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Betting on Bar Codes
Will the smart money back experimental technology?
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One doesn’t have to look very far to find creative applications for 2D bar codes.

Having piqued the interest of progressive marketers, bar codes have been employed on a slew of fashion magazines, advertisements, and on products in retail stores. There’s good reason for this early interest. If used well, 2D bar codes are an inexpensive way for organizations to interact with consumers on the go. Using their mobile devices, consumers can photograph these carefully placed codes and find—via the Web—additional product information, coupons, and mobile tickets.

Already, well-known brands such as Dr Pepper, Dominos, Ford, Kraft, and Sprint have foraged ahead with 2D campaigns using Microsoft Tags. (Other types of 2D bar codes include Aztec, Bee Tag, DataMatrix, Ezcode, QuickMark, and QR code, according to Forrester Research.) There’s “a monumental increase in companies that are willing to go out on a limb and do experiments with the existing media they have in print,” says Dave Lawson, director of mobile engagement at Knotice, a direct digital marketing vendor.

In October 2009, Get Married became the first bridal magazine to use Microsoft Tags. Parent Getting Married Media takes a tri-media approach to its customers: a TV show, a Web site, and a print publication. To appeal to brides on the go, Get Married began placing Tags next to selected editorial content and advertisements to connect its readers to digital entertainment, information, and services within the magazine.

Considering that most brides are busy planning the big day, Get Married has used Tags to create quick, convenient ways to learn more about brands that its readers already love. Tags within Get Married also can be saved to view at a later time or shared with friends.

Using Tags fits in well with Getting Married Media’s multifaceted strategy.  “Get Married magazine’s promise to reinterpret the rules starts with the publication itself, and integrating Tag changes the way brides read a magazine, gather inspirations, and connect with advertisers,” says Stacie Francombe, president and founder.

Similarly, PAGINE SI!, an Italian yellow pages, also sought ways to connect print with digital content. Established in 1996, PAGINE SI! began publishing print and Internet-based phone directories while offering multimedia services.

According to Microsoft Tags, Italy is home to more mobile phones than people (about 1.5 per person). Perhaps that is why Italians have become so familiar with 2D bar codes. Paolo Cellini, vice president of strategy and new media at PAGINE SI!, says, “[In Italy] you can buy airline tickets with QR codes or see them in popular news and sports magazines. With the growth of the mobile smartphone market and low-cost mobile Internet access plans, I thought this was the right moment to introduce Tags to our market.”

While PAGINE SI! cannot provide any hard numbers for return on investment, Cellini notes that “Tag is changing the perception of the company—through the ability to offer new value-added services and new ideas about what advertising could be—so that innovation in print is possible. It is like building a bridge between something that can remain stable and something that can change every day.”

2D bar codes also have introduced a new tracking component to marketing, because the ability to identify where a customer has seen your code (whether in Lucky or Glamour, Seventeen or Self magazine) is powerful. Because customers agree to share their location information when scanning a tag, 2D bar codes offer another way to assess the engagement of an audience.

Lawson, once a district manager for The Wave Magazine based in Silicon Valley, says that a “huge issue” for many print publications is often whether the ads are working. Many marketers are already taking advantage of what 2D bar codes offer by assigning a unique URL to each publication in which their ad is featured. Julie Ask, vice president and principal analyst at Forrester Research, echoes that observation: “Scanning a bar code is proof that I have engaged with this ad.”

Lawson suggests that these early adopters of scanning be studied to gain a richer understanding of how placement could be more effective. “It’s incumbent upon the brand and agency partners to get to know why someone would be doing the scan and then to  develop an experience beyond the scan that augments the context in which they scan,” Lawson advises.

When considering what has prompted this enthusiasm for bar codes in the West, many respond that the increasing accessibility to smartphones has left consumers open to the experience. But Lawson says that the reception of bar codes by print publications also has greatly contributed.

“There is the recognition factor because [2D bar codes] are getting press in a lot of print publications.... They are realizing it’s not that expensive, and, as they are growing their mobile consciousness, they have a destination that they can drive people to. They have things they can drive people to from a 2D tag,” Lawson says. 

Regardless of marketers’ intentions, Laura Marriot, CEO of NeoMedia, a developer of 2D bar code solutions, says that the customer benefits most from using 2D bar codes. Through mobile connectivity, consumers can get a fuller, richer multimedia experience that can offer them everything from discounts to warranty information to nutritional facts. It’s up to the brand to promote this experience as desirable.

Overcoming Obstacles

For many marketing departments, 2D bar code dollars make up just a slim slice of the mobile pie. Companies may not be allocating a lot of funds for 2D because the medium is considered experimental by marketers and analysts alike with slow user adoption.

Marriot maintains that the industry is too new to gauge accurately its size and scope. “For this mobile media packet, there is no market forecast...actual numbers just don’t exist yet,” she says.

