This week I wrap up some of the most interesting interviews in my career. It’s been over a month of collecting facts, figures and vision from 25+ mobile executives and luminaries, in-depth information that will be the foundation of the Netsize Guide 2009, which I am writing as we speak.
Is convergence the end-game? Will mobile advertising foot the bill for mobile content and apps? What is the real value of location? How can companies remain relevant to their customers? Are mobile operators -well- outdated? These are just a few of the questions I have the freedom to explore in the guide with the full support of George Yaryura, Netsize Strategic Marketing Manager. Our goal: To co-create a highly accessible and valuable publication for mobile professionals and practitioners. I must keep the keep the details of these interviews confidential until the Netsize Guide is formally released at Mobile World Congress. But I can share my take of the megatrends that matter and the industry developments that merit a closer look.
Top of my list is mobile barcodes. A surprising number of companies up and down the value chain – from agencies to operators – have told me they plan to sharpen their focus on 2D barcode schemes that are built from the ground up to enable new forms of commerce and link the virtual and physical worlds.
Today’s announcement by Publicis Groupe – which sealed a partnership with Mobile Discovery, a platform provider focussed on joining up offline, online and mobile campaigns with the help of barcodes, mobile search and image recognition technologies – is a welcome confirmation of the pivotal importance of barcodes. (Kudos to both MobiAdNews and Mobile Marketer, sites that have consistently and expertly documented this nascent market. If you follow this trend, then I recommend you read their coverage.)
From in-store displays to outdoor billboards, the end-game is about creating a digital return path that consumers can act on using their mobile phones. Whether the goal is to encourage the all-important impulse buy or simply boost brand interaction, expect to see a flurry of activity as more companies step up to embrace these technologies.
This is good news for companies (including Scanbuy, NeoMedia, NextCode, Mobile Data Systems (MDS), Mobile Discovery, JagTag, i-Nigma, UpCode, ShotCode and 3GVision – not in any particular order) that provide the readers, symbologies and the back-end infrastructure to make this happen – as well as the brands, agencies and visual search companies (such as SnapNow) that got on the bandwagon early.
But with the excitement about the business objectives we can achieve using barcodes comes the concern that we may have inadvertently taken steps that will stunt market growth and shrink the pie for all the players involved.
I’m thinking here of the recent white paper on the topic of cameraphone based barcode scanning produced by the CTIA Wireless Code Scan Action Team. The white paper was created to accelerate the widespread usage of barcode scanning (using camerphone capabilities) in the U.S. and set a foundation that “encourages innovation and continual evolution of interoperable solutions through a wide range of participants.”
To this end the CTIA white paper endorses two formats: the open ISO standard Data Matrix (DM) and EZ Code, a proprietary code created by Scanbuy, a leading provider of mobile marketing solutions based around barcodes whose carrier clients include Sonofon, TDC and Sprint.
However, if the key is interoperability and defining a balanced ecosystem that will allow barcodes to (finally!) flourish in the U.S., then why has the CTIA white paper effectively tipped the scales in favor of a proprietary symbology by mandating that a code reader application (the application that scans the 2D barcode and actually decodes the alphanumeric data string that is encoded into a 2D barcode) include support for EZ Code?
EZ Code, though used by carriers and advertisers in a number of campaigns which I outline in this column, is nonetheless a proprietary format, with no clear licensing path for developers. In fact, it’s not entirely clear what the business model is. Purposely calling a proprietary solution a winner before the race is run – as this white paper effectively has – is hardly the way to jumpstart a robust, balanced and all-inclusive business ecosystem. What’s more, it flies in the face of the OMA (Open Mobile Alliance), which clearly states that proprietary codes can not be mandated.
So, the CTIA white paper declares all member carriers will support, at a minimum, DM and EZ Code. Is there a level playing field? Not a chance.
It’s an unfortunate outcome that Colin Gibbs, a sharp reporter at RCR Wireless whose work I highly respect, hints at in his recent post. Scanbuy has suddenly become the 800-pound gorilla and every body else (all the vendors that didn’t receive CTIA approval) are at a clear disadvantage. Ironically, the real issue in my view is the confusion this white paper creates in the marketplace. More fragmentation could very well create more opportunities for the real 800-pound gorilla: Google. (As we know, Google is working on an open source solution dubbed ZXing.)
