QR Codes and Neustar’s Ecosystem

It’s not magic, all you need to run a QR Code campaign is a QR Code that decodes to a mobile site landing page and a deployment plan.

It’s not a mystery either, a QR or Datamatrix Code is free to generate and use, and you can use it in a print ad, on a can, on a poster or wherever you want.

In addition if you put Google Analytics on your mobile site you can measure the popularity, the conversion rate and ROI of your campaign for free. And the cost of the campaign is simply the cost of deployment plus the cost of the mobile site.

Easy.

However that is not the way Neustar see it and they have conjured up a methodology worthy of a 19th century magician. In a Press Release last week they announced the Mobile Barcode Clearinghouse Service and this is how it looks in a diagram taken from their Barcodes Overview Presentation:

Diagram showing Neustar's ecosystem

You can see from the ecosystem they have created how Neustar intend to generate revenue for themselves and the telcos. Forget all the smoke and mirrors on the periphery of the diagram, the cash generator is the Global Registry and this is where the client or their agency is expected to pay for registering and using a 2d barcode.

Why should anyone pay to register or use a 2d barcode? It’s a good question and Neustar have the answer. You pay because the 2d barcode that you get does not decode as the url of the landing page but as a totally different code that has to be looked up in a database (the Global Registry in the diagram) in order to find the url of the landing page!

Breathtaking isn’t it? The user scans the 2d barcode, it decodes to something like “mc*nsr*54321” and this is sent through the mobile network operator’s local gateway to Neustar’s clearinghouse. The clearinghouse does a registry lookup then queries Neustar’s campaign manager system for a URL. Then the URL is sent back to the user’s mobile device which downloads the landing page.

Of course this only works if the user’s mobile device is decoding with the Neomedia or I-nigma readers who are Neustar’s partners. If it happens to be using one of the many other readers available the user will be left staring at a meaningless line of alphanumeric characters.

So if you are a brand or an agency with more money than sense and you are thinking of implementing a QR Code campaign then you may wish to play in Neustar’s ecosystem, with its convoluted lookup and reader limitations.

Or you could just do what Google did with its 100,000 QR Code decals or Pepsi with its million cans of QR Coded Pepsi Max, simply initiate a campaign without a superfluous ecosystem.

Agree/Disagree?

Added 8 hours later: I have been asked about the security aspects of QR Codes with reference to Neustar’s putative barcode clearinghouse service.

Neustar believe that their indirect QR Coding is inherently more secure because the user’s mobile device only accesses urls registered with their system.

I have three observations:

1. Hackers at the annual Pwn2Own contest have so far been unable to break into or exploit any mobile operating system.

2. QR Codes are no more or less secure than the link they point to, so if a user is obsessively security conscious they will not be clicking any links at all.

3. The only exploit that I know of with QR Codes is QR Code switching and even Neustar would not claim to prevent that…

6 thoughts on “QR Codes and Neustar’s Ecosystem”

  1. Agree. It’s not so much silly as out-of-date – this is a concept 10 years in the making, and finishing about 5 years after it was obsoleted. Outside Japan, camera phones have been powerful enough to easily read QR codes encoding something mildly complex like a URL, removing the raison d’etre for this whole compact, indirectly-encoded business.

    Encoding and decoding are in no way worth paying for. Analytics and campaign management services are worth paying for. If they’re offering these, OK, at least they’re selling something non-trivial. But as you say, this is also already easily had for free, by now. I’d imagine someone buys such a service *in spite of* the indirect encoding, not because of it.

    But yes the real killer is the fact that 99.99% of readers in the world won’t do anything with that string. Users will sit there staring at gibberish, which is the biggest possible failure for a mechanism that only needs to be a hyperlink. It fails at that for essentially everyone.

    I can’t imagine marketers signing on for something only works for like 90% of the market, when something that works for 100%. But this works for all but a rounding error’s worth of clients out there. I just can’t imagine who is going to sign up — *if* they’re told about this.

  2. I’m using an indirection technique for my contact sharing QR code site, but I had a practical reason for it, I wanted to keep the codes a fixed size. I’m using an internal url shortner to act as the intermediary to the link of the actual contact info. That lets the code be a lot smaller and easier to decode (rather then packing all the info into the code itself). But this begs the question, why didn’t they do this too? It seems having a url redirect would allow all readers to work (and not be left with meaningless mumbo-jumbo) and keep them in the loop (not that I think that’s necessarily a good idea, just saying).

  3. You forgett one important aspect. There is no real direct relsolution. All direct codes from all the major code reader providers 1st route the direct code to their gateway – analyse it and count it – and then send it back 1:1 to the browser. ALL reader providers want to earn money. So first mention that the reader is for FREE – when a certain link of a specific brand is used very often go to the brand and ask for money. THIS IS THE ROLE OF ALL GATEKEEPERS=READER PROVIDERS! Think about it. Same strategy like MS in early days remove the copy protection – spread the SW and when mass adoption is reached CHARGE the business USERS!

  4. Neustar’s efforts are going to further fragment the QR industry and will drive more business to proprietary tag formats.

    Can Neustar really sell this to the advertising industry?

    Advertisers can be duped by advertising pretty easily. It’s possible the consortium undertake a “we’re good, they’re bad” strategy. But like any war there are casualties on both sides and Neustar themselves could be the first casualty in the battle. I’d also look at anti-trust issues that arise in any process where bigger players work together to knock out smaller competition.

    If Neustar took a more egalitarian approach and provided this service at no cost for scans receiving less than 100,000, combined with what would be equivalent to Comscore or Nielsen metrics and certification, they could be the benevolent dictator everyone loved.

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