PROVIDENCE, Utah -- Supermarket video is the targeted medium for a new and unexpected frontier -- advertising on the plastic cases used to hold video cassettes.
National Video Case Advertisers, a new company that sells advertising space on video cases, views supermarkets as the ideal retail venue for its program, especially given all the cross-marketing opportunities within the format.
While NVCA is still finalizing its plans with advertisers, the company reported almost two dozen large chains have expressed a serious interest in working with them. The chains listed by NVCA include Albertson's, Boise, Idaho, Giant Eagle, Pittsburgh, Kroger Co., Cincinnati, Meijer Inc., Grand Rapids, Mich., Publix Super Markets, Lakeland, Fla., and Safeway, Oakland, Calif.
NVCA purchases video cases, then sells advertising space on the cases to manufacturers. Often these ads contain coupons the consumer can tear off and use in the supermarket. Then, NVCA compensates supermarkets for using the special cases to hold every video in their department.
Marv Ray, president of NVCA, said supermarket video departments seemed like a natural for the program. "You have the consumer right there at the supermarket, he rents the video and gets coupons and then he's back in the store to return it. It's a great opportunity for him to use the coupon right there."
"[The supermarkets] win three times. We supply them with the video cases, and we supply them with the art work and the coupons so they sell the products. [In addition,] we compensate them for helping us with the program, " he said.
"The concept looks good. It's something that would work in our stores. And if there's a way to get some extra revenue into our stores, we're going to do it," said Gary Schloss, vice president of general merchandise for Carr Gottstein Foods, Anchorage, Alaska. He said, however, the idea for video case ads isn't exactly a new one.
"We've been contacted before by local vendors in town here. It was too small of a project, and we wouldn't get enough revenue for it," said Schloss. But with a national advertising program like NVCA's, Schloss said, the program is far more attractive.
Gregg Wright, president of Video III in Orem, Utah, said he has heard of other companies that have attempted to begin programs similar to NVCA's, but all of them have failed. He said he feels NVCA has "a better chance of pulling it off" because, compared with previous ventures, NVCA requires less maintenance and has a better financial program for participating stores.
"They've committed to pay the money up front rather than a little bit at a time, so it takes the risk out of it. So I think perhaps more people will sign up for it," said Wright.
"The opportunities they're talking about, i.e., couponing and that type of thing, play very, very well into our situation," said Larry Hage, regional supervisor for Ray's Sentry Markets, Brookings, Ore.
"The only thing I can't predict is customer acceptance [of the ads]. If I had to question what are the negatives, that would be the only negative I could really come up with. You have to convince them, 'No, we're not stuffing anything down your throat,' " Hage added. According to NVCA's Ray, customers responded positively to the video ads in test markets. He even said the test markets showed video rentals increased after the couponed-cases were introduced.
Ray also said both supermarkets and advertisers have been open-minded about the concept of video case advertising. One selling point for advertisers is that, unlike freestanding inserts and store circulars, a video case can't be thrown away.
"I think it's better than ads on the back of a checkout-register tape. I think it's better for advertisers. It's larger and it's more of a coupon-type thing," said Steve Zeigler, president of Grocer's Video Systems, Olathe, Kan., which supplies videos to 106 stores.
Ray said 35 advertisers, mostly snack-oriented manufacturers, are completing plans to rent space on NVCA's 5 million cases. NVCA has targeted manufacturers with a campaign called "Get on Our Case." NVCA charges the advertisers anywhere between $2.40 to $3 per video case and runs the ad for one year.