They look like remnants of an alien visitation. If you've travelled through Europe lately, you may have seen them in a train station next to the printed schedules, or on a magazine ad, and wondered what they're all about. They're big in Japan. Here in Canada, they're starting to creep onto billboards and into newspapers and art installations. And while they're not going to wipe out our civilization like an army of angry Martians, some optimistic marketers are calling them killer apps.
They're called 2D (two-dimensional) barcodes, or sometimes QR, for "quick response," which is probably the most apt description because one of their clear benefits is speed.
Here's how they work: Consumers download to their smart phones a free piece of software known as a code reader. Taking a picture of the computer-generated smudges with the phone automatically directs their browser to a specific part of an advertiser's mobile website.
"[Web]navigation on your mobile device is difficult," says Jonathan Bulkeley, the chief executive officer of Scanbuy, one of the companies behind the technology. "Consumers are generally lazy, and they want to take the easiest path.
"With the seamless nature of this, with one click you can be there in a couple of seconds."
Last month, as part of a campaign for its Stella Artois Légère brand, Labatt took out print ads and placed a handful of billboards in downtown locations inviting beer drinkers to gain "insider access" to its sponsorship of film festivals in Toronto and Vancouver. The ads featured a QR code directing mobile users to a special Web page for the promotion.
"I think there was a bit of intrigue," said Adam Luck, a director of interactive at Grip Limited, which developed the campaign for Labatt. "You don't necessarily know what it is."
The entire campaign, adds Matthew Ramella, the manager of media, sponsorship and digital marketing at Labatt, was an attempt to build on the notion of Stella Artois as a beer for insiders. "The QR code is a bit more exclusive and not mass or mainstream."
Certainly not: Mr. Ramella said fewer than 1,000 users clicked through the QR code to its mobile site. Still, Labatt deemed the experiment a success because the company would build on what it had learned for future campaigns.
The technology can be applied in any retail or advertising environment. Financial institutions are looking at the barcodes as a way of offering consumers information in a paperless and dynamic form. Customers walking into a retail bank might scan a barcode on a display to find out that day's mortgage or savings rates, or learn more about insurance products.
Last year, the U.S. company StoreXperience rolled out pilot projects with retailers including Target and Best Buy, installing barcodes adjacent to store shelves that consumers scanned to learn more information about the products than could be placed on a display. Customers who participated were rewarded with discounts.
In a Case Western University pilot project, students scanned barcodes placed around campus to earn bookstore discounts and gain fast access to such ever-changing information as estimated arrival times for bus shuttles.
In a pilot project overseen by the software company Scanbuy, Sears placed codes next to 500 hardware items in stores so that customers could instantly learn detailed information about the products. Typing in the individual Web addresses for each item on the Sears mobile site - some of which extended to 30 or 40 characters - would have caused all but the most enthusiastic technophile to give up in frustration.
"In the Internet space, every time you have to click on something, you typically lose about 10 per cent of the people," says Dave Robinson, the vice-president of new business planning at Rogers Wireless. "On a mobile phone, every time you have to click on something and move down a menu and go down another page, it's at least that high. The beauty of a barcode is it elevates whatever it is that could in theory be driven from some sub-sub-sub menu closer to the top."
In Japan, fount of many new technologies, QR codes are strengthening their hold on consumers' consciousness. Last spring, Coca-Cola launched a promotion in which thirsty Japanese could scan a code in an ad and then bring their phone to a vending machine to be rewarded with a free bottled tea.
The biggest obstacle to the technology going mainstream is getting wireless carriers to preload the code-reading software on cellphones, but more are coming on board. All three major wireless carriers in Spain are including Scanlife, the code reader developed by Scanbuy. The company is also operating in Denmark, Italy, Chile, Mexico, the U.S. and Canada, where its barcodes are seen in the National Post and the free commuter daily Metro. Other operators are spreading the codes and readers through Latin America.
Codes were created as a way for wireless companies to boost use of data by their customers, before most carriers rolled out flat data plans. (Canada is one woeful exception in the global flat data plan trend.) Now, the money changing hands flows from advertisers to companies like Scanbuy, which earn a fee with every click on a QR code.
Meanwhile, Scanbuy says it is gathering vast amounts of information on consumers that can prove valuable to marketers. It asks users to volunteer their gender, age, income, and postal code; about 20 per cent reportedly opt in. "There's much more data than you can get from an Internet interaction" says Scanbuy's Mr. Bulkeley. "Here, you can measure all your media: how many scans, who's scanning, and where. It's very powerful."
In the United States, Sprint is bundling the Scanbuy code reader on two new Samsung handsets, the Exclaim and the Reclaim. And Samsung Canada says it is ready to preload the application on its phones should any carrier request the software.
Still, the Canadian wireless carriers are not convinced, and no amount of success in Japan is likely to change that. "I would always temper my enthusiasm around something that scales in Japan, because there are lots of examples of applications that are massively accepted in Japan that are accepted here, but just not on the same scale," says Mr. Robinson of Rogers. "They have a different mindset around adopting new technologies as we have here."
For the moment, the North American numbers are, indeed, small. Scanlife says it has only about 1,000 unique users a day across the continent, but that is up from only about 100 six months ago. And about 1,400 companies, ranging from a surf shop in California to Volkswagen, have signed up.
Mr. Ramella of Labatt says this is just the beginning.
"I would expect mobile to be at the top of our list as we head into 2010."