In-store electronic marketing is really taking off. Here's the evidence:
Catalina Marketing has installed its system in more than 7,500 stores.
Thirty-three percent of retailers are now involved in preferred-customer programs, and that number is climbing rapidly.
Substantial portions of manufacturer budgets are being shifted to in-store promotions.
"Measured Marketing" is being presented to top executives at the Food Marketing Institute's Midwinter Executive Conference.
Electronic marketing, however, has stayed pretty much in the hands of the retailers, manufacturers and system vendors. Where are the ad agencies in this picture? My company works with both manufacturers and retailers to help them evaluate and implement various forms of electronic marketing, and I rarely see agency representatives in those meetings. I've even made presentations to a few agencies, to persuade them to get educated on electronic marketing.
They listen to my presentations, agree that electronic marketing is a significant wave of the future, that they should be more involved, and that they will lose a lot of money when in-store electronic marketing starts replacing traditional advertising. But none of them wanted to spend any money to learn about it or to get involved. Why?
One, the agencies say they don't have any money for learning about electronic marketing. The way the budgets of many ad agencies are structured, all their money comes from their current manufacturer clients via the media providers. The agencies don't have those kind of deals with the electronic marketing vendors, so they don't have any money for learning about new things. (So why don't they make some deals with those vendors?)
Two, the agencies say that manufacturers have people in-house who deal directly with electronic marketing vendors, so the ad agencies really aren't needed. (I think they'd be a lot more needed if the agencies understood the in-store media.)
In the end, agencies agree that their lack of involvement with electronic marketing will take away a substantial portion of their income. They say that's what happened with freestanding inserts, and it's probably going to happen again. I say, with a confused look, "What?"
Agencies really need to focus on this area, or they eventually will lose substantial business in the food industry. Agencies should become experts in in-store promotion, helping manufacturers decide what electronic marketing programs to support based on how effective the programs are (meaning, of course, that they need to know how effective they are); making deals with retailers for program participation; designing creative for manufacturers' direct mail, and in-store targeting through the retailer programs. Agencies should be working with electronic marketing vendors to understand their offerings and how information can be used to help their clients. And agencies should be working with retailer clients to decide what frequency programs to implement; to help them sell manufacturers on participation; developing collateral for program promotion, and designing creative for direct-mail programs that are based on frequent-shopper data. Otherwise, the agencies might get lost in the shuffle of electronic in-store marketing.