Interview: 20+ questions for JAGTAG's Dudley Fitzpatrick

small-demo-requestI recently had the opportunity to have a phone conversation and Q&A session with JAGTAG Founder and CEO Dudley Fitzpatrick. JAGTAG, for the unfamiliar, is a company that specializes in the creation of proprietary two dimensional bar codes, or JAGTAGs as they are called. These special “tags” are encoded with a variety of information—everything from URLs, to coupons to contests. JAGTAGs are similar to standard open source QR (Quick Response) codes and/or Data Matrix variations, however unlike their open source brethren, JAGTAGs require no software to be downloaded in order to decode them. You simply photograph the code with your camera phone and send it to the JAGTAG server, via MMS (or via email if you have an iPhone), where it is processed to return specific media or info directly to your mobile phone. It is a major differentiator for the company that prides itself on offering extended user reach and technical know-how. But JAGTAG also prides itself on its extensive advertising agency background and its ability to offer a more comprehensive approach to helping brands market with their technically savvy solution.

As an “ad-guy” by trade, this kind of tech is of particular interest to me in that it can simplify a lot of mobile user interaction with brands, but I still had some questions lingering in my mind. I caught up with Dudley and he was kind enough to answer some 24 or more questions about their tags and the marketplace for them.

In your own words, what exactly is a JAGTAG?

It was born out of our agency (which I thought you might appreciate). Basically in early 2006 we first got exposed to 2D barcodes. We were trying to figure out how we could help a newspaper company attach their physical paper to their online content and that’s the first time we ever discovered that ‘wow, there’s this cool new medium coming to the United States in which the brand can use their own assets and turn their own packaging and product and advertising and point of sale into their own medium instead of having to give their money to other media companies.’ We were really big in utility marketing and consumer requested stuff instead of ‘push’ and we saw those things together and thought ‘man, this category of being able to make every advertisers asset an on-demand media channel is going to be the biggest thing to happen, for brands, since the internet.’ We got pretty hopped up about it and as we looked more at the market, we just felt like, in the United States specifically, that an application based system that had to be downloaded prior to use was not going to be a good short-term solution for brands.

We were worried that [having to download a QR code reading application] would create negative brand engagement and there wouldn’t be any reach. So we thought, ‘hmmm what if we could eliminate that barrier.’ We started realizing that MMS was coming soon and if we created the world’s first MMS enabled 2D bar code solution and could make every camera phone work instantly without the need for a download then we’ve solved one of the biggest issues around consumer trial and reach for the brand [with regard to 2D barcodes]. The initial inspiration for the product was (a.) the magnitude of the category and then (b.) the opportunity to create a better solution for the advertiser than an application based system that was not pre-manufactured into the device.

So that’s an overview. We felt like there was this amazing category out there and the issue was that it was trying to be served by technologists that didn’t really design their system around a brand’s or consumer’s needs.

One of your main differentiators is that there is no client side app. That makes it easier for users correct?

Yes, but it’s not just ease—it’s ease and reach. The latest numbers we have are that 60% of people under 35 habitually take and send [mobile] pictures here in the United States. So you could argue that 60% of the market already does the behavior that we require. I think that outside of iPhones (we can’t find a number) but we have surmised that about 1% of the market will download and app [to a mobile device]. With iPhones included, that might be about 6% of the market will download an app. So if 6% of the market will download an app and 60% takes and sends pictures then arguably we have 10 times the reach of an application based 2D barcode system.

There is no application required—that’s one benefit—but because there is no app how does that affect JAGTAG with regard to location-based initiatives.

