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공학 사학 청구논

Design and Analysis of Tag Match Advertising Model

in Mobile RFID Environment

모 일 RFID 경에 태그 매 고 모델

계 분 에 한 연구

2009 2월

인하 학 공학 학원

자공학과

Design and Analysis of Tag Match Advertising Model

in Mobile RFID Environment

By Jungho Jun

Advised by Dr. Deok-Hwan Kim

A THESIS

Submitted to faculty of

INHA UNIVERSITY

in partial fulfillment of the requirements

for the degree of

MASTER OF ENGINEERING

Graduate School of Engineering

February, 2009

공학 사학 청구논

Design and Analysis of Tag Match Advertising Model

in Mobile RFID Environment

모 일 RFID 경에 태그 매 고 모델

계 분 에 한 연구

2009 2월

인하 학 공학 학원

자공학과

지도

이 논 공학 사학 논 출함

이 논 공학 사학 논 인 함.

2009 2월

주심 재 학

부심

원 장

Dedicated to My Parents

i

ABSTRACT

Design and Analysis of Tag Match Advertising Model

in Mobile RFID Environment

By Jungho Jun

Major in Electronic Engineering

Department of Electronic Engineering

Graduate School of Engineering, INHA University

This research proposes the ‘Tag Match’ advertising model which uses mobile RFID. Tag Match

Advertising (TMA) combines features of the mobile RFID characteristics and content match

advertising model on the Internet. TMA model can be defined as “an advertising model, based on

mobile RFID application, which offers the most appropriate advertisement for users after the

consideration of users’ demographic information, the location and time when users touch a RFID

tag and the content of the tag when users touch it”. This research describes its scenarios, processes,

participants and their benefits. And this research also proposes the architectures and the user

interface of TMA and evaluates the feasibilities of the system by assessing the assumptions that are

the basis of structured model.

ii

國文抄錄

Design and Analysis of Tag Match Advertising Model

in Mobile RFID Environment

본 연구는 모 일 RFID 경에 ‘태그 매 고’ (Tag Match Advertising) 모델

계하고, 평가한다. 태그 매 고 모델 모 일 RFID 특 과 인 상에 행

고 있는 컨 트 매 고 모델 결합한 모델 , ‘모 일 RFID에 하여, 사용

자 데모그래픽 보, RFID 태그를 한 시간 장소, 사용자가 한 RFID

태그 직 보 등 고 하여, 사용자에게 가장 합한 고 공하는 고

모델’이라고 할 있다.

본 연구에 는 모 일 RFID 태그 매 고 모델 계하 하여, 사용자

시나리 를 시하 고, 운 프 스를 시함 써 생할 있는 이슈

들에 하여 검토하 며, 각 참여자들 역할 잠재 이익 시하 다. 그리고

익- 용 분 과 본 모델 계 탕이 가 들 평가함 써, 각 참여자들

참여 조건 본 연구에 시하는 모델 구 가능 검토하 다.

태그 매 고 모델 ‘ 쿼 스 상거래’(Ubiquitous Commerce) ‘ 쿼 스 미

어’(Ubiquitous Media)를 한 매우 새롭고 도 인 모델이라 할 있다. 향후

본 연구를 탕 하여, 실 구 한 연구가 행 어야 하며, 구 통하여

태그 매 고 모델 효과 효 검증하는 과 이 행 어야 할 것이다.

iii

Table of Contents

1. Introduction …………..…………………………………………. 1 1.1 Research Background ……………………………………….………………...………… 2

1.2 Research Issues and Organization ………………………………….…………...………. 4

2. Design of TMA Model ……………………..……………………. 8 2.1 Scenario …………………………………………………………………………………. 9

2.2 Process of Operation ……………………………………………………………………. 11

2.3 Role and Potential Benefits of TMA Model Entity ………..…………………………..... 15

2.4 TMA Architecture ............................................................................................................. 19

2.5 TMA User Interface .......................................................................................................... 20

3. Working Condition for the TMA Model .................................... 22 3.1 The Condition for the TMA Network-registered Advertiser ............................................ 23

3.2 The Condition for the Object Manager ............................................................................. 25

3.3 The Condition for the Customer .................................................... .................................... 26

4. Analysis of TMA Model ............................................................... 28 4.1 Comparison with Content Match Advertising Model ...................................................... 29

4.2 Assumption Evaluation of TMA Model ........................................................................... 35

5. Conclusion .................................................................................... 41 5.1 Summary and Contribution .............................................................................................. 42

5.2 Limitation and Future Work ............................................................................................. 43

Reference .......................................................................................... 44

Acknowledgement ............................................................................ 49

Curriculum Vitae ............................................................................. 50

iv

Figures

Figure 1. TMA Model Process ....................................................................................................... 12

Figure 2. TMA Architecture ........................................................................................................... 19

Figure 3. TMA Graphical User Interface ....................................................................................... 20

Tables

Table 1. The Role, Value Proposition, and Potential Benefits of TMA Model Entity ................... 18

Table 2. Comparison Cost-Profits between Advertisers ................................................................ 25

1

Chapter 1

Introduction

2

1.1 Research Background

1.1.1 Definition of Ubiquitous Commerce

Recently, ubiquitous commerce research has been defined by ubiquitous computing and e-

commerce researchers. According to Watson et al. [30], ubiquitous commerce is defined as the use

of ubiquitous networks to support personalized and uninterrupted communications and

transactions between a firm and its various stakeholders to provide a level of value over, above,

and beyond traditional commerce. Roussos & Moussouri [25] defined ubiquitous as any

transaction with a monetary value that is conducted using ubiquitous computing technology.

