Qr Codes in Magazine Advertising Q2 2012

™

MOBILE ACTIVATED PRINT
IN MAGAZINE ADVERTISING
INCLUDING QR CODES AND WATERMARKS
Q2 2012
By Roger Matus, Executive Vice President, Ann Carver, Analyst and
Maria Tricca, Marketing Manager, Nellymoser, Inc.

P1
The number of mobile action codes, such as QR codes, Microsoft
Tags and digital watermarks, in the Top 100 U.S. magazines jumped
dramatically in Q2 2012. A total of 2200 codes were printed during the
quarter, up from 1365 in Q1 (61% growth). This is more than double
the 1062 codes printed one year earlier in Q2 2011 (107%).
A total of 2200
To understand how these mobile action codes are being used in
codes were printed
magazines, Nellymoser surveyed every issue of the top 100 U.S.
during the quarter, magazines by circulation in 2011 and the first six months of 2012. The
up from 1365 in Q1 study is limited to national titles readily available on newsstands. This
(61% growth). eliminated publications that require a membership, such as AARP

Action Codes By Quarter

2011 2012
2500
A c t i on C od e s

2200
2000 1899

1500 1365

1062 1155
1000

500 352

0 Source: Nellymoser
Q1 ⁄ Q2 ⁄ Q3 ⁄ Q4 ⁄ Q1 ⁄ Q2
To p 10 0 M a g a z i n e s

Nellymoser, Inc. | 11 Water Street, Arlington, MA 02476 | t: 1-781-645-1515 | questions@nellymoser.com

Action Codes Per Month
810 2011
800
2012
704
700 686

A ct i o n C o d es
681
631
600 598
Every
587
magazine
in our study 500 507
449
printed at
least one 400 394
373
370
mobile action 318
code during 300 295

the quarter. 278
200 170

100 94
88
Source: Nellymoser
Jan ⁄ Feb ⁄ Mar ⁄ Apr ⁄ May ⁄ Jun ⁄ Jul ⁄ Aug ⁄ Sep ⁄ Oct ⁄ Nov ⁄ Dec
Top 1 0 0 M aga z i n es
P2 magazine and regional titles. For the Most months in 2012 showed a continuing
purposes of this study, we refer to this list upward trend from month to month, as
as the Top 100 magazines. the graph above illustrates. In addition,
the lines for 2011 and 2012 appear to
To compile the data, Nellymoser analyzed be parallel, indicating that interest and
every page in each issue within the Top 100 investment in mobile activation codes
magazines. In Q2 2012, we counted: continues at a rapid rate.

• 46,132 total magazine pages, up from A year-over-year analysis shows that the
38,719 in Q1 2012. number of action codes rose more than
150% in the first half of each year (3565 vs.
• 19,976 total advertising pages, up from 1414). If this trend continues, more than
15,691 in Q1 2012. 11,000 codes will be printed in 2012 with
Nellymoser activated every QR Code, more than 1000 codes printed per month
Microsoft Tag, Digimarc watermark, starting in September or October.
SpyderLynk SnapTag, JagTag, recognizable
image and any other code we found with The projected growth pattern for Q3 may
an iPhone or Android device. We ran every well be exceeded. Two magazines have
campaign, watched every video and visited already announced record breaking code
every web page. use for September. Seventeen’s September
2012 issue will contain more than 250
Action Code Growth activated images. GQ announced that
their September issue will activate every
For the first time in Q2 2012, every advertising page with image recognition.
magazine in our study printed at least
one mobile action code. All but ten of the The code count growth rate tells only part
magazine titles printed 10 or more codes in of the story.
the quarter.


Percentage of Ad Pages With An Action Code
11
10 2011 2012 9.77%
10.40%

A c ti o n Co de s
10.19%
9 8.30%
8.36%
8.90%
8
7.42% 8.05%
7.96%
7
6.48%
6
5.16%
5.02% 5.76%
More than 10% 5
of magazine 4.02% 4.96%
4
ad pages 3 3.55%
contained a Source: Nellymoser
Mar ⁄ Apr ⁄ May ⁄ Jun ⁄ Jul ⁄ Aug ⁄ Sep ⁄ Oct ⁄ Nov ⁄ Dec ⁄ Jan ⁄ Feb ⁄ Mar ⁄ Apr ⁄ May ⁄ Jun
code in Q2
To p 1 0 0 M ag az i n es
2012, up from
5% just one The most revealing way to understand the Fitting a trend line to this data projects
impact of action codes on a month-to- that the percentage of advertising pages
year ago.
month basis is to look at the percentage containing an action code will reach or
of advertising pages with an action code. exceed 12% in September 2012.
This is because the percentage calculation
normalizes for the number of issues printed The average and median number of codes
and the number of ad pages per issue. in Q2 2012 were the highest we have seen,
P3 except for Q4 2011, which was helped by
Reasons for focusing on percentage holiday season promotions. The greatest
numbers for month-to-month comparisons number of codes in a magazine issue was
include: (1) weekly magazines print more 51.
issues in some months than others, (2)
some magazines skip or combine issues for QR Codes Lead Market
certain months or weeks during the year
-- especially in the summer and around the As the graph on the next page shows,
year-end and (3) certain months, especially QR codes and Microsoft Tags continue to
during the holiday season, tend to have dominate the mobile activation market.
more advertisements.) However, QR now has a significant lead
with more than an 80% market share.
As the chart above indicates, more than This is a significant change from Q2 and
10% of magazine ad pages contained a Q3 of last year when the market was split
code in Q2, up from 5% just one year ago. between QR and Microsoft Tags.

