Dan Wagner is out to change advertising and e-commerce by making even old-media ads like print, radio and outdoor instantly clickable and shoppable. And he's close to pulling it off.
The CEO of U.K.-based Powa Technologies says he has 1,200 brands in North America, Western Europe and South Africa poised to use his PowaTags in ads starting this summer. The tags are QR-code-like images embedded on magazine, outdoor or in-store ads (or inaudible audio signals in TV and radio ads) accessed by mobile apps that instantly place advertised items in shopping carts for checkout.
The PowaTag app also stores payment information, addresses and other contact details. So while Powa sometimes gets pigeonholed as a mobile wallet, it's also ad-tech and a universal shopping cart. The technology could make Powa the middleman for the entire marketing world-linking marketers, media, retailers and consumers-and allow it to collect small tolls from advertisers and brands along the way.
"We're the veneer that fits between the consumer and the brand and the retailer and makes things easier," Mr. Wagner said. "If we can do that at hardly any cost to the advertiser, then there's nothing to stand in the way of adoption. The credit card firms like it. The banks like it. The retailers like it. The brands like it. And the media owners love it."
So does investment firm Wellington Management, whose nearly $160 million of funding has given Powa a $2.7 billion valuation. One big advertiser, L'Oréal USA, has publicly said it will try PowaTag, though it's yet to reveal exactly how.
But to succeed Mr. Wagner will need to change consumer behavior and scale a wall of doubt built by decades of ambitious interactive advertising schemes that never quite lived up to the hype. Remember those once-ubiquitous QR codes? Or Canoe, the interactive TV ad venture joined by six leading cable companies that never quite convinced people to actually interact with ads?
Powa is different, as Mr. Wagner sees it.
"When you wake up one morning and open your magazine and see PowaTags on the ads, or walk into the street and see them on posters, or watch TV and see it has PowaTag audio to get special offers to buy, or walk into a physical store and see PowaTags on the shelves, then we've won," Mr. Wagner said. "This mobile engagement war, this wallet war, we've won it. When we go live this summer with over 1,200 brands all over the world, that's going to have a huge impact."
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Less dramatically, people woke up one morning in April and found an ad in the May issue of Cosmopolitan for BigSexyHair hair spray with a "Scan to Buy" PowaTag that let them instantly purchase the product and get a free mini can for their trouble.
"We got a few orders," said Jennifer Weiderman, VP-marketing and education of Sexy Hair. Part of the hurdle is the education aspect of her job: People need to learn about and download the app before they can place orders at SexyHair.com. "I think it's only going to get bigger," Ms. Weiderman added, and she plans to give the technology another try down the road.
Print and radio, which never had similar capabilities, could be among the areas most affected by PowaTag. Even print catalogs or brochures can offer instant-ordering capabilities. PowaTag also allows the many e-commerce players that lack Amazon's widely used mobile app a universal shopping cart and instant-order capability, helping level the playing field, Mr. Wagner said.
Of course, the basic question is whether people will click. Tepid receptions for QR codes and interactive TV ads are cautionary tales, and after two decades of readily clickable digital banner ads, people still click less than 0.2% of the time, per DoubleClick data.
Powa does offer something those other clicks don't-a single app that lets people instantly buy and pay for what they see at any participating retailer, get more information or offers, or register warranties.
"We haven't seen any second-screen stuff work yet" as an advertising back channel, said Mitch Oscar, president of media consultancy HocusFocus and veteran of Carat. After disappointment with interactive ad system Canoe, cable and satellite operators are more focused on programmatic trading, he said.
Even when interactive TV ads work, some advertisers aren't happy, Mr. Oscar added.
"People who own the TV commercials don't want the experience of one commercial bleeding into the other," he said. "So if you can't do all this in 30 seconds, you're diminishing the next commercial."
Assuming PowaTag succeeds on TV and fuels network ads, cable and satellite operators might block the auditory signals if they don't get a cut of the action, Mr. Oscar said.
Those operators have their own plans. Comcast, for example, is testing an extension of its X1 service that could let people buy products directly from content providers or advertisers.
Delivery Agent, a California tech company that works with Comcast and others, uses Samsung SmartTVs, Roku and other devices to allow interactive offers from TV ads for brands that include Toyota and Dunkin' Donuts.
Using their remotes, people click on such ads 0.25% to 7% of the time, said Delivery Agent Chairman-CEO Mike Fitzsimmons, rates comparable to or better than other direct-response vehicles.
Then there's plan B: media research. Given that click rates vary widely among programs, Mr. Fitzsimmons sees potential to use his system for media-effectiveness research.
Canoe survives and is doing similar work. Mr. Wagner believes PowaTag could someday play a similar role across a much wider media universe-though changing the way people respond to ads is still first on the agenda.