Lee & Ju [13] defined ubiquitous commerce as the commercial interaction among

providers, consumers, products, and services, enabled and supported especially by (the real-world)

seamless communication of each entity’s (digital) information. The seamless communication is

supported by the combination of autonomic identification technologies (e.g. RFID), (wireless)

communication technologies (e.g. Bluetooth), pointing services (e.g. GPS), and sensor network

technologies (e.g. Smart Dust).

Seamlessness and the subsequent integration of virtual space and physical space are the

fundamentally distinctive features of ubiquitous commerce in comparison to traditional commerce.

3

The term ‘Seamlessness’ refers to the continuous and uninterrupted information flow of products,

services, spaces and economic entities in commercial transaction processes. Seamlessness in

ubiquitous commerce is made possible by embedded digital information in every object. Such

embedded digital information saves end users the cost of transferring analog information into

digital one (e.g. typing), allowing the applicable information to flow seamlessly. In turn, such

uninterrupted exchange of information makes physical and virtual digital space integrated meaning

that all information in physical space commerce activities is exchanged without any interruption or

pause as it is in virtual digital space, thereby eliminating the gap between the two different spaces

[10].

1.1.2 Definition of Ubiquitous Media

Before the existence of ubiquitous environments, traditional media, such as newspapers, radio, TV

and Internet appealed only human cognitive and perceptual organisms such as brain, eyes and ears.

The producers of text, image, and video use their cognitive and perception processes and their

consumers also receive and interpret the messages using the same two kinds of processes.

However, the media in ubiquitous environment not only takes advantage of human biological

systems, but also the digital systems of human beings, while traditional media appeals only to

4

people’s bio-systems. Ubiquitous media is defined as media where a human creates and consumes

content through not only human cognitive and perceptual processes but also through the

interactions between surrounding digital systems such as mobile phone, PDA [13].

Ubiquitous media reduces information production. Although it is currently impossible to

automatically annotate content-related links to content in traditional media, ubiquitous media in

the automatic and systematic annotation of surrounding digital information into media files. This is

due to the improvement in wireless communication infrastructure, such as RFID and Bluetooth,

and the computing power of user devices. In addition, the automatic and systematic annotation of

information and links affects the reduction in commerce costs. It is possible to reduce the costs of

searching, sharing, advertising and advertisement effects assessment using the systematic and

serialized annotation functionality [10].

1.2 Research Issues and Organization

I will develop the new advertising system based on ‘ubiquitous commerce’ and ‘ubiquitous media’.

Especially, I will use mobile RFID application. Mobile RFID (Radio Frequency Identification) can

5

be defined as services that provide information on objects equipped with RFID tag over a

telecommunication network [26]. The reader is installed in a mobile device such as a mobile phone

or PDA. This approach is different from traditional implementations of ordinary RFID: Now the

readers are mobile and the tags are fixed, instead of other way around. Mobile RFID has some

major and obvious advantages over RFID: No wires to fixed readers are needed anymore and

several mobile readers are enough to cover a whole area, instead of dozens of fixed readers [3].

Most of models based on mobile RFID allow users to touch RFID tags on objects and they

can get the direct information linked to the tags. Recently, there have been researches on the new

models which connect RFID with commercial transactions [32] [8] [15] [16] [23] [2] [31].

In ‘mobile’ environment, advertising service providers can get accurate users’ demographic

information and accumulate information on individual users when they use the services, because

the ‘mobile’ has strength in ubiquity, convenience, connectivity, personalization and location

awareness [17]. In addition, using ‘RFID’ advertising service providers can offer services suitable

to the whereabouts and situation of users, reward the affiliates who contribute to the transactions

with or connections to the service providers after RFID tags are touched and provide extra services

related to the nature of tags.

Tag Match Advertising (TMA) is a new model which combines features of the mobile

6

RFID characteristics and content match advertising model on the Internet [11] [14]. TMA model

can be defined as “an advertising model, based on mobile RFID application, which offers the most

appropriate advertisement for users after the consideration of users’ demographic information, the

location and time when users touch a RFID tag and the content of the tag when users touch it”.

TMA model has two significant aspects. In mobile RFID environment, RFID tags are

attached to various products and places, which means users and objects with RFID tags can be

linked in real-time and the users will be able to receive information about the tagged objects easily.

What matter is: What is the information that users want? In most cases, mobile RFID tags have

offered to users only direct information about tagged objects. However, users touch RFID tags not

only to get the direct information linked to the tags but also the extra information related to the

tagged objects. Shortly, the core of TMA is in providing not only direct information but also extra

information and contents.

TMA originally started as a way to expose right next to the article in a newspaper or a

magazine and in a form of AdSense as in Google in a web environment. The reason for consistent

development of TMA is that the users who consume the contents are actually interested in the

related field of subject and by that, it is very effective to the expose. This is proven in the

successful AdSense case of Google. Google’s partner sites generated revenues, through AdSense

7

programs, of $ 1.66 billion, or 31% of total revenues, in the second quarter of 2008 [5].

The remainder of the thesis is organized as follows.

Chapter 2 provides scenarios, processes, participants and their benefits of TMA model. And

I propose issues, architecture and user interface of TMA model. Chapter 3 finds some conditions

for TMA model entities, such as TMA network-registered advertiser, Object Manager, Customer.

