NeoMedia has a cute phrase: 'yes, we scan'. But how much 2D barcode scanning is the public actually doing? We asked NeoMedia's CEO for the big picture...
Mobile barcode technology is everywhere. On soft drinks cans, magazine ads, billboards, flyers.
But is it in the minds of consumers? You know, civilian consumers rather than geeks like us?
Next time you see a 2D barcode in the wild, ask a fellow shopper what it is. Good luck getting a coherent answer.
After many many years, consumer ignorance of mobile barcodes remains stubbornly high. Oh, there's no doubt huge progress has been made in terms of industry acceptance. In the US especially, brands and advertisers are all over 2D barcodes.
And it's easy to see why. Now that mobile penetration is 100 per cent in all but the most emerging of emerging markets, marketers want a channel through which they can pull consumers into their sites when they're out and about.
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Without question, the barcode offers the most frictionless option here – a zero click alternative to sending a text to a short code or typing in a URL.
Merely training your camera on a code and waiting to be transferred to a landing site? What could be simpler?
Well, that's the theory. In practice, the 2D barcode habit is yet to catch on with the punters. And it's the usual depressing mixture of fragmentation, incompatibility and crappy user experience that's to blame.
The fundamental problem is that you have to have a barcode scanner loaded on to their phone before you can scan a barcode. Not many phones come pre-loaded with them (most Nokias used to, but even then you could never find where it was buried in the menu – 'office' if you looked hard enough), so you have to download them from app stores.
Apparently there are 28 offered in iTunes alone at the moment.
Then, of course, you can't guarantee your scanner will read every barcode because some – from big hitters like Microsoft – are proprietary.
Can the tech ever realise its unquestionable potential?
NeoMedia thinks so. It's one of the longest-established firms in the space, and actually owns many of the patents associated with the tech.
We asked Laura Marriott, CEO of NeoMedia, to elaborate...
First, can you tell us about the multitude of different formats in the 2D barcode space?
There are three open formats – QR codes, Data Matrix and Aztec. These all use open technology and can be read by the same reader. They can also read the old 1D barcodes. Then there are the proprietary codes like Microsoft Tag, JagTag and BeeTagg.
Why do we need three open codes? Isn't that just unnecessary confusion?
There are efforts to unify them, which the GS1 is leading. But I agree, it's not ideal.
How many codes are out there 'in the wild'?
Over 2bn QR codes – a lot in Japan and Korea. And Microsoft says it has 2m, but the big question is how many of those are being scanned.
Why would a brand choose to go with a closed barcode vendor and potentially lock out so many users?
Well, Microsoft for example is a big company with a big reputation and there are lots of marketers out there who will work with them because of that. But some are changing. Sports Illustrated is an example of a brand that recently switched to open codes.
I should stress though that, for me, the big competition is between direct and what we call managed/direct or partial/direct codes.
Can you explain the difference?
Direct codes merely take the user to a destination and therefore there's a limit to what you can do with that information, if you're a brand, other than count how many visitors you have received.
Indirect encoding links the target information to a unique identifier and sends it to our back end, which then decides what to do with it. You can get much deeper metrics from this. You can find out when and where the consumer is, and give every code its own identifier so you can see which one is performing best.
Who are the major players in open 2D barcodes?
The four biggest are ourselves, 3G Vision, ScanBuy and 3G Vision. But there are lots more.
What's the business model for you and your competitors?
We give away the scanning apps, but charge businesses for the creation and distribution of codes, then offer management fees based on reporting and CRM. Our customers have included Kodak, Volkswagon, BBC, Mazda. There are dozens of them.
But no operators, who must be a little concerned at their SMS shortcode revenues...
Some of our licensees do have deals with operators - MobileTag with AT&T, ScanBuy with Verizon. Operators have an important role to play, especially in education.
You and your competitors are clearly doing a decent job of getting codes out there. But you must acknowledge the consumer indifference to 2D codes...
I think we all know there's serious work to be done. We need more education at the point of sale. Codes need a clear and consistent explanation of what they are and how you can read them every time they're printed. We also need to get scanners on more devices. You only need a phone with a 1.2 megapixel camera to run a scanner. Ours works with 700 phones. But the app stores are where all the downloads are coming from, and we need to look beyond smartphones.
So where's all the cross-industry action coming from? It seems to have gone off the agenda at the MMA.
I agree that 2D codes are not top of radar for the MMA, and the GSMA is less involved these days. The GS1 and OMA are working hard, but it would be great if we could really get the MMA and the IAB working on this. Another problem is metrics. I'd love to see the analyst community aggregate numbers so we can really get a picture of the progress we're making.
Speaking of which, you guys have just reported a 1800 annual rise in campaigns. But you don't say what the start point was!
We don't disclose it for competitive reasons.
So aren't you just contributing to the lack of data out there?
We have shareholder obligations, but I take your point and that's why I'd love to see an independent and anonymised aggregation of everybody's numbers so we can truly reflect the progress we're making.
Looking ahead, do you see augmented reality and NFC cannibalising 2D codes?
No, I don't. There's a cost issue to put NFC-enabled tags in your ads or on your shelves. You just can't compare them with 2D codes. And image recognition type tech is limited because it can't do the deep linking I talked about earlier.
So you're confident 2D barcodes are really taking off?
I am. We can see the growth happening among big brands, so the challenge is to convince the second tier and also the enterprise. And we're working on various improvements to the codes, so that they can link to social networks for example. The long term goal is to make 2D codes replace the URL.
