Could QR codes turn newspapers into cash cows?

by Shawn Smith on April 6, 2008

QR code in magazine - Flickr photo by akaalias

Image by akaalias

Thanks for checking out my series on how QR codes will change the newspaper-consumer relationship. If you’re unfamiliar with QR codes, please take a look at my post on what you need to know about these innovative communication images.

QR codes will revolutionize the print-to-mobile-to-web markets. Believe it. Quick response codes connect printed products immediately to shop-by-SMS, mobile URLs and added information.

The coming QR code bonanza isn’t just an advertiser’s dream, it could be the very thing that rights the ship of falling revenues at newspapers.

Why newspapers should start using QR codes sooner rather than later

When QR codes blow up (and I predict it happening within a year or two), any newspaper that jumps on the bandwagon first will have a significant advantage over its print competitors. Why? Because advertisers will begin dictating advertising investments based on QR metrics.

Advertisers will be the first to adopt this technology in the U.S., placing QR codes in their print ads to give consumers more information. Advertisers will be able to track how and where consumers find their ads . If advertisers start seeing that their ads are more well-received in one paper over the other, wouldn’t it make sense they would invest more in one paper than the other?

The newspaper that first shows readers it can be useful with QR codes will more likely increase reader loyalty and prove the usefulness of its printed product in a mobile environment.

As papers become more engaging through using these codes, wouldn’t it make sense that more readers would pick up papers while on the go? Newspapers suddenly become a lot more interactive, which could help increase newsstand sales and subscription rates.

QR codes will revolutionize relationship between newspapers and consumers

Are QR codes really that engaging?

Do we really need to care about these codes? Do they really work? Yes!

Nearly 42 percent of Japanese mobile phone users report to scanning QR codes to find more information when an advertisement catches their eye, according to a December 2007 report by Cross Marketing Inc.

The U.S. market will take some time to adapt. But when mobile users finally “get it” those newspapers that have established themselves as QR leaders will shine.

Google adds QR codes to print ads

Googles’ Print Ads allow advertisers to use their Google Adwords accounts to place advertising in hundreds of newspapers, from local papers to metro dailies, throughout the U.S.

Wouldn’t it be great to engage that nationwide newspaper audience online? Google thinks so.

Google is encouraging advertisers to contact them to start using QR codes in Print Ads. As the prevalence of QR codes in the U.S. market catch up to the rest of the world, the newspapers which are using the Print Ad networks will likely see a big influx of the codes in their advertising sections.

Papers with unsold ad space in their pages will be able to use Google’s Print Ads that will likely get a boost once QR codes become accepted by consumers.
QR code scan off computer - Flickr photo by Dan Zen

Image by Dan Zen

Editorial content can tap affiliate sales

Warning: You’re about to read into a grey area.

Never before have newspapers been able to sell products that are being reviewed in their sections. For a variety of real and important reasons, newspapers have separated editorial content from revenue. Doing so ensures that the news organization’s editorial judgment is questioned less for reviewing some products over others. Makes sense to me.

However, the new consumer doesn’t want to read reviews and then go hunting for the product that they want to buy.

Let’s try a real world example. When I lived in D.C., I often saw strangers share sections of the Washington Post. One person had ownership of that paper. I couldn’t ask to borrow a section and take it with me when I got off the train.

But imagine the Post had a great review of the top five coffee makers, and I’m in the market to buy one. Currently, if I wanted to trust the WaPo’s recommendation, I would have to remember the brand and model of the coffee maker I want to buy after reading the rankings in a stranger’s paper in the train. What are the odds I will remember the exact one the WaPo suggested? Slim at best.

Instead, I want to an easy and quick way to remember and buy the products that grab my interest. I want to buy products when I want to buy them.

Newspapers are in a unique position of having a large audience that looks to them for reviews of great products.

Let’s take it one step further.

Why not add a QR code to the end of a story that sends people directly to an affiliate link for that product? If people want to buy the product, great! The newspaper is giving people quick access to being able to buy that product directly from a review. Using an affiliate link in the QR code, the paper will receive commission for the purchase. (Yes, I am aware of the issues with this. I do know some of you are throwing up your arms. But the issue is not about maintaining editorial “objectivity,” it’s about increasing revenue.)