Chapter 4 evaluates the assumptions which TMA model is based on assessing the feasibility of

TMA. Chapter 5 provides a summary of this research work and its implications.

8

Chapter 2

Design of TMA Model

9

2.1 Scenario

Magretta [18] has shown an analogy to compare constructing a business model with building a

story. Just like there are characters, their personalities, and their roles in a story, there are

counterparts in a business model as well. This perspective can be applied to system development.

The scenario described in this research is an understanding of perspective from a customer to show

an exceptional use which was not realized before.

2.1.1 Product-based Scenario

Mary, a university student, recently bought a laptop and liked Jane’s laptop bag, Jane has the

same laptops model as Mary. Mary asked Jane about the price of the bag and where she bought it.

But she didn’t know as it was given to her as a gift. Then Mary found that a RFID tag named

≪Everything of Laptop≫ was attached to Jane’s laptop. She touched the tag with her mobile

phone with a RFID reader and her mobile phone showed detailed information about her laptop

and various related items. After that, the information is automatically stored in Mary’s Personal

Experience Management System; PEMS on a web. Mary could find the bag that she wanted to buy

in a shopping category named ‘Best 50 Laptop Bags for Women in 20s’ and she bought it through

10

her mobile phone.

2.1.2 Place-based Scenario

On Saturday afternoon, Ally visited art gallery with her boyfriend. On their way out from the art

gallery, at the entrance, they found ≪Remember Today≫ RFID tag. Ally touched the tag with

her mobile phone with a RFID reader and her mobile phone showed storing information about her

visiting and shop advertisements near the art gallery. After that, the information is automatically

stored in Ally’s PEMS on a web. Ally saw advertisement named ‘20% Discount, New Fall Items for

Woman’ including basic information of shop, discount coupon and map, etc. Ally downloaded a

20% discount coupon through her mobile phone, visited the shop using map and purchased the fall

item.

2.1.3 Product + Place-based Scenario

Sophia was scheduled to meet her friend in downtown. While she waits for her friend, she came

across poster of the movie she wanted to see. She decided to see the movie with her friend but

didn’t have information such as theater, time schedule about it. Then, she found a RFID tag named

≪For More Information≫ on a poster and touched the tag with her mobile phone with a RFID

11

reader. Her mobile phone showed her nearby theaters which showed the movie, the time schedules

of the movie, movie franchises including OST and informative advertisements such as restaurant

and sightseeing places near the theater. After that, the information is automatically stored in

Sophia’s PEMS on a web. Sophia bought tickets, made a reservation of a nearby restaurant and

downloaded a 10% discount coupon for the restaurant through her mobile phone.

2.2 Process of Operation

Mahadevan [19] defined a business model as a flow of participant’s value, flow of benefit, and

flow of products. Mahadevan’s perspective can applied to system development, too. Figure 1 is a

diagram of value, benefit and product based on the previous scenario.

12

2.2.1 Diagram

Object

(with RFID Tag)

Object Manager

① Touch

② Providing related URL

Tag Match Advertising

Network Company

③ Tag Information/Contents Request

Content Provider

④ Providing Tag Information/Contents

Advertiser

⑤ Tag Match Process

⑨-1 Division of Advertising Revenue

⑧ Advertising Expenditure (Enable Pre-Paid)

⑨-2 Division of Advertising Revenue

⑥ Providing Tag Information/Contents & Matched Advertisement

PEMS

⑦ Storing Tag Information/Contents & Matched Advertisement

③ Tag Information/Contents Request

Figure 1. TMA Model Process

First, RFID tag attached to object such as product and place is touched. Second, URL of tag-

related information and contents is provided to user. Third, RFID tag-related information and

contents is requested to content provider through TMA network company. Fourth, content provider

provides RFID tag-related information and contents to TMA network company. Fifth, TMA

network company enrolls appropriate for specific user through tag matching process which

analyzes user’s information and requested contents related to RFID tag. Sixth, TMA network

company provides RFID tag-related information, contents and matched advertisement to user.

Seventh, user stores RFIS tag-related information, contents and matched advertisement on a web

based PEMS. Eighth, advertiser pays advertising expenditure to TMA network company, but

13

prepayment is possible. Ninth, TMA network company distribute advertising revenue in object

manager and content provider.

2.2.2 Advertising Registration

In TMA model, advertiser can register advertisement by three kinds of methods. The first is

‘Direct Setting’ registration. In this method, the advertisers register keywords suitable for products

that the advertisers want to advertise in. This method applies to the product-based model where a

online seller of ‘laptop bags’ promotes its products by exposing advertisements to users when they

request information and contents by touching RFID tag on the laptop or the laptop bag. The second

is ‘Automated Setting’ registration and related advertisements are exposed to users automatically

after users’ information and tag-related information and content are analyzed. This method applies

to the place-based model where an offline owner of ‘clothing store’ promotes the place by

exposing advertisements to users when they request information and contents by touching RFID

tag on the gallery. Comparing with ‘Direct Setting’ registration method, the ‘Automated Setting’

registration method exposes advertisements to a user after making a comprehensive analysis about

the use’s demographic information, direct information of the tag and the time when the tag is

touched. The third is a hybrid of ‘Direct Setting’ and ‘Automated Setting’. In the third scenario

14

mentioned earlier, the advertiser who owns a restaurant would fine that ‘movie watchers are highly

likely to visit the restaurant’. Here, the owner select ‘movie’ as a keyword and ‘location of the

restaurant’ simultaneously which increases the effectiveness and efficiency of the advertising.

