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Leveraging QR codes

Mobile marketing has become an essential component of the overall direct marketing experience as more consumers adopt smartphones and tablets. As the technology has evolved, run-of-the-mill mobile marketing practices such as SMS and push notifications have given way to more sophisticated practices such as quick response, or QR, codes and location-based services (LBS).

A recent comScore report showed that of the nearly 98 million U.S. smartphone users — which represents 42% of all U.S. mobile users — one in five scanned a QR code in December 2011. LBS marketing is also projected to increase to $6 billion by 2015, according to a 2010 Borrell Associates report. This includes laptops, tablets and GPS, in addition to mobile phones. A Berg Insight report, released January 2012, had a lower prediction of LBS marketing revenue in North America at $710 million by 2016. LBS was defined as location-based apps and ads.

Hence, the opportunities for marketers are many, but a well-conceived strategy is crucial.

Location is key

QR codes are cropping up on just about everything, from magazines to packaging, from billboards to moving vehicles, the bikini bottoms of Britain’s female Olympic volleyball team to tombstones in Germany.

Some placements obviously work better than others. “I’ve never understood why codes would be placed in TV ads,” says Chia Chen, SVP of digital at Digitas. By the time a consumer opens the app needed to scan the code, the commercial is probably over, he explains. Codes on moving vehicles are another head scratcher.

Proximity to codes plays an important role in their success. Chen says codes should be within arms’ reach and big enough to register easily. While codes placed on subway ads seem like a good idea, the size of the code may not be big enough to scan unless the person is sitting directly by the poster. The same goes for codes on billboards — people will be too far away.

Additionally, a person sitting next to an ad on the subway might be underground and not have an Internet connection. The same goes for codes placed in airline magazines.

Still, Chen says codes in magazines have been the most successful placements.

“When we talk to publishers doing this, they’re saying they’re getting hundreds of thousands of people snapping codes because consumers are able to hold the magazine close enough to see it,” Chen says.

Last year, Digitas worked on the Eclipse ad campaign for Jenn-Air, a high-end kitchen appliances company, for the March/April edition of Architectural Digest. Brian Maynard, Jenn-Air‘s director of marketing, says the four-page magazine spread featured a 3-by-3-inch die-cut piece of an oven that invited consumers to remove it, stand in front—but several feet away — of their current ovens and hold the die cut to block or “eclipse” their oven so they could instantly see what the Jenn-Air appliance would look like in their kitchen.

The cutout had a QR code on the back where buyers could snap to learn more about the product.

“People still read magazines — especially in this segment,” Maynard says. “The trick is to drive them to go online and go to the retailer.” Maynard says the percentage of people interacting with the ad was greater than a typical ad in Architectural Digest.

The campaign was further enhanced by creating a mobile app with similar functionality, allowing people to take a photo of their kitchen and insert a Jenn-Air image of an appliance. Maynard says consumers have started to have fun with the app by taking photos of their friends lifting “heavy appliances,” and the appliance manufacturer is considering inviting people to share the photos on Jenn-Air’s Facebook page to further keep consumers engaged.

Chen says clients are using location to get a sense of what consumers are doing, to see if there is a moment relevant to a brand and to see how marketers can engage consumers in those moments.

Location-based marketing also offers more opportunities to target consumers based on exactly where they are. In marketing a new high-end thermometer to savvy moms and expecting mothers, Sarah Van Heirseele, VP of digital at Blue Chip Marketing, says from

January through March this year the firm targeted women based on geography, weather and proximity to a three-mile radius of a retailer that sold the product. Also, the mobile ad was only launched if the flu levels in specified locations were high or severe.

Van Heirseele says consumer clickthroughs were four times higher than expected.

“I think the women embraced the customization,” Van Heirseele says. “We’ve all been burned by the past and how bad banner ads were. But as targeting gets better, consumers will appreciate it more.”

