Can’t Help But See TV
By George Anderson
If NBC is “Must See TV,” then Wal-Mart’s has the “Can’t Help But See TV” network in its stores, especially since it began replacing the small sets it used to have suspended over shoppers’ heads with 42-inch high-definition models.
A report in the New York Times says, with 130 million viewers watching it every four weeks, Wal-Mart TV is the fifth largest network in the U.S. behind the broadcast giants NBC, CBS, ABC and Fox.
According to a study conducted by Nielsen Media Research, shoppers in Wal-Mart stores spent an average of seven minutes per visit watching the televisions in the stores.
This is especially good news for advertisers on the Wal-Mart network who pay up to $292,000 to air a single commercial over a four-week period.
A number of advertisers such as Frito-Lay have been increasing their budget for Wal-Mart TV. Haston Lewis, a vice president at Frito-Lay, said, “We want to be on the cutting edge of identifying and leveraging the most effective vehicles to capture consumers. The reality is, unlike 40 or 50 years ago, more and more of your customers are shopping at Wal-Mart. So they have become a new medium to reach consumers.”
Moderator’s Comment: What is your view on the upside potential and limits of Wal-Mart’s television network and other in-store marketing vehicles used
in other outlets?
The desire of marketers to find a way to cut through the advertising clutter and more directly influence consumer shopping behavior is not something new.
As a result, many are looking to communicate selling messages to consumers as close to the point of purchasing decision as possible through a variety of
in-store marketing vehicles. In a recent RetailWire Instant Poll (see RW 2/16/05,
Consumers Hate Spam But Buy Anyway), 64 percent of respondents said in-store
marketing was the most effective means for creating a direct response from consumers. –
George Anderson – Moderator
I believe that advertising and promotion on in-store television networks is going to grow dramatically. As EVP and CFO of a company that produces in-store TV networks, we see increasing demand by retailers for TV’s in their stores and, as James Tenser mentioned, ROI is measurable (and incidentally, impressively high).
We have been producing in-store TV networks for retailers since 1998. Over the years we have used independent third parties to measure the results and have found the following:
• Unaided brand recall of ads playing in-store is triple that of conventional television,
• Sales increase both for the products promoted on the network and for the store as a whole,
• Programming on the network increases consumer interaction with sales associates,
• Customer closing or conversion ratios increase, and
• Customized content can be produced in a manner so that shoppers can hear and understand the message even if they don’t stop to watch the television monitor.
In-store television is a win-win for all parties. The retailer enhances its store ambience, while simultaneously increasing sales and creating a new source of revenues from advertisers on the network. Product marketers advertising on in-store television networks actually reach customers while they are making purchase decisions and the results of the ad campaigns can be measured. Lastly, the customer wins by having better information and a more pleasant shopping experience. One other attribute of a private television network when compared to just running commercial television content in-store is that the retailer can make sure that the competitor’s ads are never running in their stores.
When I first read the statistics on Wal-Mart’s in-store network a while back, I found it difficult to believe that all of the “watching” described was active. That said, in these days of advertising-zapping technology and over-saturated viewing choices, there is a lot to be said for PASSIVE intake. Another example of Wal-Mart positioning itself as the recipient of abundant dollars in a category that needs more bang for the buck (this time, advertising). Brilliant.
We’ve been talking about the store as media for quite some time, and this just ratchets it up another notch. Many infomercials on TV are a lot better than the TV programming, so with a captive and very large audience, Wal-Mart will clearly do well. I’ve also been hearing a bit lately about how in-store announcements can be extremely powerful. As long as it doesn’t get obnoxious or too in-your-face, it’s probably a good idea. But I’d be measuring response carefully.
If the shoppers visit is finite, and I believe it is, then spending seven minutes watching a broadcast is seven minutes they are not shopping.
Simply because you have x number of broadcast points and y number of shoppers does not mean it equates to viewers or the effectiveness of the broadcasts translating into spending.
I would really want to be shown proven results before I’d want to be on the cutting edge of this one. But then again when you have the budget of Frito-Lay, you can make some mistakes.