One of the primary ways we can bring value to the ecosystem is by understanding what’s going on in the immediate environment of the person that’s making the request, so location based understanding is at the forefront of our long-term strategy. It’s a requirement for us. In the short term, interestingly enough, we can get a lot of that out of the tag itself, because we can put different tags in different places. So we can do some geo-understanding based on the tags. The other biggest benefit that we have is that we are also a wonderful measurability tool. We enable brands to measure the relative value of their media because we put a different tag on every piece of source media based on how the brand wants us to and we can tell them ‘hey, this is what’s happening with packaging that came out of CVS versus packaging that came out of Wal-Mart—this is what’s happening with your ad in TIME Inc. versus your ad in Newsweek—this is what’s happening if you’re a manufacturer at your point of sale from one store to another.’ One of our greatest immediate values is we give brands the ability to measure media that they’ve never been able to measure before. They’ve never been able to measure print, they’ve never been able to measure out-door, they’ve never been able to measure event marketing. We don’t give them exact impression data, but we give them relative data, because if I run the same ad in TIME and Newsweek and I get three times as many requests out of TIME than I do Newsweek, then I can pretty much assume that TIME is a better medium for [the brand] and [the brand’s] consumers than Newsweek is. We have 900 million tags by the way.

Out there right now?

That’s how many different combinations there are in our current code-reading schema.

If sheer ease of use could help get you guys get ahead and dominate the U.S. market for 2D bar codes in the short term, what is your plan for sustaining that system in the long term against a swiftly growing list of technologies vying for that same space in object hyper linking and beyond.

Normally, the people with the money control an ecosystem—either the people with the money or the people who have the customers—so our long term strategy is to satisfy the brands immediately and to continue to evolve to satisfy the brands needs in the future. So we are building a category and the category will move and we plan on moving as the category moves.

What do you mean by “the category”?

The category of being able to give the consumer the opportunity to access a brand, anywhere and in any way they want directly off of physical objects. I am hesitating to answer your question because I’m trying to figure out how much of our long term strategy do I want to share with the market. We will have long term value within the value chain of  content delivery based on object-based code-triggered, consumer requested communications.

I will tell you one thing, and I’m not touting our product—I’m touting the category. When brands get a taste in their mouth for not having to give their money to media companies but [rather] are able to turn their own properties into media channels…that’s a really big thing for them. You think about Wal-Mart and Six Flags… they are brands that reach an awful lot of people, and the fact that they can now turn every asset that they have into a media channel for themselves or for other people—I think this whole category is going to shift the whole way people look at media, because suddenly every brick wall at Burger King is now [like] a TV screen and now Burger King can have more impressions than traditional media does.

As mentioned, there are a lot of competing technologies out there. Things like “contactless” RFID enabled phones, virtual geo-locational tagging, and computer vision services. Those technologies are evolving as we speak. Do you see JAGTAG taking a step into any of those kinds of technologies?

We see ourselves being very fluid within any object-based, code-triggered, consumer-requested-via-mobile technology. So, RFID, SMS, image recognition, traditional 2D barcodes…we have a strategy for adding value within any of those immediate and long term technologies.

Do you operate as a custom shop too? For example, if a brand came to you and said “this is not in your offering but we want to do x, y or z”? Would you take on a custom job in that way?

We will, but right now were doing that more within our immediate core-capability of our tag.

Are JAGTAGs color sensitive like Microsoft tags?
No, everything gets converted to a grayscale.

Coming from a graphic design background, I noticed that there is an aesthetic quality to JAGTAGs that is different from other QR codes. Did you all Design it?

We designed and developed it in house. Interestingly our early business models were based on QR codes because it is open source. But cameras aren’t good enough to be able to take a picture of it. In many instances, when we do testing, it appears that we are actually reading better than an application based systems. We also can be much smaller; we can go down as small as a half-inch by a half-inch. You mentioned the design, and it is an aesthetic design, but it’s really the only code that doesn’t have adjoining objects. In most of the other codes, their black and white fields touch each other, and that created problems when you take a picture of it. The dots [in a JAGTAG] are designed to increase code reading because when they get compressed and sent over an MMS they don’t touch. That code is the only code we know of that was designed to actually have a picture taken of it and sent via MMS. All the other codes are designed to be read by an application.

I wanted to ask you about scalability. You said there are 900 million possible JAGTAG combinations right now. Data Matrix codes, however, are essentially, infinitely scalable—you can just keep stacking them next to each other to make a larger code to get more data. So when you do reach 900 million can you make a JAGTAG larger? What will you do then?

