November 19th, 2007

What's In-Store? Lots of TV Ads

By Eric Newman
Brandweek

There are some TV networks that are thriving in the TiVo age. The catch? You have to leave your living room to see them.

By next year, TV networks inside stores like Wal-Mart and Target are projected to generate $330 million, per PQ Media, Stamford, Conn. That’s a 43% gain from $210 million the channel generated last year.

The latest entrant is Borders TV, which, in conjunction with Ripple, El Segundo, Calif., will hit 250 stores by February. Ford is already onboard with the fledgling in-store network. It is testing ads in Southern California locations that are already equipped with the television screens.

Ford isn’t alone. This holiday season, everyone from Ocean Spray cranberry sauce to the U.S. Navy will broadcast its message to shoppers.

“This alternative media has the ability to reach target audiences more effectively, especially in the era of ad-skipping,” said Leo Kivijarv, vp-research at PQ Media. “This media is impervious to that. When you’re in a store, you don’t have the option of turning off that screen.”

Research from Premier Retail Network, the San Francisco firm that provides television programming for Wal-Mart, shows that that in-store TV marketing generates 56% average recall versus only 21% for regular TV spots.

In 2005, Ocean Spray, a unit of PepsiCo, based in Lakeville, Mass., began testing ads on Wal-Mart’s in-store TV programming and saw an immediate uptick in business.

Ocean Spray this week releases new spots, including a current Thanksgiving campaign, on the entire Wal-Mart network before the creative hits network television.

“Every week, 130 million consumers walk through Wal-Mart stores and [advertising on Wal-Mart TV] definitely had a positive impact on the business,” said Ken Romanzi, COO at Ocean Spray. “We see it as a great way to get information about our new products out. It started out as a test and now it has become an absolutely integral part of our campaign [strategy].”

Marketers are increasing the amount of special content they are creating just for the in-store efforts, said Mike Quinn, PRN’s svp-marketing, research and product development. PRN brings brands like Unilever, Gillette and TracFone to Wal-Mart TV, among other in-store networks.

More than 66% of content used on the PRN network in the last 12 months was created specifically for the retail environments compared with 50% during the prior year.

Myles Romero, vp-strategic marketing and entertainment alliances at Borders Group, Ann Arbor, Mich., said Borders TV is a very attractive proposition for advertisers, “since our customers spend about an hour, on average, in our stores . . . and index with a higher education and a higher income than the average [consumer].”

Commercial Alert, meanwhile, said it is just another blatant example of unwanted ad creep. “Like a bad TV series, it should be canceled before it hits airwaves,” said Robert Weissman, managing director of the consumer advocacy group that is based in Washington. “Isn’t the bookstore the one place that people should be able to go without being assaulted by television screens and covert or overt TV ads?”

For organizations like the U.S. Navy, running an “Accelerate your life” TV ad within GameStop—as a young adult purchases the latest Call of Duty gaming title—is just about being at the right place at the right time.

Kim Norris, president of the Out of Home Video Advertising Bureau, New York, said marketers are warming to in-store TV as more consumers are spending less time at home.

The association, which launched in January, boasts a membership that represents almost 800,000 out of home screens.

Today’s consumer has adapted to reading and interchanging with screens outside of the home, given the plethora of mobile devices they use daily, said Norris: “As long as you’re providing content that is valuable to the consumer, they really do welcome screens in the environments they’re in.”

Weissman disagreed. “Placement of TV screens in unwanted places is a major growing trend as anyone who has been assaulted by TV programming or disguised advertising in an airport, hospital waiting room, checkout line or service line at a bank knows.

The addition of a service like Borders TV could backfire for the chain. “While people realistically can’t decide not to fly to avoid being bombarded by TV programming, the situation is different at a bookstore,” he said. “People can easily decide to leave the bookstore, and go to another, or buy books online.”

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