2.2.3 Knowledge as Marketing Message

In the diagram presented earlier, tag-related information and contents and matched advertisement

are stored on a web based PEMS. This process is to bring a shift to a marketing message and

advertisement. The ability for a common adult to memorize short term is as small as seven (±two)

information fragments (i.e. Chunk) which is called ‘the magic number’ [21] [22] [1] and this

ability of awareness has become a source of repetitive and stimulating marketing messages and

advertisements. However, in this research, since users are able to store and control information,

contents and advertisements that they would gain on a PEMS, marketing message and

advertisement dose not have to be repetitive and stimulating. Instead, it should be granting values

that can be continuously managed. That is, marketing message and advertisement in a mobile

RFID environment should be something of value through information or knowledge.

2.2.4 Advertising Expenditure

15

In TMA model, advertising expenditure can be on the basis of CPC (Cost Per Click) method that

advertisers pay for click on advertisements that attract users to click or CPA (Cost Per Action)

method that advertisers pay for each specified action (e.g. commercial transaction, subscription),

rather than CPM (Cost Per Mile) method that advertisers pay for exposure of advertisements to

users. Especially, though click fraud weakens the credibility of CPC method, TMA model can

track users more easily and reduce the possibility of click fraud and therefore the CPC method

could be more widely used. TMA model can encourage small advertisers to enter the advertising

market and will be a driving force of the expansion and promotion of the advertising market under

a mobile RFID environment.

2.3 Role and Potential Benefits of TMA Model Entity

Timmers [28] identified a business model as a ① structure of participant’s value flow and role of

each, ② potential benefit that participant may get, ③ source of benefit that business entity may

gain. If the scenario based on Magretta’s theory is an experience from a user perspective, analysis

of Timmers’ business model definition is an explanation from a business entities’ perspective. The

16

new system must apply to real business field. Therefore, analysis of role, value proposition and

potential benefit of TMA model entities is very important work.

Entities of TMA model can be divided into user, object manager, TMA network company,

content provider, advertiser. The role of business model entities and the value offered by them are

as follows: 1) user requests information and contents linked to RFID tags, consumes

advertisements, store tag-related information, contents and matched advertisements on a PEMS

and performs a role as potential consumer, 2) object manager attaches RFID tags on products and

places, decide whether insert TMA modules in RFID tags and can perform a role as content

provider about tag-related information and contents 3) TMA network company offers

infrastructure that makes TMA model available, establish a network where system entities can

participate, invites advertisers, provides matched advertisements to users through analyzing

information on users and information, contents requested by user and plays the role of ‘Value

Network Integrator’ who integrates and distributes values, which can be known by diagram of

TMA model where information, contents, advertisements and revenues flow centering round TMA

network company, 4) content provider provides tag-related direct information, contents and TMA

set-up page to TMA network company and 5) advertiser asks TMA network company to make

advertising and pay for the cost.

17

The potential benefits of entities are as follows: 1) user can cut search cost through the

informative advertisements, manage personal experiences through a PEMS, 2) object manager can

get financial incentives from advertising, strengthen service for customer, improve imagination

about RFID tag attached products and places, get CRM (Customer Relationship Management)

information and do CRM activities based on user database 3) TMA network company can enjoy

advertising revenues, get CRM information and do CRM activities based on user database, 4)

content provider can get financial incentives from advertising, get CRM information and do CRM

activities based on user database and 5) advertiser can secure a new advertising channel, perform

highly accurate targeted advertising and conduct automatic researches through statistics on the

activities of users.

Table 1 summarizes the role of business entity and the potential benefits.

18

Table 1. The Role, Value Proposition, and Potential Benefits of TMA Model Entity

Entity Role & Value Proposition Potential Benefits

User

Requesting for Information and

Contents linked to RFID Tag

Storing RFID Tag-related

Information, Contents and Matched

Advertisements on a PEMS

The Consumer of Advertisement

The Role of Potential Consumer

Cutting Costs of Search through

Informative Advertisement

Enabling Personal Experience

Management through a PEMS

Object Manager

Attaching RFID Tag on Objects

Registering RFID Tag Information in

Advertising Server

Financial Incentives for Advertising

Strengthening Service for Customer

Improving Imagination about RFID

Tag attached Products and Places

Getting CRM Information

Enabling CRM Activities based on

User Database

TMA

Network

Company

Building Infrastructure and Network

Inviting Advertiser

Providing Matched Advertisement to

User

The Role of ‘Value Network

Integrator’

Revenues for Advertising

Getting CRM Information

Enabling CRM Activities based on

User Database

Content Provider

Providing RFID Tag-related Direct

Information, Contents, TMA Set-up

Page

Financial Incentives for Advertising

Getting CRM Information

Enabling CRM Activities based on

User Database

Advertiser

Asking TMA Network Company for

Advertising

Paying Advertising Expenditure to

TMA Network Company

Securing New Advertising Channel

Performing Accurate Targeted

Advertising

Enabling Automatic Researches

based on Statistics of User Activity

19

2.4 TMA Architecture

UserInformation

RFID TagInformation

ComputingInformation

► Identify

► Profile

► Location

► Direct Information

► Location (not only as a geographical location but also as a high level information)

► Network Connectivity and Bandwidth

►Type of Wireless Device (e.g. Screen Size)

► Type of OS

Components of Analysis

AdvertisementInformation

AutomatedSetting

DirectSetting

Direct +Automated

Setting

Advertising Registration

Auction

Matching Process

Figure 2. TMA Architecture

Figure 2 depicts the architecture of TMA model. The structure of TMA model consists of

‘Analyzing’, ‘Decision Making’ and ‘Matching’. First of all, analyzing is about user’s situation.