In view of the controversy brewing about this white paper and the mixed message it sends to the marketplace, I caught up with several vendors in this space for their take. Scanbuy respectfully declined, but I am fortunate to have interviewed Jonathan Bulkeley, Scanbuy CEO, before the CTIA white paper was released. I will circle back next week with an exclusive podcast that gives us some important insight into Scanbuy’s strategy and roadmap.
Two companies that contacted me with written responses to the white paper were Mobile Data Systems (MDS) and Nextcode. Thanks to Liz Erk, who handles PR for MDS, for arranging a conf call/briefing with Rob DeStefano, MDS VP of Marketing, and Jim Levinger, Nextcode CEO. I was so impressed by her professionalism (and speed!) that I have since asked her to coordinate marketing at MSG.
To avoid any vendor spin we firmly focused on the larger issues of usability and flexibility – and the need to stress both in the next white paper. (This first white paper – though a step in the right direction, not only prematurely calls a winner in the barcode battle; it fails to detail the contribution of each company/player in the ecosystem and merely skims over the technical requirements for mobile device manufacturers. Clearly, the white paper must be viewed as a Volume 1.)
Points we (myself, Rob and Jim) agreed on:
1) The white paper has helped validate the camera scanning barcode market in the U.S., but there are serious shortcomings.
2) The market requires an open, universal and backwards compatible barcode solution. Supporting a proprietary route at this juncture sends a confusing message to the marketplace.
3) Key stakeholders such as advertisers have not been consulted at this stage. Their involvement in shaping the future of this industry is critical.
A word about advertising and the importance of open standards. In an ideal scenario, one the white paper calls a Direct Access Model, the call to action (a URL or other destination address associated with the campaign) can be decoded by the code reader software and executed upon without further assistance from the network. No middlemen, no control and no outside insights into clicks, conversions or customer analytics.
In contrast, an Indirect Access Model sends the data that has been encoded into the 2D barcode to a kind of clearing house for authentication and routing to a party there that makes the connection between the data and the campaign destination. (By way of background, Scanbuy’s approach is build around this model, a business strategy that allows it sit at the center of advertising campaigns and monitor their results.)
We know other vendors have issues with a proprietary solution. Now imagine the potential competitive disadvantage if these same vendors and their brand clients are must route their campaigns through a rival system (based on an Indirect Access Model) that exposes their campaign objectives and reveals their results. As Rob pointed out: “Every code is going to have to go back to Scanbuy, as if every company would want to be part of a closed, monolithic system. Individual companies will want to control their campaigns and who has access to the results.”
As in most cases, a middle course is usually the best path to take. Rob suggests a hybrid model paired with a more independent clearing house.
In this model the hybrid code would read and route codes to their proper campaign management portal. In the example he offered the a Clic2C code is read using the NeoReader client. The client would decode part of the code that identifies it as a Clic2C code and then query the Clic2C campaign portal at that URL to access the content. “Once it routes back to our Clic2C campaign portal, we reference the balance of the decoded data (the campaign reference information) that links back to the client with the brand’s designated content. This level of interoperability would allow users to be less concerned about the question: “Whose client do I need to have?” — and improve the user experience by enabling universal access content across campaign managers and clients.”
Read between the lines and it’s all about who owns the data. Brands want unique campaigns and will likely push back if they are presented with centralized control of their advertising message. Rob’s hybrid approach goes a long way toward restoring a balance. The bottom line: To move the market forward, we need open standards and open models that give brands – and all companies that want to participate in this emerging ecosystem – more control of their business destiny.
Disclaimer: MDS has provided MSG with a barcode free of charge for use in future mobile campaigns.
Everyone seems to want to focus on the Scanbuy as[ect of the CTIA white paper. CTIA has endorsed two standards, the open standard and ONE proprietary standard. You state that everyones code will have to go to Scanbuy, and this is false. CTIA has not at this time selected a clearing house for the codes as of yet, and anyone in the space is open to offer their solution for consieration, which will not occur according the the white paper until mid to late 2009.
I can remember not too long ago, everyone with any knowledge of 2D bar codes was complaining that standards had to be set, to limit the amount of fragmentation in the space, if mass adoption was going to occur. The argument was, there are too many codes and two many readers out there, which will turn away the users due to the complications involved.