Number of Action Codes Per Issue
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012
Average number of 2.33 4.23 4.83 6.50 4.88 6.07
codes per issue
Median number of 2 3 4 5 4 5
codes per issue
Greatest number of 12 29 54 70 32 51
codes in an issue
Number of action codes per issue for issues that contained at least one action code. Each weekly
issue of a weekly magazine counted as a separate issue.


Action Code Market Share By Month

2011 2012
QR Code

% of Acti o n Co des
100
Microsoft Tag
90 Other 85% 85%
80% 80% 82%
80 77% 76%
74%
70 68% 65%
63%
60 55%
50
Two new
40
technologies 41%
30 32%
made their first 21% 33%
20 25% 17% 14%
appearance in 23% 13% 12% 13%
10 17%
2012. 11%
0 5% 4% 4% 7% 6% 7%
2% 2% 1% 2% 1%
Type of Code Jul ⁄ Aug ⁄ Sep ⁄ Oct ⁄ Nov ⁄ Dec ⁄ Jan ⁄ Feb ⁄ Mar / Apr ⁄ May ⁄ Jun
Aug. Reality 1
Digimarc 5 29 8 8 46 5
JagTag 7 14 10 9 10 3 2 3 3 3 3 4
MSFT Tag 88 152 109 145 226 105 72 57 69 88 139 96
NFC 1

Other 1 1
QR 175 202 346 433 440 502 244 359 494 599 615 576
P4 SpyderLynk 7 1 40 5 14 1 24 1 7 2
WIMO 1 1 2 2 2 2

Digimarc watermarks now lead the “Other” used with augmented reality, appeared on
category, having risen from just five codes the cover of the Sports Illustrated in March
in all of 2011 to 96 codes in the first half 2012. Image recognition is attracting
of 2012. Digimarc watermarks enable interest in magazines as they do not
publishers to create custom branded icons require any change in the image itself
which match the look and feel of the brand or the pre-production process, as other
instead of QR codes. This makes them mobile action codes do.
popular with many designers.
The first Near Field Communications (NFC)
Two new technologies made their first campaign appeared in Wired, which is
appearance in 2012. Image recognition, not one of the Top 100 magazines. NFC

Demonstration of New Mobile Activation Technologies

Image recognition with augmented reality (left) and Near Field Communications are two new
technologies that appeared in 2012. Short video demonstrations (about 90 seconds) of these
technologies may be seen at http://www.youtube.com/nellymosertv.


Uses for Action Codes Q2 2012
Video: 40%
Opt-in/Subscribe/Sweeps: 19% $
Social Media: 18%
Buy Online 14% $
Store Locator: 12%
Video is by far
Coupon: 7%
the most widely
used mobile Photo Gallery: 5%
experience (40%). Downloads: 4%
Recipes: 4%
Voting: 1%
Source: Nellymoser
NOTE: Columns total more than 100% because each action code may lead to more than one
engagement. For example, it may show a video and then offer to share the video.

enables a phone to be activated just by • Data Capture and List Building (Opt-
placing the device on an ad. However, it ins / Subscriptions / Sweepstakes):
P5 adds the expense of embedding an NFC Action codes are effective for building
chip into the advertisement. We believe databases because readers can
that cost will slow NFC adoption in the near respond immediately and wherever
term. they are reading the magazine.