Art Williams, thou doth speak the truth. My guess echoes yours, that a considerable amount of the CPG support for WM’s in-store network is to please WM buyers, merchandisers, and category managers. But goodness, would WM stoop to coercion to generate support for a fledgling project? Ask their suppliers about the RFID project.
I always return to the same question when considering in-store video: Are there convenient places in stores where customers can congregate and pause long enough to enjoy the show without clogging shopping aisles (checkout lines don’t count)? Further, how does in-store video advertising help shoppers meet their objective of getting in and out quickly, and the espoused (though disingenuous) aim of retailers to help them do the same?
There are plenty of questions about how advertisers should value the divided customer attention they gain from an in-store video network like the one in Wal-Mart. I find the statistic of seven minutes average attention rather dubious. Maybe the bigger screens will persuade us to stop and pay attention at first, but I doubt the novelty will last.
On the other hand, perhaps the relative value of an in-store media buy looks good compared with the alternatives. Even if shoppers “tune out” the messages on the screens in store, they also do the same – or worse, from the advertiser’s perspective – in their family rooms at home.
To me, what’s intriguing about the Wal-Mart network is the potential to correlate an on-screen promotional message with subsequent sales lift at the checkouts. ROI is an elusive metric for advertising media. Here, the in-store channel may have an edge.
There is no doubt that Art hits a nerve when he questions whether the primary purpose of Wal-Mart TV purchases is to gain leverage in getting displays. But what’s new? Remember when we used to buy FSI’s because they leveraged display in supermarkets?
But in-store marketing of all types is here to stay as the primary lever for CPG marketers. There is simply too much choice and brand switching, too much impulse purchase and too much message clutter in other media to have it be otherwise. So the trick is the same as always…”How to get the most effective messaging into the media to maximize bang for the buck?”
With in-store advertising, the secret can be found in other retailers (Cabelas and BassPro are two excellent examples) who have successfully used in-store video for years. The message must be educational and informative to the target. This doesn’t have to mean an on screen “demo” with a professional chef. It does mean relevant and engaging messages about the benefits and use of the product.
Simple message advertising, particularly that which communicates some sort of current special offer, will certainly work to move volume. And I suspect this type of tactical messaging will dominate what we see early on as this media will be evaluated as “Promotion or Trade” rather than “Advertising” by most brand marketers. The winners long term will understand how to use this medium to build brand equity.
AAAAGGHHHH…can you hear me screaming? Probably not over the noise of big speakers blasting out different messages from adjoining aisles. Sideshow barkers or what? Intrusive or what? Get me out of here. I may not be a celebrity but there is no way I could voluntarily subject myself to such aural abuse.
Considering the number of occasions on which RW contributors have commented that shoppers just want to get in and out of stores fast, faster and fastest, this gimmick for keeping them there longer and having them stand around taking up space and blocking the aisles for those who don’t want to watch seems contradictory and counter-intuitive to say the least. And then to say that this is what customers WANT???!!!
As for the poor staff, I suppose this is where David is going to say if they don’t like it, they should go and work elsewhere (if there’s anywhere left nearby, that is). Then again, as he also maintains that most of Wal Mart’s staff are the dregs of the employment market, I suppose most of them wouldn’t really be bothered by it.
If the idea is to entertain the kids, as the shopper quoted suggests – or anyone else for that matter – the screens should be in a separate area of the store, not high-traffic sections.
Bernice, I visited this store in Pearland that the story was based on. Often, when other stores have tried this, I see too many employees standing around, looking up and watching TV. I didn’t see that at Wal-Mart. Maybe if they had Jerry Springer on, they would be more interested.
This could be just the beginning of Wal-Mart getting into all kinds of media. Currently, they have an audio program that plays in most of their stores. I hope to see them expand beyond that.
This probably varies somewhat with the product, but in-store signs and especially displays have an outstanding track record with food products. This is particularly true if it is done in conjunction with TV and other media advertising. In-store TV would have to further heighten the impulse, but I wouldn’t trade it for an in-store display. I can’t help but wonder how much the purchase of in-store TV is to please Wal-Mart buyers more than it actually pays for itself in traditional means? They have so much time to fill and sell that anyone that buys TV time may receive special treatment. Even as hard as W-M tries to be objective and not allow itself to be influenced, it seems like this problem would be nearly unavoidable.