The document summarizes data from a study of mobile action codes, including QR codes, in the top 100 US magazines in Q1 2012. Some key findings: - The number of codes printed increased significantly year-over-year, with 1365 codes in Q1 2012 versus 352 in Q1 2011. - QR codes dominated the market, accounting for over 80% of all codes. - For the first time, the percentage of magazine pages containing a code exceeded 8% each month of the quarter. - Codes were primarily used for branding through video, e-commerce, opt-ins/sweepstakes, and social media engagement.

1. ™
MOBILE ACTION CODES
IN MAGAZINE ADVERTISING
INCLUDING QR CODES AND WATERMARKS
Q1 2012
By Roger Matus, Executive Vice President, Ann Carver, Analyst, and
Maria Tricca, Marketing Manager, Nellymoser, Inc.
P1
The market for mobile action codes in the top 100 U.S. magazines
continued to grow in Q1 2012. Mobile action codes include all 2D
barcodes, QR codes, Microsoft Tags, SnapTags and digital watermarks.
Every magazine title in our survey, except for one, contained at least
one mobile action code during the period. More than 450 brands ran
1365 codes were printed at least one advertisement during Q1 that included a code.
in Q1 2012 versus 352
during the same period As the chart below shows, 1365 codes were printed in Q1 2012 versus
352 during the same period last year. The rate of increase from
last year. January to March was also greater in 2012 than 2011. If the trend
Action Codes By Month
700 2011
Action Co des
681
2012
631
600 598
587
500 507
449
400 394
373
370
318
300 295
278
200 170
100 94
88
Source: Nellymoser
Jan ⁄ Feb ⁄ Mar ⁄ Apr ⁄ May ⁄ Jun ⁄ Jul ⁄ Aug ⁄ Sep ⁄ Oct ⁄ Nov ⁄ Dec
To p 100 M a g a zine s
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2. Percentage of Ad Pages With An Action Code
2011 2012
10
A ct i o n C o d es
9 8.30%
8.36%
8.90%
8 7.42% 8.05%
7.96%
For the first 7
6.48%
time, the 6
percentage 5.16%
5.02% 5.76%
5
of magazine
4.02% 4.96%
pages 4
containing an 3 3.55%
action code Source: Nellymoser
exceeded 8% Mar ⁄ Apr ⁄ May ⁄ Jun ⁄ Jul ⁄ Aug ⁄ Sep ⁄ Oct ⁄ Nov ⁄ Dec ⁄ Jan ⁄ Feb ⁄ Mar
each month continues, the overall adoption Top 1 0 0
of mobile Mactivatedievery campaign, ran every video
a ga z n es
in the quarter. action codes will grow at an even faster and visited every web page.
rate during the year.
Action Code Growth
Action codes are popular with publishers
and advertisers because they offer a Every magazine in our study, except for
compelling way to activate print with Taste of Home, contained at least one code
P2 mobile and social content that engages in Q1. The percentage of magazines with at
readers, builds brand loyalty and captures least one code is up from 96% in Q4 2011.
new business.
Overall, the total number of action codes
To understand how QR codes are being printed increased to 1365 in Q1 2012 from
used in magazine advertising, Nellymoser 352 in the same period of 2011. Period-
surveyed the top 100 U.S. magazines to-period comparisons are important
by circulation. This study includes all to seasonally adjust the data. Some
issues dated during Q1 2012 as well as magazines do not publish a January
information from previous Nellymoser issue. Some others create a combined
studies of magazines published in 2011. issue that spans December and January.
(We count combined issues as being in
The study is limited to national titles readily December. ) In addition, advertising pages
available on newsstands. This eliminated increased around the holiday season in the
regional publications and any that require magazines that did publish.
a membership, such as AARP The Magazine.
For the purposes of this study, we refer to The percentage of advertising pages with
this list as the Top 100 magazines. an action code may provide the most
accurate measurement of mobile action
To compile the data, Nellymoser counted code adoption.
and analyzed every page in the Top 100
magazines. We analyzed 38,719 pages in For the first time, the percentage of
Q1, including 15,691 advertising pages. magazine pages containing an action code
exceeded 8% each month in Q1 2012.
