BrainTrust Query: Does the surge in shopper media mean a sea change for brands?

Discussion
Aug 02, 2006
James Tenser

By James Tenser, Principal, VSN Strategies


The Wal-Mart Network has said its 390 million-plus monthly shopper traffic represents the largest media audience in America. Operated by San Francisco-based Premier Retail Networks, its 125,000 in-store video screens rake in an estimated $100 million in annual ad revenues from consumer brands.


A new multimedia in-store network now in test at Kroger stores claims a potential 68 million weekly shoppers when rollout is complete to 2,500 stores. In-Store Broadcasting Networks, Salt Lake City, is building the network.


Flat panel video installations located in about 1,000 Albertsons stores deliver messages to some 10 million shopping households in a four-week flight. SignStorey, Fairfield, CT operates the network.


Digital and networked media are popping up in all sorts of retail environments – from the flat video panels now gracing some Simon Properties shopping malls – to the gas pump islands at convenience stores – to the elevator cabs at major hotels – to the large screens in sports bars – the TV walls in large electronics stores – to the shelves, aisles, floors, carts and checkout lanes of supermarkets and mass retailers.


In recent months, the industry has been edgy with talk about planned shifts in media spending – away from so-called “traditional” media like TV and print, and toward the new breed of shopper media networks that put the message right at the point of decision. The mantra is “in-store activation” and the ad agency business is on high alert. Rightly concerned that an important fraction of media billings may be relocated outside their comfort zone, several large agencies have acquired or established units with special focus on at-retail media. WPP Group, Grey and Saatchi lead the pack


For the marketers charged with the care and custody of brands, this fast-changing media environment poses several great challenges. One, making apples-to-apples comparisons of in-store audiences with at-home audiences is a non-trivial undertaking. Two, in-store activation implies a need to measure effectiveness well beyond frequency and reach – to a true ROI. Three, new know-how is required for brand marketers to optimize the marketing mix.


Discussion Questions: Does the present expansion of shopper media mean a lasting change is coming in the way brands come to market? What does this mean
for “conventional” advertising media? Will gross rating points lose their meaning to ROI-based measures?


For the past two decades, I’ve repeated to all who can stand to listen that “the retail store is a communications environment for brand messages.” It seems
this has never been more true. Innovators are preparing to launch shelf-edge and shopping cart based devices in hundreds of store, tavern and hospitality environments as we speak


Not only are significant dollars migrating from conventional media budgets into the retail environment, but significant efforts are being made to quantify
the payback from at-retail advertising. These range from the conventional (GRP measures) to the esoteric (marketing mix modeling).


I submit that brand stewards and their agencies are facing a discontinuous professional moment. They need to get very smart about shopper media, very fast.

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15 Comments on "BrainTrust Query: Does the surge in shopper media mean a sea change for brands?"


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Bernice Hurst
Guest
14 years 7 months ago

Sorry, James, but I got a headache just reading this – “One, making apples-to-apples comparisons of in-store audiences with at-home audiences is a non-trivial undertaking. Two, in-store activation implies a need to measure effectiveness well beyond frequency and reach – to a true ROI. Three, new know-how is required for brand marketers to optimize the marketing mix.” I’m definitely “facing a discontinuous professional moment”. What I really really think this will all lead to is an increase in shopping online with customers being so fed up with messages bombarding them everywhere, “communicating” with them about brands, that they will stay home plugged into their ipods and computers and never hit the mall again.

William Dupre
Guest
14 years 7 months ago

Advertiser participation is, and always has been the key to the success of these programs. Look at the “bleached bones” in this space: SavingsSpot, ISA, VideOcart, InterAct, Checkout Channel (funded by Turner) and many more. This is still an unproven space for third party media companies. The cost of implementation usually exceeds the revenue opportunity. Advertiser participation has been lean due to higher expectations for incremental sales than traditional advertising. Just because an ad is displayed in a store doesn’t mean you will sell more product.

Yet, advertisers expect promotion results from ad content. Speaking of content, there are such things as bad ads, even in-store. I read recently that there was concern regarding the “actual eyeball” numbers for the Wal-Mart network (extremely low ad recognition). Shopper count should be used as circulation numbers for ad media purposes. (Newspapers don’t pay for only those readers that turn to page 27, for example.)

There needs to be a true measurement system to level expectations and only then will this space will take off.

John Morgan
Guest
John Morgan
14 years 7 months ago

There are two major obsticles facing retail media. The first is audience measurement. Until a syndicated service is available to provide measures of shopper traffic, every vendor is left to theorize our own methods of estimating Gross Impressions.

The second is the perception that retail media is a promotional spend. Most brand managers simply don’t understand the equity potential of retail media. If by communicating to consumers in the retail space we can influence their purchase in one store, they may also change their purchase in another store tomorrow based on the message they received.