Providing relevant information

Marketers say one of the most important aspects of using QR codes is that the content they provide should be relevant, informative and offer something different than what is immediately available to consumers.

One of the most common mistakes companies make is to simply have the QR code direct users back to a company website.

“You shouldn’t have a QR code just to have one,” says Kate Coultas, senior manager of corporate communications at JCPenney Co. Inc. “You have to make sure it’s connecting to relevant information. And if it’s local, then it should be affecting the local.”

For example, last summer the QR codes in the Manhattan JCPenney store offered shoppers a list of fun events happening in the city throughout the summer.

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Orlando Veras, a Macy’s media relations manager, says Macy’s learned that customers saw the store as a resource to learn about new trends. Knowing that, Macy’s codes, termed “backstage passes,” featured videos of designers discussing the latest trends, how  to wear particular clothing or giving make up tips. One code featured Martha Stewart talking about which cookery gear to buy for specific meals.

Macy’s first began using QR codes when it introduced eight in February 2011. Veras says Macy’s now has 18 codes, which also include other product segments.

“[QR codes] were quite successful for us and we learned that we needed to create more of them and expand into other [departments] like home and beauty,” Veras explains.

Joe Torpey, marketing communications manager at Jaguar North America, says the company uses QR codes at auto shows so consumers can learn more about a particular car or sign up for more information.

“We’re also looking at ways to leverage QR codes at the point-of-sale to increase access to critical information when customers encounter our vehicles in the showrooms,” Torpey says.

For example, if a consumer is looking up grocery stores, marketers can send shoppers coupons for specific products. That kind of real value provided on the spot and in the moment is important. Joe Chasse, director of media and analytics at digital advertising agency Modea, says marketers need to go beyond simply offering badges to consumers for checking into locations using services such as Foursquare and Shopkick and provide real offers, such as discounts, that are immediately relevant.

Chasse says he has checked into places only to get messages saying he will get a discount the next time he visits. “I can see the rationale behind that, but that’s a huge missed opportunity,” he says.

Enhancing the shopping experience

QR codes should also make the shopping experience easier for consumers, rather than more complicated or time consuming.

During the back-to-school season, Coultas says shoppers who scanned a JCPenney QR code got a dorm room checklist to ensure shoppers purchased everything they needed in one visit.

“JCPenney already had a checklist online, but we were keeping it separate. We thought, ‘Why not make it easier and provide it in the store?’” Coultas asks.

The department store has also offered instant coupons or more information on particular products through the codes. In addition to placing them on signage throughout the stores, Coultas says the codes are also placed in JCPenney’s catalog to offer more information about the products.

“QR codes will continue to play an important role as we try to merge the online and offline experiences,” Coultas explains.

KIDzOUT is an iPhone app that uses the device’s native navigation capabilities to show parents diaper deck locations, family-friendly restaurants or the nearest emergency room, among other children-related needs. Seth Heine, president of KIDzOUT, says the company uses QR codes to lead people to the iTunes app store so users can download the app.

“Currently, it isn’t as easy to search for the app on iTunes, but the QR code takes you directly to the destination. We found a clean way to get people to the ultimate place they want to go,” Heine says.

Heine says initially two QR codes were built. The second code took users to their Facebook page, but the company realized it did not want people to go to the Facebook page on their first experience because you cannot download the app from there, he says.

Similarly, Mandar Shinde, AOL‘s senior director of mobile monetization, says AOL also uses QR codes to send users straight to the website where they can download apps leveraging location for AOL products, such as Moviefone.

“We found QR codes were still the preferred way of downloading apps,” Shinde says. Modea’s Chasse says retailers face staffing challenges. The days of having salespeople that really know the products well are gone, he says.

“Manufacturers have a difficult time making sure they have salespeople available to speak with consumers when they are making their buying decisions,” Chasse says. “At least consumers can use their mobiles to get information about the products and supplement the store experience where companies don’t have sales people available, or if the sales people don’t know a lot about the product they’re selling.”