Nellymoser scanned every QR code,
Microsoft Tag, SpyderLynk SnapTag, The average and median number of action
Digimarc watermark and all other codes codes per issue returned to the levels
with an iPhone or Android phone. We found in Q3 2011, when there were no
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3. Number of Action Codes Per Issue
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
Average number of 2.33 4.23 4.83 6.50 4.88
codes per issue
Median number of 2 3 4 5 4
codes per issue
Greatest number of 12 29 54 70 32
codes in an issue
Number of action codes per issue for issues that contained at least one action code. Each weekly
QR codes issue of a weekly magazine counted as a separate issue.
clearly
holiday season promotions. There were All other codes combined had less than
dominated the also fewer mega-promotions in Q1 versus 10% share. Digimarc watermarks and
market at more Q4. The greatest number of codes in a SpyderLynk SnapTags had an impact with
than 80% of all magazine issue during Q1 dropped to 32 major campaigns with multiple codes in
from a holiday season high of 70. select issues. For example, 25 Digimarc
action codes. watermarks appeared in the February
QR Codes Lead Market Sports Illustrated swimsuit issue while 24
SpyderLynk Snaptags appeared in the
QR codes clearly dominated the market March issue of Glamour.
with more than 80% of all codes in the Top
100 magazines during Q1, up from 72% in How Action Codes Were Used
Q4. This is a significant change from Q1 of
last year when the market was closely split In contrast to last year, it is now unusual for
P3 between QR codes and Microsoft Tags. a magazine reader to be sent to a desktop-
Action Code Market Share By Month
2011 2012
QR Code
% of Ac ti o n C o d e s
100
Microsoft Tag
90 Other
80% 80% 82%
80 77%
75% 74%
70 68% 65%
63%
60 53% 55% 55%
50
40 46% 45%
41%
30 32% 21% 33%
20 25% 25% 23% 13% 12%
10 17%
11%
0 5% 4% 4% 7% 6%
1% 0% 0% 2% 2% 1%
Type of Code Apr ⁄ May ⁄ Jun ⁄ Jul ⁄ Aug ⁄ Sep ⁄ Oct ⁄ Nov ⁄ Dec ⁄ Jan ⁄ Feb ⁄ Mar
BEE 1
Digimarc 5 29 8
JagTag 1 1 7 14 10 9 10 3 2 3 3
MSFT Tag 136 176 94 88 152 109 145 226 105 72 57 69
QR 157 217 279 175 202 343 433 440 502 244 359 493
SpyderLynk 7 1 40 5 14 1 24
WIMO 1 1 2 2
AR 3 1
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4. Uses for Action Codes During Q1
Video: 35%
E-Commerce: 21%
Opt-in/Subscribe/Sweeps: 20% $
Social Media: 18% $
Store Locator: 11%
It is now rare Coupon: 8%
for a magazine
Photo Gallery: 7%
reader to be sent
to a desktop-style Downloads: 7%
web site after Recipes: 2%
scanning a code. Voting: 0%
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.
style web site after scanning a code. mobile campaigns. Our qualitative analysis
Advertisers and editors are creating mobile is that most action codes were used for one
P4 experiences designed to engage the reader or more of the following four purposes:
while they are reading the magazine.
• Branding and Demonstrations: By
Video continues to be the top mobile far, the largest usage for action codes
experience launched by an action code. was to showcase a video (35%). These
E-commerce, sweepstakes and social media videos are often created specifically for
are the next most common uses, with each mobile use. Examples include:
being around 20%. The rankings remain • A behind-the-scenes look
very similar to last quarter: • A product demonstration
• A how-to video
Engagement Q4 2011 Q1 2012 • An entertaining video
Video 44% 35%
Opt-in / 23% 20% • Data Capture and List Building (Opt-
Sweeps ins / Subscriptions / Sweepstakes):
Social Media 16% 18% Action codes are effective for building
databases because readers can
E-commerce 19% 21% respond immediately and wherever
Store Locator 11% 11% they are reading the magazine.