And let’s not just think about product reviews – what about using QR codes for affiliate links to buying movie or concert tickers? Plane fare from travel stories? How about reselling iTunes songs for music reviews?

Consumers are already buying and comparing prices on their mobile devices using Amazon.com’s Text to Buy feature. Can newspapers get in the game before everyone else saturates the market?

Whether through ads or editorial inclusion, QR codes could be a nice revenue-generator for newspapers.

What do you think?

{ 8 trackbacks }

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{ 7 comments }

Andrew Miller April 6, 2008 at 10:06 pm

Great series of posts, very informative. I Stumbled it for you.

My main question is about your prediction of when the usage of QR codes will “blow up”. 1-2 years seems like a pretty short period of time to reach a critical mass and widespread adoption. First, newspapers have to start using QR codes en masse. Second, consumers have to be educated about what they are and what they can be used for. Third, consumers have to be equipped with camera phones and presumably some sort of data plan. I don’t have any research (or the time to find it) on camera phone and data plan adoption/upgrade rates, but this is obviously one area where we are lagging behind Japanese consumers. This might be the main hindrance, as I suspect the first two obstacles are related and can be overcome quickly.

As a benchmark, I give it 3-5 years before my parents grasp the concept and figure out how to use it. They just learned how to text and haven’t quite figured out how to get their photos off their camera phone. So far, my predictions on their adoption rates of email, DVDs and DVRs has been pretty close, so we’ll see if I can go 4 for 4.

Mike Schiller April 6, 2008 at 10:47 pm

This was a seriously thought-provoking article about a great opportunity for old media to get more interactive. I especially like the idea of allowing users to learn more about an album or movie right after reading a review by scanning the QR code.

However, this panacea may turn out to be a wolf in sheep’s clothing. Metrics are a double-edged sword, as online advertising execs found out the hard way during the dot bomb. The final trump card that old media still holds in the advertising arena is foggy metrics — “foggy” meaning they don’t provide any concrete response numbers. And the amazing thing is: print advertisers don’t expect them! They just assume their ads are working. But once newspapers start training advertisers to expect interaction with their messages, they can never turn back. Will advertisers still want print ads when they realize how low their imeediate conversion numbers are? Or will they flock to the cheaper alternative (online advertising) and further the bleeding out of print media?

Shawn Smith April 6, 2008 at 11:10 pm

@Andrew – Thanks for the stumble! I’ve actually had a few conversations in the last couple of days, those which resulted in similar conclusions you’ve stated. I definitely understand the points. My mom just recently started texting with any sort of proficiency and my dad just discovered email (both only in their 50s). My prediction of 1-2 years might be a little quick, but I think it’s almost necessary to jump ahead in this instance. I’d rather be behind this early than get blindsided by it later. Take the Blockbuster vs. Netflix example. Netflix put a huge cramp in Blockbuster’s style by allowing consumers to request nearly any title through the mail and return movies whenever without late fees. This forced blockbuster to jump in the dvd-by-mail game, meanwhile Netflix was able to establish itself as a brand while Blockbuster played catch-up. I think the same will be true for marketers who embrace QR codes ahead of the rest. I’ll vote you’re probably right with 3-5 years before mainstream adoption, but I bet we start seeing these codes being used shortly.

@mike Great point about print advertisers not paying attention to metrics! The scary thing for print is that they will have to start paying attention, because QR codes will happen and advertisers will get metrics one way or another. If newspapers aren’t paying attention to them, they’ll lose to print competitors who spend the time. I also don’t think QR codes will turn advertisers more toward online. Actually, I think the opposite. QR codes make print more relevant. They will allow people to connect the physical world of paper with cyberspace (ugh I hate that term)and the mobile market. I have heard of a least a couple large newspaper chains seriously considering adding these to their advertising strategies.

Thanks for the insightful comments guys. I’ve still got two more posts on this topic coming this week.

Andrew Miller April 7, 2008 at 12:01 am

I’m sure this isn’t the first, nor will it be the last, comparison to the CueCat: http://en.wikipedia.org/wiki/CueCat

Sorry, had to throw in a little “ancient” dot com bust reference. Poor CueCat. So much potential, but ahead of its time.

streetstylz April 7, 2008 at 1:25 am

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