Are QR Codes Good For Local Marketing? A Contrarian View

Quite a few marketers have raved about QR codes as the best thing since sliced bread. Small-to-medium local businesses wonder if they should jump on the bandwagon as well, but is there enough substance to justify the buzz? Consider this contrarian view before deciding if you should.

With new and emerging technologies, it can be challenging to identify whether integrating them will produce a good-versus-bad ROI. With some experimental interactive marketing ideas, the “law of diminishing returns” eventually kicks in, meaning you expend progressively more time and effort for lower and lower returns.

If the tactic you’re considering has an extremely nebulous potential return, it might not justify any time spent on it at all. QR codes may fit into this category.

Reasons To Nay-Say QR Codes

They are not a substantial improvement over URLs. At its most basic level, a QR code is a method for communicating and storing a very precise ID to be associated with some thing, such as a product, an advertisement, a business, or an individual. In this respect, it works very similarly to a URL. (They can also store plain text, but most of their best business functions seem to be in the role of ID/product-numbers or URLs.)

For instance, if you saw an ad in a newspaper or magazine that looked interesting to you, you could scan it with your mobile phone, and the app on your phone would translate the graphic code into a URL which you could save or have it launch straight into a browser window on your phone.

While this theoretically could save you from having to manually type in a URL you read off the ad, it’s not necessarily all that much faster (I’ve watched people pulling up the app, getting close enough to the QR code, aligning to snap a pic, etc.). If one frequently wanted to visit URLs found when reading newspapers or magazines, this small time savings could drive one to install and use the app.

But, I’d venture to say that most people reading print media are not in a mode to take notes or go look up websites all that frequently while in the midst of that activity — I think those moments are more sporadic. And, when a consumer reaches that point, it’s not difficult to type in a URL, which incidentally might be easy to remember, too.

Some of the main uses for QR codes where local business marketing is concerned has been the practice of placing QR code decals on storefront windows or in print ads, and the matrix codes are linked-to the company’s website URL. This was pushed by Google Places, and many small businesses got the decals and placed them on their windows in a nearly knee-jerk reaction based on the assumption that if Google thought it was good, then it must be. Or, perhaps it might give them some sort of advantage in Google rankings.

There’s no reason to think that QR codes help in local search rankings on Google or elsewhere. Many marketers are desperate to push against any perceived lever there may be in making the needle move in Google rankings, so quite a number of people fell in line and posted the matrix code graphics on their store entrances. But it likely did nothing for rankings. In fact, there’s reason to believe that messing with your site URL structure to make better QR codes may de-optimize it for search.

Rhetoric around QR technology has been suspiciously hype-laden

The online marketing community’s enthusiasm around QR codes has made it sound compelling and the excitement that all of us have around clever tech is catching. But, there needs to be a good reason to use it or else it won’t have a natural place in consumer ecology.

The short life-cycle arc of the CueCat indicates this could be an evolutionary dead end

The CueCat was the product of a flashy startup during the dot-com era which allowed people to scan in small barcodes which could be later uploaded on computer to sync up with URLs.

A CueCat Scanner used technology similar to QR codes.

I remember when I was called in by the print side of my old yellow pages company to integrate CueCat code with our website for a brief, thankfully-abortive time period. I was so horrified when I realized what it was and how far in bed the print product manager had gotten with the Digital Convergence company that produced the CueCat.

It was so patently obvious that it was a nearly-pointless novelty item that I could not see there being sufficient consumer adoption of the technology to justify the amount of yellow pages ad print space to allow for the barcodes.

So, it was no surprise to me within a mere year or so when I was called upon to vet Digital Convergence’s technology for consideration of being acquired as the company was about to go bankrupt — and I had no hesitation in killing off the proposed buyout based upon technical incompatibility with our server environment and assessment of the CueCat’s complete lack of sufficient consumer adoption.

It’s still horrifying to me how eager some unsophisticated companies were to associate themselves with technology they understood poorly, and how much money they lost from investing in the technological dead-end.

Debbie Barham of the Evening Standard described the basic failure best when she said, “[the CueCat] fails to solve a problem which never existed.” And, that unfortunately seems to describe QR codes, too.

Slight inconveniences with products can amount to huge barriers for adoption

With QR codes, there are a few different inconveniences: you must download and install the app(s) on your phone. You must scan the codes. You must FIND code to scan and be near enough to capture it.

Could it be easier to use? Well, imagine if your cell phone had an app which allowed you to snap a photo of a URL, and then it might automatically launch your browser window with the URL. This isn’t far outside of our current technology.

There must be a compelling incentive for consumers to adopt it

If it doesn’t quite speed up some interation enough, then it needs some sort of premium to bribe users into getting involved.

Google dropped support for QR in Places

After initially pushing intensively to get SMBs to adopt them and use them as decals at their places of business, Google dropped QR code support. If this had been working for local consumers, Google wouldn’t have abruptly halted it. This is a significant indicator that it has yet to hit critical mass.

The vast majority of average consumers haven’t a clue what it is!

Poll the men-on-the-street in your area and see how many of them know what a QR code is and have a QR app installed on their cellphones!

As a unique identifier for people, businesses, things — it likely will not have a long lifespan

For businesses, apps becoming more adept at identifying/linking based upon ubiquitous geolocations, for instance. And, what about RF IDs (a.k.a. “NFC” – “Near Field Communication”)?