Coupon 9% 8%
Sweepstakes were, by far, the largest
Photo Gallery 8% 7% contributor in this category. While a
Downloads 5% 7% sweeps can be run with just one action
Recipes 4% 2% code, there is a growing trend towards
Voting 0% 0% sweepstakes that us multiple codes
and span an entire issue with multiple
Nellymoser scanned every code, activated advertisers and editorial sections
each campaign, watched each video and participating.
completed actions requested for the
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5. “Smart Sweepstakes” are also used has a social sharing feature. These
to increase scan rates. After a user were not counted.)
scans and enters information, the
smart sweepstakes retains the user’s Top Industries and Brands
entry data from one scan to the next,
enabling instant entry and reducing About 45% of all action codes used in
the obstacles to form submission. magazines (619) came from companies in
just four industries: beauty, health, home
• Commerce (On-line Store, Brick- and fashion. These were the same top in-
and-Mortar Store Locator / Coupon): dustries as during Q4 2011. We also found
Readers can immediately scan and in our Retail Study that companies in these
About 45% of all industries led the action code use in stores.
act on a desire to purchase. Links to a
action codes used corporate e-commerce store led the
category at 21% followed by in-app Specific brands, however, have changed.
in magazines
store locators at 11%. Some store None of the top 10 brands during Q1
(619) came from appeared on the top 10 list in Q4. This
locators used the phone’s built-in GPS
companies in just to find the nearest location. quarter, the top brand was TurboTax tax
four industries: preparation software. Perhaps this is not
• Social Media: Action codes were surprising given that most of their business
beauty, health, also used to enable Facebook, Twitter is during tax season.
home and and to connect to email. In Q1, 18% of
fashion. codes enabled readers to share a video The number two brand was Tyson, which
link or product information via social in one of their campaigns, used QR codes
media. (NOTE: Only social sharing that to directly link to their Facebook page. Q4
was part of the mobile campaign was leaders L’Oreal and Bose did advertise in
included. Some video campaigns led Q1, but did not make the top 10 list.
P5 to a YouTube Channel, which in turn
Top 10 Industries and Brands
Action Codes A cti on C odes
1 Beauty 1 Turbo Tax
214 21
⁄
⁄
2 Health 2 Tyson
174 19
⁄
⁄
Home
3 3 O’Keeffe’s Working Hands
141 19
To p I n d u s t r i e s
⁄
⁄
Fashion
To p B r a n d s
4 90 4 Pandora
18
Automotive
⁄
⁄
5 81 5 Restart Fitness
17
Financial
⁄
⁄
6 63 6 Blue Buffalo
15
Food/Bev
⁄
⁄
58 7
7 It’s a 10 Haircare
Television 15
⁄
⁄
52 8
8 UPS
Jewlery 14
⁄
⁄
52
9 9 Swanson
Pharmaceutical 13
48
⁄
⁄
Luden’s, Jenny Craig, Miss Me,
10 Travel 10 Gorilla Glue, Bill Levkov Dresses
47 Source: Nellymoser 12 Source: Nellymoser
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6. Top 10 Magazine Titles Top Magazines By
Number of Codes Per Issue
The best way to determine the Top 10 Ac tion C odes P er Issu e
Magazines with action codes is to calculate
them by the number of codes per issue. 1 InStyle
18.7
⁄
This puts weeklies, momthlies and those
that skipped an issue on the same basis. 2 Brides
17.7
⁄
As in 2011, the Top 10 Magazines were 3 Teen Vogue
primarily women’s magazines and home 15.0
⁄
magazine titles. 4 This Old House
The Top 10 15.0
⁄
Magazines Action Code Text 5 Car and Driver
were primarily 12.0
⁄
In Q1, 64% of all action codes were 6 Cooking Light
women’s
accompanied by information that 12.0
⁄
magazines and described what happens after the scan. 7 Traditional Home
home magazine This is considered by many to be a best 12.0
⁄
titles practice and follows the pattern of many 8 Glamour
other calls to action. 11.7
⁄
9 Every Day With Rachel Ray
There is a clear trend moving away from 11.5
having other content around the QR code,
⁄
which is an indication of wider acceptance. 10 Shape
11.3 Source: Nellymoser
Only 17% of codes were customized and
P6 only 6% were accompanied by an icon.
Few codes were accompanied by an SMS indicate that a code crossed quadrant
campaign. boundaries.
