Scanbuy, JagTag, and other U.S. companies are trying to harness the potential of bar codes to deliver ads and information to cell-phone users
Bar codes are getting hip. For decades, retailers and manufacturers have used these patterns of black dots, lines, and squares to encode pricing and other data onto products and supplies. Now, bar codes are gaining currency as an easy way for cell-phone users to view ads, coupons, and other information instantly. The Weather Channel is using bar codes to deliver maps, forecasts, and severe weather alerts. Universal Pictures is using mobile bar codes to promote its coming thriller Repo Men. Later this month, a Hearst magazine will use the technology to provide additional information to readers. And mobile bar code technology in various forms has recently been used by search engine owner Google (GOOG), Web portal Yahoo! (YHOO), sportswear maker Nike (NKE), and packaged foods maker Frito-Lay. In Japan, advertisers for years have used bar code technology on magazines, posters, products, tourist sites, and business cards to deliver information wirelessly. But the features can be glitchy or cumbersome and haven't taken off in the U.S. Microsoft (MSFT) and a handful of startups including Scanbuy and JagTag are trying to turn the tide. On Feb. 2, Motorola (MOT) was among a group of investors that made an undisclosed investment in Scanbuy. Bar code tech "makes the world [around us] clickable," says Marja Koopman, a marketing leader at Microsoft. Lately, bar code scanning is being more widely used in part due to the broader adoption of Web-enabled smartphones and prevalence of cameras, now in about 90% of cell phones. Special Software or Just the Camera
In the case of the Weather Channel, viewers hold their cell phones up to the TV screen to scan a bar code displayed at various points throughout the day. The feature, which works with handsets including the Motorola Droid and Google's Nexus One, downloads one of the Weather Channel's mobile apps. Since the TV promotion began, downloads have increased about 15% to 20% a day, says Cameron Clayton, a vice-president at the Weather Channel. "We are excited about the potential," he says. Some mobile bar code tech requires special software. To use Scanbuy's technology, users download a scanning app and then wave the camera over a bar code. The phone then automatically accesses the desired information. The March issue of Esquire magazine, due to hit newsstands Feb. 16, will feature Scanbuy bar codes in a section on 25 items every well-dressed man must own. Once a reader scans a code, the screen will call up fashion tips, such as what to wear with a particular pair of shoes. "We are trying to take the print magazine and just make it a little bit more useful," says Richard Dorment, features editor at Esquire. JagTag's code, by contrast, works with any camera phone and doesn't require additional software. The user snaps a picture of the code and then sends it via multimedia message (MMS) or e-mail to JagTag, which quickly sends back the desired data.
To promote Repo Men, Universal Pictures embedded bar codes from startup Occipital in 30,000 posters in cities including New York and Los Angeles on Feb. 1. When scanned with an Apple (AAPL) iPhone, the codes prompt the phone to run a short video ad promoting the film. Consumers can also use Occipital software to scan bar codes of products in retail stores to get prices on the same items from comparison-shopping sites like TheFind.com. Major Hurdles
Companies hoping to use the technology widely face big hurdles. Different codes sometimes require different types of software. For instance, Scanbuy's software can't read Microsoft bar codes. "The problem is, [the market] has been fragmented, and it's not well executed," says Neil Strother, practice director at consultant ABI Research. Phones without autofocus cameras may not be able to read certain codes. To research the technology, Forrester Research (FORR) analyst Julie Ask scanned a promotion created by JagTag for the upcoming Sports Illustrated swimsuit issue, due on newsstands Feb. 9. But she did not receive any photos back via multimedia message, as promised. JagTag blames congestion on AT&T's (T) network. "We are seeing no issues" with multimedia messaging, AT&T spokesman Mark Siegel says. "Tens of thousands" of cell-phone users have successfully downloaded the content every week since the campaign began running in January, says Dudley Fitzpatrick, CEO of JagTag. Scanbuy is trying to work out kinks. On Feb. 4, Scanbuy unveiled a way for phones to read bar codes and receive content without downloading any software. Last year, Sony Ericsson began preloading Scanbuy's software on its phones in various markets outside the U.S. Sprint Nextel (S), the third-largest U.S. wireless carrier, last year started preloading the software onto select phones, such as the Samsung Reclaim. "When we talked to a lot of agencies and brands, mobile bar codes have been something they've been interested in," says Kevin McGinnis, a director at Sprint.