When user touches the RFID tag, user information (e.g. gender, age, location), direct information

of the tag, exact attaching object of the tag, and information about the device user is holding is

analyzed [7]. Secondly, decision making is deciding the advertisement that is exposed. When

advertisers set up an advertisement in a way they want, auction based on a related ‘keyword’,

‘location’ begins so that the number of exposure and sequence of advertisement is set. At last,

20

matching is combination of the two former structures. Through this matching process, the actual

advertisement that will be delivered to users is decided.

2.5 TMA User Interface

1. Synopsis

2. Cast & Crew

3. Genres

4. Photo

5. Nearby Theater & Time Schedule

▷ Sale! OST

▷ Do you want his sunglasses?

▷ the Spice Club (Best of Korean Cuisine)

Direct Information

Matched Advertisement

the Spice Club (Best of Korean Cuisine)

User

the Spice Club

▷Restaurant Information

▷Discount Coupon

▷Reservation

Figure 3. TMA Graphical User Interface

Figure 3 presents a graphical user interface of TMA. The left side of Figure 3 is an example of

user’s device in the case of when the RFID tag on the movie poster is touched. The user’s device

shows the basic information about the movie (e.g. synopsis, cast & crew, genres, photo, nearby

theater & time schedule), movie-related products (e.g. OST, celebrity use items) and location

21

based advertisements (e.g. restaurant advertisement). Also, when the user takes a closer look at the

restaurant advertisement (the right side of Figure 3), the navigation map of a present location of

the user and that of the restaurant, coupon and reservation information are demonstrated. Similar

to the TMA model developed in this research, the exposure of unexpected advertisement is for the

‘Impulse Purchase’. Users are exposed to unexpected advertisements, which means a POP (Point

of Purchase) appears in front of them. In addition, downloadable coupons also promote sales of

products [12]. The effectiveness of TMA model can be inferred from the research by Totten &

Block [29] which found only price cuts increased sales by 15%, the combination of price cuts,

targeting advertising increased by 19% and the combination of price cuts, targeting advertising and

POP is made increased sales by 25%. According to the recent research by Gopal & Tripathi [6], in

terms of rate of response through mobile service, the closer the distance between the location of

receiving advertisement and the location of selling, the rate of response increases. Through this

result, the effectiveness of TMA model can be inferred.

22

Chapter 3

Working Condition for the TMA Model

23

Various participants exist in the TMA model proposed in this research. In particular, advertisers

would participate in the TMA model considering its effectiveness and efficiency comparing with

online advertising model. Consequently, chapter 3 studies the conditions with which advertisers

participate in the TMA model through comparing cost-revenue structure of advertisers who

participates in the TMA model and those who do not. However, it is presumed that the conditions

are studied on the assumption that advertisers are selling their products, as they can also perform

the advertising for activities such as recruiting members, and etc. Besides, I derive the factor that

attracts more entities to participate in TMA model through studying the participating conditions of

object manager and customer.

3.1 The Condition for the TMA Network-registered Advertiser

In this section, I try to find the working conditions for the TMA network-registered advertiser by

comparing the TMA network-registered advertiser with the TMA network-unregistered advertiser

who performs online advertising. The TMA network-registered advertiser should have profits

through the TMA system (Condition 1). And if the TMA network-registered advertiser and the

24

TMA network-unregistered advertiser sell the same product, the TMA network-registered

advertiser should have more profits than the TMA network-unregistered advertiser (Condition 2).

Table 2 summarizes the costs and profits of the two kinds of advertisers.

① Pricereg = The sales price of the TMA network-registered advertiser

② Priceunreg = The sales price of the online TMA network-unregistered advertiser

③ Quantityreg = The sales quantity of the TMA network-registered advertiser

④ Quantityunreg = The sales quantity of the online TMA network-unregistered advertiser

⑤ Costreg = The sales cost of the TMA network-registered advertiser reflecting the prime cost,

operating cost, delivery cost, etc.

⑥ Costunreg = The sales cost of the online TMA network-unregistered advertiser reflecting the

prime cost, operating cost, delivery cost, etc.

⑦ AEreg = An advertising expenditure of the TMA network-registered advertiser

⑧ AEunreg = An advertising expenditure of the online TMA network-unregistered advertiser

25

Table 2. Comparison Cost-Profits between Advertisers

TMA Network-registered

Advertiser

TMA Network-unregistered

Advertiser

Original Cost Costreg Costunreg

Cost after

Sales Costunreg + AEreg Costunreg + AEunreg

Profit (Pricereg´Quantityreg) – (Costunreg + AEreg) (Priceunreg´Quantityunreg)–

(Costunreg+AEunreg)

Profitreg = (Pricereg´Quantityreg) – (Costunreg + AEreg) > 0 (Condition 1)

(Pricereg´Quantityreg) – (Costunreg + AEreg) > (Priceunreg´Quantityunreg) – (Costunreg+AEunreg)

(Condition 2)

3.2 The Condition for the Object Manager

In this section, I try to find the working condition for the object manager. In order to participate in

TMA model, object manager should gain more profit comparing with his cost when enrolled in the

participation (Condition 3). At this time, the cost of object manager refers to the cost of the

provider of RFID tag, the registration fee of RFID in TMA network, and the cost for potential

26

danger when participating in TMA model.