Action Code Page Location Conclusion and Key Findings
More than 85% of action codes are placed During Q1 2012, Nellymoser reached these
on the bottom half of the page, the key conclusions based on this study:
traditional location for a call to action.
• QR codes and other types of action
The diagram on the next page divides a codes have become established in
magazine page into quadrants and shows magazine advertising. For five straight
by percentage where the action codes months, 8% to 9% of magazine ad
appeared. Numbers that overlap quadrants pages contained a code. This is up
Action Codes In Print
64% 17%
describes destination are customized
Scan to Shop
6% Get the Free App 28%
have icon From Nellymoser use color
Go To: ScanNow.mobi
Or text SCAN to 800-555-1234
3% 1.6%
have choice to use SMS have instructions to get app
Source: Nellymoser, Inc.
Nellymoser, Inc. | 11 Water Street, Arlington, MA 02476 | t: 1-781-645-1515 | questions@nellymoser.com

7. significantly from March 2011, when
3.55% of ad pages contained an action
code.
0.2% 8.9%
• QR codes are the clear market leader. 2.9%
Digimarc watermarks and SpyderLynk
SnapTags entered the market with large 1.2%
campaigns in single issues. 0%
0.1%
• Almost all action code experiences
44.4%
have been mobile-optimized. 39.9%
1.8%
More than
• Four types of campaigns dominate the
85% of action use of action codes:
Source: Nellymoser, Inc.
codes are
• Video demonstrations and
placed on the branding in just four industries: beauty, health,
bottom half of home and fashion.
• Data capture and list building.
the page
• More than 85% of action codes are
• Links to e-commerce sites and placed on the bottom half of the page.
store locators for brick-and-mortar
locations. Nellymoser intends to update this report
on a regular basis to identify trends.
• Social media sharing with links to
Facebook and Twitter. Get notifications of future updates by
• About 45% of all action codes used in following Nellymoser on Facebook at
P7 magazines (619) came from companies http://www.facebook.com/nellymoser.
About Nellymoser NFC. Nellymoser’s customers include
leading publishers, advertisers, retailers
Nellymoser, a mobile marketing and and consumer packaged goods companies.
technology company, creates instant,
interactive consumer “engagements” and Nellymoser was founded in 2000 and is
rich media apps on mobile devices, such as headquartered in Arlington, MA.
tablets and smartphones.
Scan To See Nellymoser In Action:
These engagements and apps range from
contests and product videos to interactive
multimedia engagements that can be
shared on social media (e.g., Facebook,
and Twitter) and include e-commerce for
instant product purchases. Many clients
use Nellymoser for responding to action
codes, such as 2D barcodes, QR codes,
Microsoft Tags, Digimarc watermarks and
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.
Nellymoser, Inc. | 11 Water Street, Arlington, MA 02476 | t: 1-781-645-1515 | questions@nellymoser.com

8. Mobile As Powerful
As Your Brand
Nellymoser builds and delivers highly effective and complete print-to-
mobile and print-to-social campaigns for advertisers, publishers and
brands. Our campaigns are extremely effective because we know what
has achieved the best results in hundreds of mobile campaigns for lead-
ing brands.
 We are mobile user experience (UX) experts. Our high impact
mobile experiences are dynamic and immediately accessible.
Videos look better. Nellymoser HQ Videos are configured and
 optimized in real-time to deliver the best for any phone type,
display size and network.
The Nellymoser Cloud Delivery System increases mobile
 performance, provides high availability and instantly expands
to handle peak loads.

 Social network integration enables instant Likes and social
sharing anytime and anywhere for all major social networks.
 Detailed analytics provide a complete understanding regard-
ing the effectiveness of your mobile campaign.
Each mobile campaign can be as simple as a video
shot with a hand-held camera. Or, a campaign can
be detailed, interactive and multi-purpose. We’ll use
your existing assets to create a compelling mobile
experience.
Typical campaigns include:
 Video and audio
playlists Opt-in list building
App downloads Mobile
e-commerce
Sweepstakes Directions to
and contests nearest store
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Copyright 2012 Nellymoser, Inc. All Rights Reserved. Not responsible for errors and all information is subject to change without notice.
NELLYMOSER is a trademark of Nellymoser, Inc. All other marks are the property of their respective owners.