CTIA decided those in the know were right, and appears to have decided on limiting the space in the beginning to facilitate mass adoption. To accomplish this they selected one code from both models, the open source model and the proprietary model. This makes a lot of sense if you want to gain mass adoption, to limit the number of types of codes in use, and therefore you limit the number of bar code readers as well, or at least set a standard that those readers must be able to decode these two codes.
Imagine for a minute, if all the codes were allowed and the end user needed a different reader for each one, as is almost the case now. With Beetag, Kaywa, Shotcode, Microsoft etc., all offering proprietary solutions, the end user would never adopt the tecnplogy.
Why then do none of these blogs covering this space, ever focus on the positive aspect, that this will limit the code formats to just TWO in the early stages of adoption, something everyone stated had to happen earlier on in the process? Why is there no discussion of the positives that can be accomplished with the OPEN STANDARD DATA MATRIX codes that CTIA as adopted as well. Seems all the focus is on the adoption of SCANBUY and EZCODE which is a closed proprietary solution being tried as an ALTERNATIVE to the open standard model, for those marketers who want more control over their campaigns.
Everyone focuses on the Scanbuy aspect of the CTIA white paper because the most surprising decision in the white paper is the selection of a proprietary code as part of an industry standard. The terms “proprietary” and “industry standards” seem pretty contradictory, and looking back at various technological advancements in history, proprietary models have repeatedly served to stifle industry adoption, enable monopolistic tendencies, and increase costs for all other parties in an industry. Standards absolutely need to be set for this industry to grow, but standards need to be exactly that – standards, not proprietary barcode symbologies offered exclusively by corporations that have damaged credibility based on their supposed influence on steering the decision of the CTIA’s paper.
Reducing the number of different codes for inclusion is certainly one approach to control standardization and drive adoption. However, in doing so, wouldn’t the elimination of proprietary codes be among the first levels of simplification? This would allow those providers time to migrate and adopt standard symbologies, while not giving any single code (or client reader) a head start on the rest of the industry. Based on the current CTIA position illustrated in the paper, the Campaign Manager for EZ code has already been identified (obviously, Scanbuy) and even the selection of a Data Matrix Campaign Manager will not be deployed until July 2009 (reference page 23 of the CTIA paper), giving Scanbuy at least a 9 month head start on the rest of the industry (are they making the most of this advantage?).
It doesn’t seem that this post suggests Scanbuy as the Clearing House for all codes, but the CTIA paper does state that all compliant readers MUST support EZ Code (reference page 18 of the CTIA paper in question). By nature, that will mean that Scanbuy will have a hand (and by extension, that hand will hold an invoice for royalties) in every client application reader available on the market. As for the eventual implementation of a Clearing House, this must be a wholly independent body, or may not even be necessary if there is industry consideration for the “hybrid” model briefly discussed in the post. I’m happy to further discuss this concept with any interested parties.
Scanbuy is the only one with live trials out on the street right now in a city that is known for new innovation, so I guess the answer is yes they are making the most of the situation.
Many companies do not want an open standard solution, and instead prefer the proprietary solution, so there is a need for both models going forward, and Scanbuy is the only company in the US with their own proprietary code, and probably the reason they were chosen for that model going forward.
As to damaged credibility for being involved in the process. Come on. Every standards body is made up of and or listens to those in the industry before attempting to set any standards. CTIA is no different and those in the industry who have run trials know what works and what doesn’t and therefore typically have a big effect on the outcome of the standards.
And proprietary software solutions hgave been around since the computer was invented. You are probably using one such software if you use a computer with microsofts windows on it. The fact one company had a monopoly basically did not stop the world from mass adoption, matter of fact the opposite was the case.
I could go on and on, but there are other options for those who do not wish to use Scanbuys EZ Codes in their campaigns.
[...] recent observation that 2D barcodes and other technologies – such as mobile visual search and image recognition – will [...]
[...] last post on 2D barcodes sparked an interesting debate on the recent CTIA white paper, a work-in-progress that – [...]
[...] (A discussion of 2D barcodes formats – QR codes, Datamatrix, Scanbuy’s own EZcode – is outside the scope of this post. Scanbuy’s ScanLife barcode scanner application can read all major 2D barcode formats. For background I recommend this earlier analysis.) [...]