consumers are impulsive and we realize how impulse sales in part of our business are driven by TV," he said. While people who might try so-called "television commerce" today "are really savvy and sophisticated," Mr. Paskaslis said, "in the future, it's going to tip to an even broader audience, and they're going to be able to transact on any screen. We're at the very start of the journey."

Devising these ideas for advertisers is critical for Ms. Yaccarino and for NBC Universal, as both have something to prove. The company is eager to demonstrate the new ideas it can bring to market using the broad portfolio of media assets assembled when Comcast took majority control of the company in January 2011. Ms. Yaccarino was named to oversee all of NBC Universal's ad sales in September, placing her in charge of what may well be the broadest group of outlets -- and ad inventory -- in the media business.

The deal could also be a boost for the emerging practice of so-called "social TV," in which TV networks and advertisers are trying to find ways to reach viewers who are using "second screens" to talk, tweet and post about their favorite programs while they are on the air.

NBC Universal is working on more ad packages that involve social TV and Zeebox, Ms. Yaccarino said. "We are in the process of developing several different opportunities, from sports extensions at our company all the way to entertainment, whether it's broadcast or cable."

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Power Shift Perhaps: Voters Paying vs Being Paid? | From Mashable: How Mobile Is Transforming Political Engagement

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The Secret Sauce In Square's Starbucks Partnership: Discovery, QR Codes | Fast Company

Square, the mobile-payments service popular among baristas and food truck owners, is getting a big jolt from from its biggest merchant partner yet: Starbucks.

Starting today, the coffeehouse chain will now accept Square Wallet, Square's mobile app, which will let customers pay for Venti espressos via iPhone or Android device. Part of an ongoing partnership between Square and Starbucks, which the companies announced in August, the collaboration will help to streamline Starbucks' payment process while bringing more visibility to Square's service and local merchants. Starbucks, which will integrate Square's system at 7,000 US locations, has already seen more than 100 million mobile transactions from US customers since introducing similar payments platforms--a pool Square cofounder Jack Dorsey is clearly interested in tapping into.

Before, in order to pay at Starbucks, customers could use cash, card, or a variety of Starbucks' reward services. These platforms enabled customers to buy items via loyalty card or smartphone app, but they also required users to monitor and top-up their balances. Now, since Square Wallet is linked directly to debit or credit cards, customers no longer have to reload their Starbucks balances. Square's solution also eliminates the need for paper receipts, keeping track of them digitally within the app. To pay at Starbucks, customers simply need to open the Wallet app and scan their QR code at the counter--no need for cash or cards to change hands.

Of course, the QR code system is a departure for Square, which is known for accepting payments via a small, white smartphone or tablet card-reader. The startup has also pushed a service that removes most all of the friction from the payments process and allows customers to buy items essentially by saying their names. Neither solution is currently available at Starbucks. So while we shouldn't expect to start paying via iPads at Starbucks anytime soon, the QR code solution will at least help Square scale its service and will no doubt bring significant attention to its Wallet app.

Starbucks will now basically act as a hub for local merchant discovery

It's also likely to bring significant attention to Square's merchant partners. After paying with Square Wallet, the service will suggest nearby businesses that also accept the payment solution. So, for example, after I recently purchased an item via Square at Starbucks, the Wallet app suggested that I might enjoy a local cupcake store just around the corner. The app can not only be used to find nearby Starbucks locations but other merchants in the neighborhood; even the Starbucks Digital Network, the web service you see when taking advantage of Starbucks' Wi-Fi, will feature local Square-accepting businesses in the area. Starbucks will now basically act as a hub for local merchant discovery.

And that's ultimately Square's aim. As Jack Dorsey told Fast Company in August, “It’s not just the product that you end up drinking, but it’s how it’s served. It’s the experience walking into the store, walking out of the store, and everything around the store.”

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