Herb Sorensen
Guest
14 years 7 months ago
In terms of media metrics, there are three essential measures: how many people actually see the media (exposures), how many are impacted by what they see (impressions), and how many of these lead to actual sales. There are good reasons why the industry has come to rely on “pretend” metrics like “opportunity to see” (OTS) but scientific study of media requires actual metering, not maybes. The issue of how much media will work is a serious problem in most stores, particularly anything like supermarkets, drug stores, convenience stores, etc. These markets are already heavily invested in “commercial surfaces.” Bear in mind that most packaging is heavy advertising, too. If you examine the commercial share of a shopper’s field of vision, when they are shopping in one of those long, center-of-store aisles, the commercial share of their field of vision is about 80%. Additional media will have to compete with that 80%, or further shrink the non-commercial 20% share. For the wide-vision perimeter areas, the commercial share is nearer 50%. This obviously provides a better opportunity… Read more »
M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
14 years 7 months ago
What is the audience for the Statue Of Liberty, the Eiffel Tower, the Palace of Versailles, or the pyramids of Egypt? Simply put, “you takes a number and you waits in line,” and you wouldn’t appreciate a bunch of advertising accompanying your wait. Such things are somehow appreciated in Times Square and the Las Vegas strip, but in our supermarkets? So-called “shopper media” is problematic and mostly ephemeral. As a supermarket veteran, I know that my kith-and-kin will do anything for a buck. It’s the nature of the beast. So they have, over decades, accepted venture-capital dollars to allow installation of “teevee” screens in various parts of their stores. It’s Chuck E. Cheese lite, and failures litter the landscape. How can supermarket video presentations provide anything helpful? What good are they? Supermarkets depend on free-flowing traffic. How do cute video presentations in the unused corners of supermarkets increase traffic or traffic flow? How do they work without audio and, if they provide audio, how annoying are they to customers and employees? Companies have been destroyed… Read more »
Frank Beurskens
Guest
14 years 7 months ago
All shopper-media is not created equally. After discussing in-store media a few weeks ago with our favorite wine store manager, he asked if we noticed the TV screen overhead. What TV screen we replied? We’ve visited this store for several years. He said it’s been there for several years. The channel provider went bankrupt a while ago. It was free to the store. In-store, in the aisle is a brutal, cluttered, distracting environment for attracting shopper attention capable of building brand without bribery. Traditional time based advertising often depends on the consumer’s acceptance of a brand message at time and place chosen by the seller, not the shopper. The couch at home might be suitable for un-requested digital interventions, but pushing a cart at 6PM while trying to imagine a meal in minutes out of a raw piece of meat doesn’t create quite the same atmosphere as the couch for brand building. Lasting change will result in part from sustainable, interactive in-store media capable of placing the shopper in control of the experience. Whether it’s… Read more »
Anna Murray
Guest
Anna Murray
14 years 7 months ago
One word: e-Ink. Many technophiles are currently drooling over Sony’s eReader, soon to come to market. It is based on e-Ink technology, developed at MIT media labs. Many people will poo-poo the resurfacing of the eBook topic. But wait. e-Ink is different. Imagine if you will a piece of paper that has inside of it little molecules. Imagine each molecule has a black side and a white side. We’re talking zeros and ones. An electronic charge tells the “paper” which side to display. Oila! Text. The thing about this text is that it’s not based on light-emitting technology, but rather light *reflecting* technology. Like ink and paper. What does this mean? It means, first of all that an e-Ink page is readable in the brightest sunlight. Second, the page can be rendered at 2000 dpi at cheap cost. Third, it is reusable. All you have to do is send different instructions and the page changes. The eReader device from Sony will be black and white. But color is soon to come. I see every shelf-talker… Read more »
Mark Lilien
Guest
14 years 7 months ago

Traditionally, in-store media were seen as short-term sales builders and broadcast media were seen as longer-term brand builders. Impact of former had a simple measure: sales gains. Impact of the latter was measured by awareness. But many advertisers have tried using both media types nontraditionally, attempting broadcast sales promotions and in-store brand-building. Media placement that can prove sales increases will always be highly valued. Even though the in-store media implies great effectiveness, the awful clutter makes that claim increasingly unlikely.

Translation: shoppers can ignore Wal-Mart’s TV screens just like they ignore TV ads at home, depending on the message quality. When the proportion of junk messages gets too high, shoppers won’t pay any attention to the in-store screens. If you get 1,000 spam e-mails a month, even if 2 of them might be worthwhile, will you even see those 2? Or will you just throw out all the spam?