Nanotech devices with embedded RF ID detection could offer seemless ID detection and invisibly bridge the gap to connecting with online/virtual info. (There is speculation that Google dropped QR code from Places in order to replace it with NFC-enabled decals.)

URLs have wider recognition and might be preferable to using QR codes in print ads

Unlike QR codes, a URL doesn’t require locating an app, downloading it, installing it, and using it to snap a pic of a code graphic. For consumers who don’t have smartphones or have yet to download the appropriate app, a URL (including conveniently shortened URLs) will work better.

Multiple, warring code protocols result in some consumer confusion

The fact that there are multiple QR flavors may necessitate loading multiple apps to read different codes for different purposes. A consumer who feels unsure of which app to use for a code will tend to avoid participating. A service which requires a degree in Internet technology to use it is a service destined for failure.

Reasons To Believe In QR Codes

It’s easy to find reasons to nay-say QR code. However, it has gained some number of devotees and some growth of users. It would be simplistic to ignore that the technology has a few reasons to believe in it and consider that it might become sufficiently robust to gain traction. Here are a few of the reasons which I think have some merit.

It is an evolutionary step up from the CueCat

QR Codes only require smartphones for the device, compared to the specialized CueCat scanners — so, it is founded on a device which many consumers already have. While this is an adaptive advantage, it’s also insufficient in my view, because I didn’t believe the specialized device was the main flaw of CueCats in the first place — it was their lack of compelling reason to be used.

Still, this incarnation has the advantage of a slightly lower barrier-to-entry, and each incremental advantage helps bring the concept closer to the tipping point where it might finally reach critical mass.

QR code might manage to achieve a necessary degree of cool factor

Just one clever PR stunt could help propel it from the digiterati/early-adopters over into popular culture. There have been quite a few different companies, organizations and individuals which have done something innovative with QR in order to get some publicity buzz.

For example, a few days ago Ballantines whisky company got a tattoo artist to ink a QR code onto a friend which was linked to an animated version of the tattoo illustration:

[youtube]https://www.youtube.com/watch?v=f3qv2dSXQXk[/youtube]

Yet, this is more of a novelty than something which will bring QR tech over the top. Few people have access to the tattooed guy to scan in his matrix and get the animation to launch, so there’s no incentive for people to download the app and play along. For a stunt like this to really convert the non-QR-enabled, it needs to involve a more popular subject and it’s got to get a lot of people interested in making the scan themselves.

There is still some time yet before omnipresent ID technologies catch on and become standard

NFC or some nanotech ID handshake may be just around the corner, but they haven’t arrived. Until then, there may be some useful applications for QR protocol.

Google’s purchase of Punchd indicates it may still have plans for QR where local is concerned

Punchd is a service that has a built-in incentive that can drive consumers to seek out the special QR app, download, install and use — frequently. Mashing up a loyalty program which users can engage with via cellphone makes for a compelling raison d’etre.

Innovative QR code use indicates that the tech could be one small leap away from becoming really useful

A South Korean grocery store, a Homeplus company, figured out that providing busy shoppers with a virtual store in subway stations where they are a captive audience might be solid gold, and enabling the shopping cart functionality by having consumers scan QR codes for each product they wish to purchase is actually a brilliant application.

Now, if someone comes up with an equally compelling application here in North America, you could see QR codes really enter the mass consciousness in a big way.

[youtube]https://www.youtube.com/watch?v=fGaVFRzTTP4[/youtube]

Conclusions

QR codes have yet to achieve sufficiently widespread awareness in popular culture. Their usage  could still grow at a rapid rate as some have cited, but their penetration is still insufficient to justify time spent on integration for most small, local businesses. But, don’t ask me — ask a small, representative sample of your usual customers and see how many of them know about it.

If you’re a small business, consider first if you’re in a tech-savvy industry where your customers will commonly know what this is and use it, or if you’re in a highly tech-aware location, such as Seattle or Silicon Valley. If you fall into these segments, you may fall within a narrow exception case category and this could be worthwhile for you to experiment with (particularly offering Punchd loyalty discounts).

Additional innovative applications like the South Korean grocery use could happen in the North American market, but until that happens this still may not have reached the necessary tipping point to be worthwhile.

Some future innovative stunt like the QR tattoo might manage to tempt large numbers of consumers into trying out the technology, helping it to jump past the tipping-point.

For larger companies with sufficient resources to spend, a QR integration could be used as a speculative experiment similar to the Ballantines company’s tattoo gimmick, and they still might get some publicity/buzz value out of it even if it doesn’t evolve into a more worthwhile medium.

But, for the majority of small, local businesses, this is a speculative curiosity which simply doesn’t yet merit any expense of time/resources to mess with. As such, for most of these businesses any time spent playing with this will translate immediately into lost money.

However, stay tuned on the QR code topic where local interactive marketing is concerned!

Where I could’ve predicted the rapid death of CueCat, the story isn’t completely over for QR yet, and it might yet climb its way up over the tipping-point and make it into a sustainable position in the marketplace here.

It will need something to help propel it further, though — some increase in the ineffable “coolness” factor such as a Lady Gaga full-body QR code tattoo, or virtual shopping malls in subway stations — but, it might still happen.