They can be recycled, because we could re-issued earlier tags that have expired, but really by the time we would reach 900 million we would have updated the code to have more combinations. We may be an application-based system by then. We do believe that in the future we will be an application based system. But what we really believe is that brands right now—that an application-based system right now does not give brands or consumers what then need.

Tell me about your SellToMe offering. I notice you have a suite of several services. I looked at them all and SellToMe seemed the “sexiest” and I mean sexy in terms of enabling impulse mobile commerce. I wondered if you could explain a little bit about how it would work—if I understood it correctly, a person would see a tag and could buy whatever that is, right there on the spot.

We’re working thru that with partners right now. The first stages will be that basically we can deliver an operator based sale and an Internet based sale—those will be the two primary areas that we move into. It’s probably not as exciting as you might imagine in the immediate future.

Can we go back to Metrics for a minute? I know brands are typically extremely concerned about metrics. One way you described the metrics offering of JAGTAG is that they are, in one sense, “old school” in that the tags are actually in physical locations and can be tracked as such. The sheer location of the tag can be meaningful alone. Is there more that differentiates your metrics offering than just that?

Yes, but they are more long term. We have some proprietary systems. In the short term we have source media tracking.

Will JAGTAG technology work in other countries?

Right now we’re focused on the U.S. and it feels like we have the greatest immediate opportunity here, but anywhere where a carrier enables two-way MMS we can instantly integrate. So any country where that is currently established, we can get up and running in no time. But our current focus is providing value to brands and consumers in the United States.

Can you explain to me, specifically, how rich media experiences are returned via JAGTAG. Someone takes a picture of a tag, sends it via MMS to the server, it is processed and then what? Does it return an actual video or does it return a link to a video that the user watches in a browser? Can you explain?

We are currently commercially approved with the carriers we run on [Verizon and AT&T], for returning WAP links, MMS and SMS. The majority of our business will be returning MMS and when we return an MMS we are actually returning video, multiple pictures and audio directly into the phone. So while we can support a mobile web solution,  we believe that 20% of the world accesses the mobile web and 80% do not and we believe that an MMS return, in most instances, is easier to use and much lower cost to the consumer than a mobile web based return. Our reach goes thru the roof when we return MMS. With an MMS input we get device information. Basically, that is the big difference. So because we have device information, we understand the media player of the phone and the screen size and we optimize that return based on that phone’s specific requirements. That’s really our big home run, right. So when you make a request off your phone, we know exactly what your device is. And when you have an SMS input, you don’t have that understanding. The way some other people do that is they send out a WAP link and try to understand the device off the WAP link.

Then would you say that smart phones are your market, because these could be heavy data media files correct? And that would presuppose that the person downloading does have an unlimited data plan in order to really download this kind of stuff all the time. Unlimited data plans seem to be more closely associated with smart phones.

You know, we would say that our market is smart phones and dumb phones [regular feature phones, like a Motorola RAZR]. An MMS return works wonderfully on a smart phone or a dumb phone. So it’s that extra reach that we’re bringing to the market. Let’s say you wanted to show a video highlight to everyone that clicked in Sports Illustrated. Well, if you rely on the mobile web only, you’ve reached 20% of their audience and if you rely on MMS you’ve reached 100% of their audience.

So what you are saying is that if a person has a “dumb phone” and they don’t have an appropriate player to play back a video then you would send what back to them?

We would know that and would send them a message to the effect of ‘sorry your phone cannot play video, but here is something else from the brand instead.’

Ok, so you sniff out the phone type and there is a payoff, for the consumer, one way or the other, depending on their phone.

Right. We don’t even really sniff it out. The carrier gives it to us.

Can you capture other data about the user other than their phone number?

We receive the phone number, the image and device information.

You don’t collect profile-type info from the user? Or do you?

We don’t transfer individual consumer data to the brand unless the user has requested it be sent.

Is every JAGTAG that is photographed and sent in to the server considered an “opt in” then?

Yes, every request is an “opt in” as long as the source material is clear about that.