However, Forrester Research’s Ask attempts to uncover the market’s size and potential for growth in her research report, “2D Codes: Learn Why There is No Urgency.” In it, she writes that only 1 percent of U.S. mobile phone customers had used a bar code scanner as of late fall 2010, with only a 5 percent adoption rate among smartphone users. So far, that 1 percent consists of young adult males (Generation X and Y) with high incomes, according to Ask.

Based on this low market penetration, Ask writes in the report, “It would be hard for any product or service company to claim an urgent need to implement 2D bar codes.” She adds that the reception to 2D bar codes “is not overwhelmingly positive yet. People are experimenting.”

For those who are adventurous, there are some caveats. So far, the universal pain point with bar code software is consumer education: Persuading consumers to download the application to their phones, take notice of the bar code, and understand the benefits has proved to be difficult.

Marriot maintains that consumers need to be educated and suggests that phones come preinstalled with bar code software. She also recommends adding instructions next to bar codes on advertisements, explaining to customers how they work and why they should want this additional experience with a brand. “It’s always that first interaction. If we can make the first interaction valuable to them, [consumers] can continue to use it,” Marriot says.

In “2D Bar Codes—A Definitive Guide,” NeoMedia writes that “dead links” can dissuade the customer from using bar codes beyond the first experience. “Consumers will be deterred from using mobile codes if they initially have an unsatisfactory experience. So-called ‘dead links’, in which scanning a mobile code does not return any information or the wrong information, can be damaging, not only to a given campaign, but to the adoption of mobile code marketing in general.”

NeoMedia advocates the frequent testing of these mobile codes in a variety of mobile code applications with different camera-equipped mobile devices to ensure the functionality of all combinations. All content that is linked via a mobile code should also be optimized for presentation.

Lawson expresses the same sentiment about educating the consumer but insists that the customer must be guided through the experience to appreciate all of the benefits. Lawson, however, stresses the importance of a human-to-human interaction rather than instructions; he notes that’s where hospitality businesses have the most to gain from implementing 2D bar codes.

“The discoverability of [2D bar codes]—that’s something that I have found that has accelerated in more of the retail and customer-facing businesses: banks, retail, hospitality,” Lawson observes. “They actually have human beings who can bring this to the attention of the customers and guide them through the experience. I’ve found that to be a big accelerator in recognizing and understanding what that experience can be.”

Lawson supports that claim by recalling the initial implementation of 2D bar codes with Canon, one of Knotice’s clients. In working with Canon’s field marketing team, Lawson and his colleagues demonstrated how to create a bar code and what the experience would be with customers. “In that, we were able to get some survey data back: 94 percent of 900 people responded with ‘This is cool’ or ‘This is awesome,’ ” Lawson says.

The initial confusion factor of 2D bar codes is not limited to customers either, as Lawson says that “there are barriers” with Knotice’s clients. Some executives have never scanned a bar code and, therefore, assume that no one else has either. He adds that, in his experience, he hasn’t found this resistance to be specific to any industry but, rather, “company culture.” Some businesses really are not willing to push the envelope with digital experiences.

Other logistical problems make 2D bar codes a gamble, too, as smartphones—which account for only 20 percent of the phones on the market—are capable of downloading the applications needed to perform a scan, Lawson says. “You have some reach consideration,” Lawson reflects. “How many people, how many eyeballs can I get in front of?”

Considering that everything about 2D bar codes comes down to customer pull and interest, concrns surrounding privacy aren’t as applicable to this mobile media element as they have been to others in the past, according to Marriot. Although a consumer’s location is instantly known by using a scan, Marriot says that at NeoMedia, consumers are not obligated to share other information. Age and sex can be entered at the consumer’s discretion, but NeoMedia reports on the number of scans, not a particular person or device.

“From a privacy perspective, the way the analytics are provided are not assigned to specific individuals,” Marriot affirms.

Already people have high hopes for the future of 2D bar codes. “A lot of vendors are hoping that [2D bar codes] will take off so that they can sell some analytics packages that can go with this,” Ask says.

But should bar codes escalate to what vendors and customers expect, the question remains whether they will eventually give way to visual search applications, such as Google Goggles.

Being able simply to photograph a Coke can, for example, and get information would bypass the need to scan a bar code. Ask says that she believes bar codes eventually will become visual search but that a lot about customer behavior must change beforehand. The consumer has yet to get accustomed to the concept of photographing something to get more information about a product.

Lawson points to more complicated technical factors, such as capturing all of those images and housing them, but does, nevertheless, see visual search in the future. “2D bar codes still have a long way to trend upwards and will work in collaboration or in concert with visual search,” Lawson concludes.



Editorial Assistant Koa Beck can be reached at kbeck@destinationCRM.com.

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