How Action Codes Were Used Sweepstakes were, by far, the largest
contributor in this category. While a
As shown in the chart above for Q2 2012, sweeps can be run with just one action
video is by far the most widely used mobile code, there is a growing trend towards
experience (40%). Sweepstakes and social sweepstakes that use multiple codes
media are the next most common uses, and span an entire issue with multiple
with each being around 20%. advertisers and editorial sections
participating.
Nellymoser scanned every code, activated
each campaign, watched each video and • Commerce (On-line Store, Brick-
completed actions requested for the and-Mortar Store Locator / Coupon):
mobile campaigns. Our qualitative analysis Readers can immediately scan and
is that most action codes were used for one act on a desire to purchase. Links to a
or more of the following four purposes: corporate e-commerce store led the
category at 14% followed by in-app
• Branding and Demonstrations: By store locators at 12%. Some store
far, the largest usage for action codes locators used the phone’s built-in GPS
was to showcase a video. These videos to find the nearest location.
are often created specifically for mobile • Social Media: Action codes were also
use. Examples include: used for sharing via Facebook, Twitter,
• A behind-the-scenes look Pinterest and email. In Q2, 18% of
• A product demonstration codes enabled readers to share a video
• A how-to video link or product information via social
• An entertaining video


media. (NOTE: Only social sharing that As Nellymoser tallied each action code for
was part of the mobile campaign was this study, our team took notes about the
included. Some video campaigns led scanning experience. While our notes do
to a YouTube Channel, which in turn not lead to precise counts, as the other
has a social sharing feature. These statistics do, Nellymoser is able to identify
were not counted.) general trends. We learned the following:

Mobile-Capable Sites • Approximately 10% of all action
codes went to “web content,” such as
Almost all scans resulted in an experience company home pages, a web form or a
that was technically viewable on a mobile desktop-style e-commerce site.
Nearly half of phone. However, a quarter of these mobile
all action codes experiences appear not to be designed or • About 10% went directly to a YouTube
optimized specifically for mobile use. video or a YouTube Channel mobile
(49%) came from
page. While they showed videos, they
companies in just Nellymoser classifies mobile experiences were not optimized with experiences
four industries: into the following categories: after the scan, such as a sign-up form.
beauty, home, • Roughly 1.5% went directly to a
• Web Content A web site that is
health and auto- technically viewable on a smartphone, Facebook page.
motive. but mobile was not a consideration in • Another 1.5% would not scan or
site design. contained bad links, including
• Mobile Capable: Technically viewable eight codes that linked to a QR
on the phone (e.g., written in HTML5) code generator site. (Nellymoser
but not optimized for conversion, categorizes these as “Does Not Work.”)
P6 campaign goals, etc. Top Industries and Brands
• Mobile Optimized: Both Mobile
Capable and optimized to achieve Nearly half of all action codes in Q2 2012
campaign objectives. It is fast and (49%) came from companies in just four
easy to use on a wide range of mobile industries: beauty, home, health and auto-
devices. motive.

Top 10 Industries and Brands Q2 2012
Ac t i o n C o de s Act i o n C o des

1 Beauty 1 Sally Hansen
360 64
/

⁄

2 Home 2 John Frieda
303
/

32
⁄

3 Health Inﬁniti
3
217
/

27
To p I n d u s t r i e s

⁄

4
To p B r a n d s

Automotive
4 Nivea
195
/

26
⁄

5 Food/Bev
107 5 Cuisinart, Tyson
/

6 25
⁄

Fashion
105 7 Progressive
/

7 Pets 23
⁄

77 8
/

Restart Fitness

8 21
⁄

Pharmaceutical, Travel
9 Essure
73
/

19
⁄

10 Financial
10 Blue Buffalo, Botox Migraine,
58 Tide Pods
/

Source: Nellymoser 18 Source: Nellymoser


Automotive joins the top four industries list Top Magazines Q2 2012
for the first time. There was a big jump in Act i o n C o des
the use of codes by the automotive indus- 1 Better Homes and Gardens
try, from 81 codes in Q1 2012 to 195 codes 75

⁄
this quarter.

To p M a g a z i n e T i t l e s
2 InStyle
66
The number of advertising codes used by

⁄
3 Popular Mechanics
the fashion industry has remained relative- 65

⁄
ly constant since Q1 (105 versus 90). How-
ever, due to the growth in other categories, 4 People
60
fashion fell from fourth place to sixth place

⁄
The number of in the list (from 15.7% in Q1 to 4.1% in Q2). 5 Bloomberg Businessweek
59
brands using

⁄
Traditional Home,
The number of brands using action codes 6
action codes Car and Driver
56
jumped by one-third from 451 in Q1 to 598

⁄
jumped by one- 8 Shape
in Q2. This shows increased adoption.
third from 451 in 51

⁄
Q1 to 598 in Q2. Most of the 12 brands on the top 10 list this 9 Marie Claire, Allure
quarter were not on the top 10 list in Q1. 46

⁄
Source: Nellymoser
Only Tyson, Restart Fitness and Blue Buffalo
repeated. Top Magazines By
Number of Codes Per Issue
Top 10 Magazine Titles
Ac t i o n C o d es P er Issu e

Better Homes and Gardens, InStyle and 1 Better Homes and Gardens
25.0
P7 Popular Mechanics topped both the list of

⁄
magazines with the most number of action 2 InStyle
codes and the highest average number of To p M a g a z i n e T i t l e s
22.0
action codes per issue during Q2 2012. ⁄
3 Popular Mechanics
21.7
⁄