Likewise, Jenn-Air’s Maynard says because their appliances are big purchases, the company found consumers spent about eight months researching items before making a purchase.

“It’s not an impulse purchase, like packaged goods,” Maynard says. “The important thing is to get them information, and this includes retail information.”

Providing useful, accurate and the most up-to-date product information, as well as company location, especially becomes critical at the all important point-of-purchase. Marketers cannot afford to miss an opportunity in these areas.

Challenges remain

It is tempting to want to develop a QR code for everything, though the risk is redundant information and straining resources.

Blue Chip Marketing’s Van Heirseele says while QR codes are free, the budget needed to build the different landing pages (i.e., a sweepstakes), produce the content (i.e, videos) and the time needed to maintain the sites, remain a big challenge.

Heine agrees, “Every time you create a code, you then have the obligation to support and keep it relevant.”

Marketers also have to think about the entire user experience — taking into consideration factors such as placement, context and location—when thinking about using QR codes and location-based efforts. Digitas’ Chen says the goal of the technologies is to provide additional information and extend engagement so consumers go deeper with a brand. However, marketers must pick their moments. For example, encouraging consumers to snap codes while driving is not the best time to engage them with a brand.

“One of the reasons why magazines work well is because consumers are in that browsing, leisure time,” Chen says. [Snapping a code] is not a giant or different behavior to take in that moment.”

An important challenge is that some consumers do not know what a QR code is or how to activate them. Additionally, brands do not always clearly communicate what consumers will get if they snap a code and whether the content will be valuable. Therefore, marketers have to be clear and upfront on the ad or signage itself about what consumers can expect.

To educate customers, both JCPenney and Macy’s created YouTube videos explaining how to interact with the codes. They also offered incentives for snapping codes or signing in through LBS partners, like Foursquare or Shopkick.

Macy’s shoppers were also entered into shopping spree sweepstakes when they snapped codes, and offered Shopkick’s participants special offers and discounts if they signed in.

Sometimes the problem is as simple as the technology not working properly. For instance, GPS maps don’t always provide the correct user location. And, having LBS on your phone drains the battery more quickly, so consumers are reluctant to use it all the time.

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Similarly, while smartphones in other parts of the world, like Asia, automatically have QR code scanners built in, U.S. phones do not, so users first have to download one of several apps. Additionally, users have to exit out of whatever program they are currently in on their phones, locate the scanning app and wait for it to load before they can snap a code. This may further dissuade users from snapping codes because it may be too much of a hassle for them.

“The app download is a barrier in itself,” Van Heirseele says.

Digitas’s Chen believes it is the responsibility of the hardware and software manufacturers to improve upon the technologies.

Furthermore, Brian McClary, social and emerging media analyst at the Ford Motor Co., says Ford used LBS with Foursquare during a car show to reward the first 20 people who signed in with a poster. However, they experienced a connectivity issue because there were too many people using the same signal, preventing people from checking in. McClary says they remedied the situation by allowing people to check in through Twitter.

All these things combined make up the user experience. Several marketers caution if the initial experience is bad, users are less likely to give the technology a second chance. Therefore, all marketers have a responsibility to make the QR code and LBS a good experience each and every time, especially the first time.

Make or break year

While some marketers anticipate using LBS technology more and in more creative ways, QR codes may be a harder sell going forward. The codes have been around for a few years, and new technologies are quickly emerging that will be direct competitors.

“This is the make or break year for QR codes,” Van Heirseele says. “Retailers are asking for them and we will supply them, but if we don’t see people adapting to them and interacting with them, something else will come along to take their place.”

Chen, who also believes QR codes may only be around for another 12 to 18 months, says image recognition is getting better, to the point that users will be able to snap a photo of the product itself and search for more information that way, rather than having to use a QR code.

Also, as people begin to expect companies to have mobile-optimized browsers, Chen says they will also get more accustomed to typing URLs into their mobile browsers, which could make QR codes less relevant.

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