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From Scan to Sale, Magazines Push into Mobile Commerce

Magazines are starting to think beyond the page and experiment with smartphone applications they say will provide their readers with additional content and bring a whole new level of engagement with the publication.

Esquire magazine is one pioneer in the space. It plans to use mobile technology to allow readers to purchase items right off the page via their smartphone.

In its March issue, which hits newsstands this weekend, Esquire will have barcodes next to all products featured in its editorial section. Readers simply scan the barcodes and a menu on their phone will open with several options, including the choice to instantly purchase the product. Users will also be able to find retailers carrying the item or learn more about how to style the products.

“It’s the perfect logical extension to close the gap between being inspired to taking action,” said David Granger, editor-in-chief of Esquire. “It’s what’s always been lacking. If we could enable purchase for items we recommend, why wouldn’t we make it easier for people to buy these specific items?”

Granger said the barcodes are an experiment, and he can see them serving as an extension of the magazine. The barcode works much like a hyperlink on a Web site, and eventually Granger said he would like to use the technology to link users to other content on their phones including videos, photos and more.

But there are some caution lights ahead. This smartphone technology is not likely the killer app the struggling magazine sector is looking for to breathe new life into its business.

Barcode technology is not new, but it is undergoing somewhat of a rebirth on account of the rapid growth in the usage of smartphones, and print mediums — and their advertisers — may stand to benefit, said Jonathan B. Bulkeley, CEO of ScanBuy.

ScanBuy, a company that focuses on using 2D barcodes for marketing purposes, is Esquire's partner as it makes the jump from physical to digital possible in palm of your hand. ScanBuy has designed ScanLife, an app that must be opened while capturing the barcode with the smartphone's mobile camera.

“Print has always wanted to be measurable and interactive, and people reading printed information want more information and they want it now,” said Bulkeley.

Barcode technology, like what is being featured in Esquire, does both, Bulkeley said. Although the barcode technology may ultimately attract some advertisers to print publications, the technology isn't likely to catch on with consumers, said Mark Beccue, a senior analyst for mobile commerce at ABI Research.

He sees barcode scan technology being most effectively used at brick-and-mortar retailers where people can use a 2D barcode on their mobile phone as a means to pay for items, just like a gift card, Beccue said.

“Being able to buy from the print magazine is something nice to have, but it remains to be seen how consumers respond,” said Beccue. “If anything, it’s more for the novelty than to make a purchase.”

Still, Esquire, a Hearst Communications publication, is forging ahead.

The ScanLife app, which is currently present on about 25 million mobile devices, can be downloaded on the mobile browser at www.scanlife.com, at the Apple App Store for an iPhone or at Google's Android Market for a Nexus One or Android mobile device.

ScanBuy allows publishers to measure readers’ engagement with content and advertisements, much like how audience engagement is measured on Web sites. The company also will be able to measure what content the reader is responding to by keeping track of statistics like the number of scans per page, an incentive Buckeley said might help boost print’s appeal to advertisers.

And with magazine sales dropping nationwide, the industry can use all the help it can get.

Earlier this week a report from the Audit Bureau of Circulations indicated that magazine circulation in the US during the last six months of 2009 was down 2.23 percent from a year ago. Single copy sales were down 9.1 percent, while paid subscriptions were down 1.12 percent.

The Canadian newspaper The National Post, a partner of ScanBuy, is already using barcode technology in advertisements and in editorial content; and this trend could catch on more broadly in the print industry, Buckeley said.

The potential of ScanBuy's technology has received a lot of attention lately, including from investors. Motorola's venture capital arm,Motorola Ventures, announced earlier this month its decision to invest in ScanBuy, however, financial terms were not disclosed.

As for Esquire, Granger said will be closely gauging readers’ response to the March issue. However, he has already shared details of the barcode technology with his ad team in case the publication's advertisers want to consider it.

But it’s going to take more than a mobile marketing push to save the magazine industry, Beccue said.

“They are clearly making sure they are doing things to engage advertisers, but will that attract more subscribers? I doubt it, they have a much bigger issue to solve,” said Beccue.

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Questions? Comments? Email us at consumernation@cnbc.com

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