① Costtag = The cost as the provider of RFID tag of object manager

② Costnet = The cost of TMA network registration fee of object manager

③ Costrisk = The cost for potential danger when object manager participates in TMA model

④ Benefitdir = The direct benefit when object manager participates in TMA model

⑤ Benefitindir = The indirect benefit when object manager participates in TMA model

Costtag + Costnet + Costrisk < Benefitdir + Benefitindir (Condition 3)

3.3 The Condition for the Customer

In this section, I try to find the working condition for the user. Users need to have a lower pay for

buying products through TMA network comparing with buying products through online

advertising network so as to participate in TMA business model (Condition 4). Besides, in the

situation that the advertisers who participate in TMA network have the same type of products with

27

those online advertisers, customers can choose by identifying the price of the product and select

the ones with lower sum of cost.

① Pricereg = The sales price of the TMA network-registered advertiser

② Priceunreg = The sales price of the online TMA network-unregistered advertiser

③ SCreg = The shopping cost incurred to the customer when (s)he purchases a product from the

TMA network-registered advertiser through the TMA network including delivery cost, seller

trust cost and search cost, etc.

④ SCunreg = The shopping cost incurred to the customer when (s)he purchases a product from the

online TMA network-unregistered advertiser through the online advertising including delivery

cost, seller trust cost and search cost, etc.

Pricereg + SCreg < Priceunreg + SCunreg (Condition 4)

28

Chapter 4

Analysis of TMA Model

29

4.1 Comparison with Content Match Advertising Model

The core principle of TMA model is based on content match advertising model. In this paragraph,

the analysis and comparison between content match advertising models developed in various

media forms will be made to derive characteristics of TMA model.

4.1.1 Variety Forms of Content Match Advertising Model

Many believe content match advertising model originated from the Internet. But the content match

advertising model existed for a long time. Advertisements next to newspaper and magazine articles

are also based on content match advertising model and can be called an early type of content

match advertising.

There are two types of content match advertising models which appear in the Internet. The

first one is to analyze context on the webpage and, based on the results, put advertisements

through to be related to contents of webpage, like Google’s AdSense, Overture’s Content MatchTM

and Daum’s CLIX do. The second one is to show advertisements though to be related to videos

provided by websites such as YouTube’s Video Advertising, Google’s Video Advertising and

Revver.com. Recently developed solution provided by Adap.tv matches products to videos by

30

analyzing videos through STT (Speech to Text) technology which translates speech into text and

scene change detection technology and inserts related-advertisements into videos automatically.

And VideoSense [20] stresses that advertisements should be inserted in the middle of video and

inserted advertisements should appear when the context of the video is highly related to the

advertisements. And the VideoSense also argues that advertisements should have more relations

with the situations appeared in the video rather than only with the text because users who prefer a

certain type of online music are likely to prefer advertisements which have similar editing style

and music tempo to the music video.

4.1.2 The Comparison between Content Match Advertising Model

Various types of content match advertising can be compared with each other based on 1) the

Expandability of Information, 2) the Matching Accuracy between Content and Advertisement, 3)

the Effectiveness of advertising and the possibility of advertising measurement and 4) the

Seamlessness between Offline and Online.

The Expandability of Information

‘The Expandability of Information’ is a criterion on how to secure extra information fast and easily

31

when consumers of advertisements want to get extra information as well as basic information

presented by advertisements. Content match advertising model adopted in newspaper and

magazine only gives basic information offered by information providers and it is hard for users to

get extra information. That means, content match advertising model based on newspaper and

magazine lacks the expandability of information. But content match advertising model adopted in

the Internet can link themselves to the information from other web pages through web searching

and hyperlink. That means, content match advertising model based on Internet secures the

expandability of information. In this sense, TMA model also secures the expandability as it can be

connected to the Internet.

The Matching Accuracy between Content and Advertisement

‘The Matching Accuracy between Content and Advertisement’ is a criterion which shows how

deeply the content and advertisement are related. Content match advertising model adopted in

newspaper and magazine, the matching accuracy between content and advertisement is very high

as advertisement are placed by people. But content match advertising model based on the Internet

has a possibility to cause errors in relationship analysis, because of the model analyzes the

relationship between content and advertisement using automatic computer system.

32

And TMA model have a high matching accuracy, because of advertisement is exposed to

consumers through considering various factors such as time, location, direct information of

touched RFID tag. In conclusion, the matching accuracy between content and advertisement is the

highest when people conduct the matching work. When the matching work is conducted by

computer and machines, the matching accuracy depends on the number of factors to be considered

including the information about consumer who watches advertisements.

The Effectiveness of Advertisement and The Possibility of Advertising Measurement

‘The Effectiveness of Advertisement’ and ‘The Possibility of Advertising Measurement’ are

criterions on how effectively content match advertising model conveyed to people and how easily

the possibility of advertising measurement are calculated. Effective conveyance of advertising

means making advertisement exposed to a certain range of consumers without showing

advertisement to consumers not included in the targeted audience [9]. Therefore, ‘effectiveness’

means how accurate the advertisement is to a certain range of consumers. The content match

advertising model adopted in newspaper and magazine is almost impossible to expose appropriate

advertisement only to targeted users. But people who have similar tastes are likely to choose

similar newspaper and magazine and therefore, newspaper and magazine advertising which target

33

consumer with similar tastes can be effective. And it is also hard to measure the effectives of

advertising in newspaper and magazine as there is little possibility to track where the activities

conducted through newspaper and magazine have originated.

