QR Codes Are Ready For Programmatic, Says Scanbuy's Mike Wehrs

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scanbuyDo people really want to scan that little black-and-white pattern better known as a QR code?

Mike Wehrs, CEO of QR code marketing tech company Scanbuy, doesn’t give any ground, saying QR codes are here to stay and a new partnership with AT&T helps prove it.

Wehrs told AdExchanger this week, “We have distribution and partnership agreements with Verizon, Sprint and now AT&T.  The AT&T relationship, specifically, is for any of their internal uses. They use our code platform system to generate any of their identifiers and to put it on their collateral material, their phone boxes, their POS displays, whatever it is that they want to do.”  But does the consumer want to use it?

Wehrs discussed his company and QR code trends with AdExchanger recently.

AdExchanger: Looking at the QR Code model itself, has it evolved at all? And are you starting to see a change in traction, or is it still a slog?

MIKE WEHRS: There has been a significant change. I put this in line with every other major technology innovation that has happened in the world. I can put this in terms of comparing to the Web, for example. In the beginning, what did people do with the Web? They put up basically “brochureware” – in other words, they just put up a website and then they wondered why they received no interaction.

Next, when people learned how to use the medium, you saw significant changes.  At first, there was basic interactivity. And then there was tracking capability and targeting. And then you get as advanced as we are today.

The same thing is happening with the QR space. Two years ago, it was the “coolest thing” because it actually worked. Every brand thought it was cool to put a QR Code on packaging and in every advertisement; I’d call these days similar to the “brochureware” days of the Internet. There was little relevance. It was not a mobilized experience. It didn’t have a call to action.

All these things were wrong. Scanbuy has addressed that. There have been some very high-profile campaigns from us. But the real insight we had was this is not just about a product information tool or a website redirect. This is about knowing at the earliest possible point in a purchase decision when someone has expressed an interest or a desire in a particular category or a product.  And then, [how do marketers] use that information to give a more relevant experience, such that the person buys something sooner?

That is really where our company is positioned.

So the QR Code is a top-of-funnel tactic?

Yes. That is where it starts, and because the content can change, it is also the last point in the process. We are also highly relevant at the final point of influence on the purchase. Seventy thousand times a day in the US alone, we know that someone is in-store and has picked up a product. They may drop it in the shopping cart. So the QR code is top-of-the-funnel, but it is also at the very, very bottom of the funnel.

Seventy thousand sounds like a big number. On the other hand, thinking about trying to drive scale for brands, that might be perceived as a small number. How do you respond?

The only numbers that I can present are ours, and we are the largest commercial player in this space, but we’re still only between 5 and 10% of the market. You are really dealing with over 700,000 [scans] a day, and that starts to get people’s attention. Admittedly, my numbers are statistically accurate, but I am not 100% sure of the market.

Do you see trends with your technology that relate to showrooming?

It’s one of our biggest value propositions. On the QR sides of things, we are a friend of brands and a friend of retailers because they are the ones  saying, “I want you to come into my store and buy,” or once you are in the store, “Here is more information so you don’t have to wait for a salesperson.” The code gives you more information.

On the UPC side of things, which is where people generally get into this worry of showrooming, we also offer a service there that is brand- and retailer-friendly.

We have done deals where people get a short version of a video when you scan the back of Cheetos. That is a far more engaging thing than someone saying, “If you drive around the corner, I can save you five cents.”

So ScanBuy is the company, but what is ScanLife?

ScanLife is a product and service suite that deals with mobilized engagement at both the application level for end-consumers, as well as for the B2B customers who are actually using the platform to create these codes and identifiers.

However, there is also a data side of our business, which is what do we do with all the data that we now know. That certainly isn’t something that we market as ScanLife, but we do have customers that subscribe to data from us. It is aggregated and anonymized, but we get an enormous amount of data-related information.

Can you see a connection being made between QR codes and programmatic media either now or in the future?

Absolutely. It is a massive opportunity for the ad networks to start leveraging some of the data that we have.  For example, today we use something we call Smart Codes – it’s a simple, one-variable thing. We may do a campaign with a coffee store chain where, if you found a bag of coffee in a store that you wanted to buy, there is a code on it that you can scan. If it’s before noon and because I know this person has scanned in this store before, I may automatically give them an offer that says if you order a cup of coffee while you are waiting in line, I will give you 10% off. If it’s after lunch, I may give them 50 cents off a pastry. I have over 40 variables that I can look at every time someone scans something.

As it relates to programmatic advertising, there are levels of specificity that can be provided and would inform how you want to target that ad, such as whether this person is really in-market for a general awareness-type ad, a call-to-action ad, a discount that causes them to buy now, a customer loyalty promotion. I could give you all the data you need to make that ad far, far more effective.

Can you take this QR Code data and link it to cross-channel strategies?  Can you create some addressability across channels? 

Yes. I will give you an example of how we do it online, or at least one of the examples. A major computer manufacturer marketer does the usual thing and places a banner ad promoting their laptop computer on a website.  Normally, [you can] click on the ad for more information.  By incorporating what’s called a “dial code” in the banner ad, if the code is scanned, it causes your phone to dial a phone number of choice – such as the computer manufacturer’s call center – but it doesn’t just go to the main switchboard. Via the dial code, we know exactly which ad they are looking at, so now it’s routed directly to someone that can say, “I understand you have a model, blah blah blah, on the screen right now. How can I help configure it for your needs?”

It’s not about clicks. You end up with the transition from online to mobile to direct sales, and you haven’t had to type a thing. You just had to take your phone out of your pocket.

In mobile advertising, there are challenges around targeting because of the use of cookies and restrictions due to consumer privacy. Along those lines, is there any roadblock for Scanbuy in the type of marketing that you are enabling?

We have looked carefully at how we save data and what data we save. It is clearly exposed in the EULA (End User License Agreement) when someone downloads our app. The data that we keep is anonymized and aggregated so that the individual is never exposed.

But within our own systems, we do have the information to be able to communicate back to that person if they say, “Put this on a price watch for me,” or, “This is a favorite. Anytime that there is any news about this product, I would like a news feed.” And so on. We have to have some return path capability like an email address or phone number. But we don’t make that available to others.

I do believe that personal privacy will be an increasingly important topic, especially if one or two [bad actors] do something really bad. Right now no one has done anything exceptionally bad with the data, but the first company or two that actually shows what’s possible – and there are really bad players –  is going to bring  on a firestorm. We have to be very, very careful. As a leader in our own space, we can be in control of own behavior, and educate – which reflects my own commitment to the industry.

This is probably a question you hear often. I feel like QR Codes would work better if you could just aim at an ad and not even think about that little black and white code. Do we get to this point someday? 

It’s a fair question, and yes, I do get it pretty frequently. There are a couple of answers. Can your example happen? Yes. It just is not going to happen overnight because scanning is a massive change to user behavior. Right now, people see the code and that’s when scanability is still high. The second that you cross over a line, where the code is less visible, scanability drops to the floor. The engagement component becomes a problem.

We have had some customers that send it to their creative departments, so they will try and customize the heck out of the code. We advise them against going that far because we know that as soon as they run the ad, they are going to come back to us and say, “We didn’t get any scans at all.”  To which I say, “No news there.  It’s like you hid it.  What did you expect to happen?”

I agree, the black-and-white blotchy thing stuck on there is a visual distraction, and it is not in line with the color or the theme of the ad or the overall feel, and it is disruptive. At the same time, it is also imminently notable that it’s there. Therefore, you get the highest amount of people who scan it. It really depends on what you are trying to drive. That is the stage we are at, right now.

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