We believe that the average number Traditional Home,
4
Car and Driver
of codes per issue is the best way to 18.7
⁄

determine the Top Magazines because the 6 Shape
calculation puts weeklies, monthlies and 17.0
⁄

those that skipped an issue on the same 7
Marie Claire, Allure
basis of comparison. 15.3
⁄

9
All of titles on the Top Magazines By Cosmopolitan
14.7
⁄

Number of Codes Per Issue list, except 10
for Better Homes and Gardens and Popular Woman’s Day
13.7
⁄

Mechanics, appeared in the Q1 list. Better
11 Redbook
Homes and Gardens jumped to the top of
13.3
the list with two issues containing nearly Source: Nellymoser
⁄

30 codes each. Popular Mechanics rose to
third place with two issues with 20 or more practice and follows the pattern of many
codes. other calls to action.

Action Code Text There is a clear trend moving away from
having other content around the QR code,
In Q2 2012, 58% of all action codes which is an indication of wider acceptance.
were accompanied by information that Only 13% of codes were customized and
described what happens after the scan. only 6% were accompanied by an icon.
This is considered by many to be a best Few codes were accompanied by an SMS
campaign.


Action Codes In Print Q2 2012

58% 13%
Describes destination Are customized

Scan to Shop
6% Get the Free App 26%
Have icon From Nellymoser Use color
Go To: ScanNow.mobi
Or text SCAN to 800-555-1234

There is a
3% 16%
clear trend Choice to use SMS Have instructions to get app
moving away Source: Nellymoser, Inc.

from having
Action Code Page Location magazines. The number of codes,
other content 2200, exceeded even the 1899 codes
around the QR More than 85% of action codes are placed printed during the 2011 holiday season.
code, which is on the bottom half of the page, the
traditional location for a call to action. • One out of every ten advertisements
an indication contained a QR code or other action
of wider The diagram below divides a magazine code. The peak month was May with
page into quadrants and shows by 10.4% of advertising pages containing
acceptance. an action code.
percentage where the codes appeared.
Numbers that overlap quadrants indicate • The rate of growth in the percentage
P8 that a code crossed quadrant boundaries. of advertising pages is growing fairly
steadily. If the trend continues, the
Conclusion and Key Findings percentage of advertising pages with a
mobile action code should exceed 12%
For Q2 2012, Nellymoser analyzed by September 2012.
46,132 pages in the top 100 U.S. national
magazines. We reached the following key • QR codes are the clear market leader
conclusions: with more than three-quarters of the
market since December 2011. Microsoft
• A record number of mobile action Tag remains in second place with a 12%
codes appeared in the top 100 to 17% share.

Action Code • Digimarc watermarks have become
Location on Page the leader in the “Other” category.
New technologies, such as image
recognition with augmented reality
and NFC have entered the market.
0.5% 6.9%
• A significant number of campaigns that
2.8%
lead to desktop web sites have broken
links or do not scan at all.
0.8%
0.3 %
0.5% • Four types of campaigns dominate the
use of action codes:
45.2%
40.4% • Video demonstrations and
2.6% branding

• Data capture and list building
Source: Nellymoser, Inc.


• Links to e-commerce sites and number of brands jumped to 598 in Q2,
store locators for brick-and-mortar up from 451 in Q1.
locations
• More than 85% of action codes are
• Social media sharing with links to placed on the bottom half of the page.
Facebook and Twitter
Nellymoser intends to update this report
• About half of all action codes used in on a regular basis to identify trends.
magazines came from companies in
just four industries: beauty, health, Get notifications of future updates by
home and automotive. following Nellymoser on Facebook at
A significant http://www.facebook.com/nellymoser.
• More brands have adopted mobile
number of action codes than ever before. The
campaigns that
lead to desktop
web sites have
broken links or
do not scan at
all.

P9

About Nellymoser Nellymoser’s customers include leading
publishers, advertisers, retailers and
Nellymoser, Inc., (http://www.nellymoser. consumer packaged goods companies.
com), is a mobile marketing and
technology services company founded in Scan To See Nellymoser In Action:
2000 and headquartered in Arlington, MA.
Nellymoser creates interactive consumer
experiences on mobile phones and tablets.

The company is expert in producing
mobile-activated print campaigns,
companion apps and mobile-optimized
web sites that engage consumers, foster
brand loyalty and drive revenue for clients.
Copyright 2012 by Nellymoser, Inc. All Rights Reserved.
Not responsible for errors and all information is subject to change without notice. Nellymoser and the Nellymoser logo are
trademarks of Nellymoser, Inc. All other marks are the property of their respective owners.


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Copyright 2012 Nellymoser, Inc. All Rights Reserved. Not responsible for errors and all information is subject to change without notice.
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