The content match advertising model based on Internet can convey effective

advertisements, because of advertisements exposed to consumer are enrolled on the basis of

content consumed by users. Especially, content match advertising model based on video is

expected to be more effective than the model based on text as the former model have more aspects

to be considered. It is also possible to measure the effectiveness of advertising as a purchase linked

to advertising can be tracked.

TMA model can upgrade the effectiveness of advertising by providing targeted

advertisement to targeted people. Advertisements are exposed to consumers after TMA process,

considering demographic information on consumer, the time when RFID tag touched, the location

where RFID tag touched and direct information on touched RFID tag. This can be supported by a

study [4] which stresses that an effective advertising should start where the location and interest of

consumer meet. Measuring the effectiveness of advertising can be made as RFID tag gives the

information about where an activity of a consumer initiatives, which makes pricing model such as

CPC, CPA.

34

The Seamlessness between Offline and Online

As mentioned before, ubiquitous commerce can be defined as the commercial interaction among

providers, consumers, products, and services, enabled and supported especially by (the real-world)

seamless communication of each entity’s (digital) information [13]. Therefore, ‘The Seamlessness

between Offline and Online’ is a criterion on whether ubiquitous commerce is possible. Content

match advertising model conducted in newspaper and magazine is limited in pages. But TMA

model can make ubiquitous commerce available as it can connect offline and online environment

seamlessly through mobile RFID. But there should be a clear distinction between ‘the

seamlessness between offline and online environment’ and ‘the possibility whether the advertising

can lead to commercial transaction’. Given the possibility of commercial transactions, content

match advertising model adopted by newspaper and magazine has little possibility to make

commercial transaction right after users watch the advertisement. But Internet-based content match

advertising model and TMA model are conducted on the assumption that commercial transaction

should be made after users watch the advertisements. That means, in the case of Internet-based

content match advertising model, ‘the seamlessness between offline and online environment’ is not

secured though ‘the possibility whether the ads can lead to commercial transactions’ exists.

35

Meanwhile the true meaning of ‘ubiquitous’ should be considered. ‘World Wide Web’ was

revolutionary by linking objects with each other. And being ubiquitous is also revolutionary by

linking real-time objects with each other and real-time objects and online objects. Therefore, the

true nature of being ubiquitous lines in connecting things and objects, rather than smartness

individual things.

4.2 Assumption Evaluation of TMA Model

In this paper, I suggested a scenario and diagram, user interface and architecture. However, this is

based on a several conditions so if not, the model itself can may as well be hardly applied to real

business field. Therefore, in this chapter, I evaluate the assumptions which TMA system is based

on assessing the feasibility of TMA.

Shin [27] proposed the assumption evaluation methodology. The term ‘assumption’ is a

hypothesis that is taken for granted in a system. In case of any kinds of problem occurs on any of

this assumptions, it can be solved as taking alter into a plan but there even can be a give up

situation. Thus, on the step of suggesting a system, the evaluation of a system based on an

36

assumption is indirectly assessing the feasibility. Also, this can be a meaningful procedure of pre-

examining the problems for actual situation.

TMA model demonstrated in this paper is on the basis of following assumptions.

First, the price of RFID tag will be less than 10 cents each.

In a scenario mentioned before, the RFID tag is attached to a movie poster. That is, RFID tag id

regarded as a waste so the price is assumed to be decreasing until it reaches below 10 cents.

Presently, the mobile RFID tag used in about one dollar and this is very likely to be reduced. If not,

there is an alternative such as Bluetooth or color barcode instead of RFID. In terms of

infrastructure, construction of the RFID infrastructure can be thought to be delegated to

governmental agency, not private companies.

Second, RFID tag will be attached to all products.

As mentioned in a scenario, TMA model can be applied to all kinds of products since the core

value of TMA model is to exposure advertisement through matching user information and tag

information. This has a lot to do with advertiser’s participation because if RFID tag is attached

37

only to the specific field of products, that would be a less advertisements resulting in a difficulty of

attracting more advertisers.

Third, most of the people will be using mobile phone with RFID reader module.

The TMA model is suggesting scenario through mobile phone with RFID reader module inside.

Yet, if separate RFID reader module (e.g. Dongle) has to be attached every time to mobile phone,

the usage rate would be very low because of the inconvenience. Consequently, the TMA model to

be realized, mobile phone with RFID reader module should be spread out. But, only when RFID

tag is touched in a specific space with an enough time (e.g. exhibition space), using separate and

external RFID reader module would be applicable.

Fourth, providing the direct information related to RFID tag will offer value to

users.

Users touch RFID tag when users have curiosity toward the product. For that reason, the direct

information provided to users is to offer a great value in a quantity as well as quality.

Fifth, related advertisements provided altogether with direct information will supply

38

value.

Advertisement that is displayed to users by TMA will be able to suggest incentive such as decrease

in searching expenses through informational advertisement. In a reality, the reason for a user to

touch a RFID tag is mostly to gain additional information related to direct information rather than

direct information itself. As can be seen in the scenario, users take additional information like

timetable more seriously compared to the direct information.

Sixth, users will not be bothered by product purchasing or signing up by the mobile

phone.