Bill Bittner
Guest
Bill Bittner
14 years 7 months ago
Brand managers face a daunting task as the number of communication channels explodes and the lack of “free time” makes it necessary to reach consumers where they play. The consumer’s favorite activity may be video games, live music and sports, chat rooms, and finally the old couch potatoes who want their entertainment handed to them. As people continue to pursue diverse activities it becomes more difficult to build a brand that both the motor cycle club and the quilters anonymous can identify with. The one place all these people come together is at the “shelf edge.” Whether it is a virtual shelf provided by some online shopping experience or a real shelf in the store, this is where the consumer comes into direct contact with the choices manufacturers offer. While I don’t think enough information can be provided at the shelf to change the mind of a satisfied user, there are two motivations that can cause them to try something new. An out of stock condition is a perfect opportunity for another manufacturer to get… Read more »
Kenneth A. Grady
Guest
Kenneth A. Grady
14 years 7 months ago
There is no question that we are seeing several significant shifts in media patterns. The shift to in-store media is an important one, as is the shift to Internet. There probably will be a great rush to expand the use of in-store media, if for no other reason than cutting edge geekiness. (We can do it, so why not?) The in-store media push may affect the buying decision at the traditional point-of-purchase moment, though clutter and confusion will negate some of the effects. Measuring ROI will be easier at first, and then will become much more difficult as the clutter grows. Many retail environments already are models of confusion. Those retailers who think through how the in-store media should mesh with the rest of the in-store environment – to help and not overwhelm the customer – will use this approach well. The other critical element will be how the customer is drawn to the store initially. Creating an interconnection between Internet advertising and the in-store media experience (educate, then convince) will highlight an important distinction… Read more »
Paul Waldron
Guest
Paul Waldron
14 years 7 months ago

Given the importance of at-shelf consumer decision making, the fragmentation and inefficiency of traditional marketing outreach programs and the need to snuggle closer to the consumer, brands have long sought and long experimented with outreach programs in-store.

Kiosks and other in-store coupon offerings, checkout coupons systems, on-shelf signage and coupon dispensers, floor graphics – have all been used with varying degrees of impact, but usually on a in/out basis.

In our business, we have seen more and more brands engaged with messaging – image and consumer friendly text – in the ubiquitous shelf tag/strip arena at the store shelf. These tags/strips help brands communicate to the consumer about price/product/value-message as well as reassurance should the product be out of stock. They also act as a plan-o-gram place holder so employees will reorder and so other manufacturers will keep the sanctity of the well-thought-out plan-o-gram.

Bernie Slome
Guest
Bernie Slome
14 years 7 months ago

This is not a sea change for brands. Rather, it is another opportunity to connect with the consumer. Was the Internet a sea change? No, it became another vehicle for brand managers and marketers to use. Marketers will not abandon tried and true methods. Until it is proven that an existing method is not working, it will not drop.

There are always new ways to reach out and create brand awareness. Have stadium namings or golf and tennis name changes altered the way brands create identities? No, it has become an additional method. If there is ROI in a program, the brand managers and marketing departments will use it.

This is a win-win-win. For the Brand…more exposure; for the retailer…more soft dollars; for the consumer…more awareness.

Bet on the fact that there will be other innovations in the future.

Race Cowgill
Guest
Race Cowgill
14 years 7 months ago
Let’s not lose sight of the research that suggests that advertising as a whole, at least as it is done currently, is less than 10% effective. Billions of ad dollars are spent that have no positive effect whatever. Internet, in-store, text message ads — you name the latest “hot” media, and we can show you research that says most of the advertising on it is wasted. We focus so much attention on the media and who gets it and how it is delivered, and almost none, comparatively, on the ad content. But the content determines if the campaign works or not. This is another example of taking the easy way out; it’s so much harder to create a truly effective ad. So let’s say we see several dozen more media types and media-delivery technologies spring up in the next few years; I’ll wager that the ad content will be no better. More clutter, more useless campaigns. What would happen if a major brand decided to focus on content, and committed to producing and delivering only… Read more »
David Mallon
Guest
David Mallon
14 years 7 months ago
I’m glad to see such a sobering response in this assessment of in-store media. The most optimistic thing anyone should say about it is “unproven.” In-store media are getting attention simply because brands are desperate to find new ways to communicate with consumers, not because any of these in-store methods have shown results. Along with Word-of-mouth, mobile phones and various internet methods (blogs, video games, search based opo-ups, etc.), in-store is just a possibility one can hope will deliver results. Retailers will go along, because they’ve always wanted a way to tap into the ad budgets of brands, having already squeezed all the trade funds they can get. My guess is that in-store will only work when we find a way to make it so relevant to the consumer that they’ll pay attention. One possibility is tailoring messages based on loyalty card data. But, we’re a long way from anything being proven. So, the industry should focus on things that have more certain paybacks, like improving the effectiveness of trade funds. The in-store method we… Read more »
Laura Davis-Taylor
Guest
Laura Davis-Taylor
14 years 6 months ago
There are many good points in this discussion thread. In my mind, the net-net is that retail media IS upon us but, like any other media, it’s not going to be successful if it’s not utilized correctly. It must be relevant, add value and be part of a POSITIVE store experience. It can’t be created in silos, become intrusive or built upon the notion that shoppers are “captives” in our stores and therefore forced to watch it. That’s old school advertising thinking at its finest. What makes retail media interesting is, unlike the first days of the internet as a channel, media itself is changing. We are trying to make sense of it by comparing it to media metrics that really don’t matter. Reach and Frequency/GRPs…they generate a way to measure. But they are built to gauge eyeballs and not relevancy. It makes it more complex that retail media is a fine balance between merchandising and marketing and the two worlds have to come together for positive customer experiences if it’s going to get anywhere.… Read more »
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