Excerpted from Strategy+Business, “Major Media in the Shopping Aisle” by M.Egol and C. Vollmer, Jan 12, 2009
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Marketers are using digital and video technology to reach shoppers at the moment that matters most … During the last few years, marketers, retailers, and media companies have intensified efforts to increase the impact of in-store advertising and make it a bigger part of the marketing mix …
A few numbers make it easier to see the growth potential of in-store media. Advertising spending in traditional media … grew by less than 2% annually during 2006 and 2007. But spending for online advertising grew by more than 20% annually … This shift reflects marketers’ desire for greater targeting, interaction with consumers, and measurability — all qualities offered by in-store media.
A similarly significant trend is the movement away from so-called measured media, such as advertising … to “below-the-line” marketing categories such as promotions, loyalty programs, word-of-mouth, events, and any form of retail store display or shopper marketing …
Within the realm of below-the-line marketing, in-store advertising promises to attract substantial marketing dollars, for a number of reasons. First … Since people make most purchase decisions at the shelf, in-store advertising allows marketers to reach them just before the “first moment of truth”, when they pick up the product. Second, in-store advertising can increase the effectiveness of the rest of a marketing campaign, “activating” promotions and sponsorships by making them click in consumers’ minds …
Today, marketers can run ads on in-store video networks spanning thousands of screens in retail stores … these ads reach more consumers than the major broadcast networks [and] can increasingly be targeted to a specific aisle in the store …
The money to fuel in-store advertising’s dramatic growth will come from several sources … The growth in in-store advertising does not represent a zero-sum game; it often signifies an expansion in the overall pie … True, some of this spending has come at the expense of traditional television budgets or out-of-home budgets for non-digital ads, such as static billboards, but a significant share is incremental …
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For the promise of in-store advertising to be realized, several challenges need to be addressed.
• Targeting Today, the same ad is typically broadcast to every aisle across a chain. But some retailers are experimenting with in-store video advertising that achieves a level of personalization and focus unmatched by broadcast and cable TV, because messages can be customized by store aisle, time of day, and neighborhood to better target specific shopping occasions …
• Quality of engagement … To counter the perception that the higher production values of home television make brands look better than retail store displays ever could, in-store video ad networks will need to develop research that demonstrates the ad recall and influence of their campaigns. They will need to show that the ads have an impact on consumers; that they are complementary to ads running on traditional broadcast and cable TV; and that they can represent an essential part of an integrated campaign …
• Accountability … Until recently, there were no standard metrics for audience delivery that could serve as the currency to negotiate ad sales contracts or to optimize the performance of campaigns … Although existing research efforts are helpful in demonstrating the value of in-store media, they don’t provide the systematic, standard sets of metrics that are available for more established media …
• Brand integration. Finally, there is significant potential for CPG manufacturers to integrate their brands more effectively into the store. Video ads, for example, may refer consumers to other products, in the same way that Amazon.com currently suggests complementary titles to its book buyers. Marketers can also weave product placements into programming to provide indirect celebrity endorsement.
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Some factors inhibiting the potential of in-store advertising are already being addressed … But this is not enough to engender an in-store revolution. The entire marketing and media ecosystem needs to tackle three key priorities.
First, marketers and their partners must create a programming model tailored to the retail environment … Marketers need to improve the way they frame their message … a better solution lies in creating programming that is developed specifically for retail stores …
Second, marketers and their partners need to better use in-store marketing efforts to upgrade promotions and analytics …
Third, integrating in-store media with the broader marketing mix will require some organizational change. Marketing organizations need to break down the traditional walls between divisions and work more directly with a diverse set of agency and media partners … It also needs to be easier for marketers to buy ad inventory by region, rather than by store or by chain … Players across the ecosystem will also need to find a common way to track and demonstrate results …
As companies address these challenges, in-store advertising will become a more valued and widespread component of marketing campaigns. Indeed, the global market for in-store video advertising is poised to take off. Leaders who take the initiative and invest in the right combination of assets and capabilities stand to reap significant rewards …
Edit by SAC
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Full Article:
http://www.strategy-business.com/resiliencereport/resilience/rr00066?tid=230&pg=all
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