When e-Commerce was first embodied, users often felt uncomfortable with the security. This may

happen in case of commerce based on mobile phone and for this, we need to promote especially in

a ubiquitous environment, even affirmative action from government will be needed.

Seventh, users will not be feel aversion toward information being stored on the web

based PEMS.

One of the core values proposed in this research, is the information achieved through touching

RFID tag is stored on a personally set PEMS. This is called ‘Life-log’, some of the users may be

39

irritated by the lack of privacy. This is why we need to ask users explicitly whether users want to

store it on the web.

Eighth, advertising expenditure using TMA model will be less than that of

traditional ones.

Formerly, most restaurants used flyers as a measure of advertising. But it did not appeal much to

customers and the advertising effect could not even be measured. On the other hand, adapting CPC

or CPA, TMA model enabled advertisers to spend rational advertising expenditure, and moreover

to assess the advertising effect. Therefore, the TMA advertising expenditure is less than the

tradition advertising expenditure, the possibility of TMA model participation is very high.

Ninth, users will not feel burdened with data traffic costs.

One of the things we need to consider during the process of attracting users into the TMA model is

data traffic costs. Nevertheless, the TMA model suggests paying data traffic costs through

advertiser, not user. This is applicable as well as to the fact that various services provided on a web

for free even if it was not free of charge at the first time.

40

Tenth, TMA model will bring a benefit to all of the business entities.

In order for the TMA model to bring a success, participating entities should all be granted

advantages. TMA model generates following incentives in a table 1 proposed before.

41

Chapter 5

Conclusion

42

5.1 Summary and Contribution

Ranganathan & Campbell [24] suggested seven requirements for effective advertising under the

ubiquitous environment: 1) Reaching the right people with the right advertisement, 2) Delivering

advertisement at the right time, 3) Delivering advertisement in the best way, 4) Serendipitous

advertising, 5) Providing a means for users to follow up on the advertisement, 6) How should

advertising revenue be collected in a pervasive environment?, 7) Privacy and Security.

TMA model can expose proper advertisements to users through ‘Tag Match’, a new

process based on the information on users and the information and contents about RFID tag. When

‘Tag Match’ process is conducted, the time when users touch RFID tags is included in the criteria

for the analysis, which enables advertisements to be conveyed at the right time. TMA model can

secure the interactivity and feedbacks between the advertiser and the users through mobile devices

and the users can store and access to the information given to them, which enables users to track

advertisements offered to them. TMA is the model that can consider activities and the location

where the users are located can be found through users’ mobile devices and touched RFID tags and

behavioral intention of users can be found through the information about touched RFID tag.

43

5.2 Limitations and Future Work

This research is a kind of exploratory research. Exploratory research is a type of research

conducted because a certain problem has not been clearly defined. And exploratory research is

often used to test the concepts before they are practiced in the market. In concept testing, a

consumer will be provided with a written concept and prototype for a new or revised product,

service or strategy. These researches have a limitation of exploratory research; it is not certain if

these models will realize in real world. Therefore, in the future work, I will demonstrate the TMA

model, and will prove the ‘effectiveness’ and ‘efficiency’ of TMA model.

44

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49

Acknowledgement

‘ 자공학’이라는 새 운 학 하고, 어느덧 2 이라는 시간이 습니다. 어찌

보면 짧 시간이지만 그 동안 노 에 한 작 결실 맺게 니 감회가 새롭습

니다.

어 운 상황 속에 졸업 할 있도 도 주신 지도 님께 진심

감사를 드립니다. 또한 본 논 심사 원이신 재학 님, 장

님께도 감사를 드립니다.

인하 학 공학 학원이라는 공간에 만나 새 운 인연 맺게 우원식님, 구

님, 님, 진님, 임병주님께 감사 드리며, 앞 도 이 소 한 인연 이어

나갈 있게 를 진심 원합니다.

가 가야 할 알 주신 이경 님께 마 속 이 리 여 감사 드립니다.

그리고 학 동 자인 재 님, 병 님, 이종철 님, 주 인, 이 ,

아름, 과 자신 목 를 해 지 이 시간에도 노 하고 있 진 님, 채

경희 님, 일 님, 경 님, 승 님, 장 경, , 이동언, 손 , 진

추이, 이신복, 후걸, 권 , 태에게 학운이 함께 하 를 진심 원합니다.

자신 히 걸어가고 있는 나 듬직한 구들 종 , 민 , 지용, 이동

과 나 사랑하는 동생들 주리, 아에게 진 앞날이 펼쳐지 를 진심

원합니다.

마지막 못난 자식 해 고생하시는 아버님, 어 님께 죄송스럽고, 감사한 마

이 논 신 하고자 합니다.

이 는 다시 새 운 계 들어가 고 합니다.

“I am CEO of My Life.”

2009 맞이하는 새해 새벽에

50

Curriculum Vitae

Name: Jungho Jun

Date of Birth: February 14, 1981

Place of Birth: Seoul, Korea

Education

M. Eng. Candidate in Electronic Engineering

INHA University

2007. 3 – Present

Ph. D. Candidate in Business Administration

Kyung Hee University

2007. 3 – Present

M. B. A. in Management Consulting

Kyung Hee University

2004. 9 – 2007. 2

B. S. in Law

Kyung Hee University

1999. 3 – 2004. 8

Experience

2006. 11 – Present Researcher of the Ubiquitous Autonomic Computing and Network Project,

the Ministry of Knowledge Economy 21st Century Frontier R&D Program

in Korea