I read on Mashable not too long ago where Dana Oshiro had listed 5 possible uses for QR codes. Things like, green ticketing, etc. Obviously you have your product offering and that says something about where you think tagging is going, but can you give me a little insight into what you all think is the future of this technology, outside of where it is today?

Well really it’s still not established today [laughs]. You know, the current IS the future.

That’s a good point.

Really the future is our current product offering.

Right. That is, outside of Japan, where this kind of thing has been going on for years. I guess we just look at whatever was going on in Japan 2 years ago, to find out what will be hip here in 3 more years.

I hear everyone talking about personalized tags—that every consumer has their own tag. Eventually you attach user-generated content to a tag and that person can share their personal best when they go to see someone else. For example in a conversation, one person asks another ‘hey are you a very good skateboarder? Well here, take a picture of the code on my board and watch my videos to find out?’ I think that is certainly a future.

I also believe that whoever is closest to the consumer will be able to use tags to create new media channels for themselves that they can charge other people money to use. Kind of like the current way retail circulars work or the way that sports teams use billboards inside a concourse to charge their sponsors to reach their consumers.  [Like those older models], one of the things I think is going to happen is that once geographic locations or venues or retail stores become ‘mediums’, I think that the owners of these physical footprints will be able to establish all kinds of revenue streams via their ‘bricks and mortar.’ I think one of the big huge shifts will be that places like Starbucks will become a medium for all kinds of stuff beyond their own properties and products. If you think about it today—if you take media as a consumer impression—Wal-Mart, Target, McDonalds, Burger King—everyday they reach many more people, I would surmise, than the New York Times does. So when you get in to a ‘physical world connection’ those are the future media properties. It’s crazy. If you look around your room right now, everything in your room is a media channel. The table is a media channel. The wall is a media channel. So whoever owns the physical source materials now owns the media channel. It’s a crazy idea to think that every object in the world becomes the media channel either for that object to market to somebody or for that object to generate revenue from someone else who wants to market thru that object.

I agree. It’s a fascinating concept. It even gets deeper when you think about it geolocationally… that step beyond when people are vying to purchase coordinates in 3 dimensional space to place their ad in so that when users walk into that space with their GPS enabled phone, they are automatically served an ad. I mean, it doesn’t have to be an ad… we are surrounded by a world of information and the point where the physical world meests this nebulous informational world is really interesting.

Right. For example, what am I doing right now? I see something in the real world and then I have to go online and then I have to find it [in order to get information about it]. But with this technology, anything I see in life I can instantly find out more about. Anything you want to know about the object you are interacting with, you can find out. That’s literally how it can be.

Is there anything else you’d like to tell me about JAGTAG that we haven’t covered?

I would just want to reiterate our main advantage to anyone considering using a 2D barcode today, which is that our technology literally has 10 times the reach of any other 2D barcode. We are the only 2D barcode that doesn’t require the consumer to download an application, prior to use. Also if anyone is considering returning multimedia to a mobile phone, we are the only real way to do it to a mass mobile audience. You can’t do it with Text2Get (because it doesn’t understand the device ID) and as long as you’re dependent on mobile web, you only reach 20% of the market.

Another thing I’d like brands out there to know is that they can now send gorgeous video, they can now send gorgeous looking multiple images of their products, they can now send that to almost as many people as they can send text to. I’d also like brands to know that if they are considering a traditional image recognition solution, that they can accomplish the same thing with us but they can also measure the media.

And you all have worked with many brands already, correct?

Yes, we have run programs with Sony PlayStation, Red Bull, Nike, Cleveland Cavaliers, Qdoba. One last thing I’d really like to explain about JAGTAG is that one of our core competencies (because we come out of the advertising community) is that we understand how to use the technology to accomplish marketing goals, objectives and programs, unlike some companies entrenched only in the technology side who may have more of an attitude like ‘here’s the technology—YOU figure it out.’ We’re not like that. We’re a really good partner in terms of figuring out and guaranteeing that the program along with the technology succeeds. We are agency people here to help other agency people do great things for their brands.