Traffic Cops

MICHAEL GARRY

CPG companies spend around $400,000 for a 30-second commercial message on the hit TV series “Grey's Anatomy” to reach a largely female audience. But what if marketers could disseminate a message to a similar audience through a network of supermarkets, where their products are available and shoppers are primed for shopping?

Increasingly, CPG marketers are being offered that in-store opportunity through digital video screens. In 2007, the number of supermarkets with digital screens grew to 4,750 — roughly 25% of the stores in the top 50 chains — from 3,500 in 2006, according to Stephen Diorio, partner, Profitable Channels, a marketing services company in Westport, Conn. Half of the top 50 chains are either rolling out screens or have fully installed them, he said.

The screens, set up at checkout lanes, in high-traffic perimeter sections and in key Center Store aisles, feature a potpourri of recipe tips, meal preparation ideas, product information, lifestyle advice, celebrity interviews and commercials. Major screen providers include CBS Outernet (previously SignStorey), Premier Retail Networks (PRN), In-Store Broadcasting Network and NewSight Media Solutions.

While some major CPG companies have bought commercial time on in-store screens, what the in-store screens have lacked — in contrast to TV or radio broadcasts — is a neutral audience-measuring service that can provide advertisers with an objective read on the number of people being exposed to the marketing message.

The absence of that audience measurement metric has caused stores to get less attention as a marketing venue. “The store itself has never been truly considered and leveraged among the ranks of the top marketing and media tools, even though its potential reach and effectiveness equal if not surpass other traditional media vehicles,” said Steve Bratspies, senior vice president of marketing, Wal-Mart Stores, speaking in late September at the In-Store Marketing Expo in Chicago.

Working strenuously to fill that void is Nielsen In-Store, a new division of Nielsen Co., New York, which began collecting audience data from 160 stores operated by 17 retail chains on April 29. In addition to these retailers, Nielsen In-Store has partnered with 12 CPG companies and six ad agencies, as well as the In-Store Marketing Institute, in what is called the PRISM (Pioneering Research for an In-Store Metric) Consortium.

The aim of the PRISM Consortium, formed in the spring of 2006, is to create an in-store measurement standard that can be used by marketers in the same way they use Nielsen audience numbers for TV marketing and Arbitron numbers for radio marketing. The Consortium ran its first pilot last year at 10 stores without Nielsen's participation.

The in-store audience standard will apply to digital screens as well as to any other in-store marketing platform, including displays, endcaps and shelf talkers. Indeed, it could apply to the many new ways in which marketers are trying to make themselves known to shoppers in stores, such as shopping cart screens, brand ads on aisle signs and even ads that appear on freezer doors (see story, Page 36).

But digital screens could be one of the first beneficiaries of standard in-store audience measurements. “Our biggest battle is making people believe our [audience] data,” said Jeff Weidauer, vice president of marketing for CBS Outernet. “PRISM will help demonstrate that what we're saying is valid.”

Gordon Montgomery, senior vice president of network management at NewSight, observed that advertisers get a different approach to audience measurement from each of the digital screen providers serving supermarkets. “With PRISM, we will all work off the same system,” he said.

NOVEMBER RELEASE

In mid-November, Nielsen In-Store will provide PRISM Consortium members with the first large “database” of audience observations and projections, said George Wishart, global managing director for Nielsen In-Store.

In late January, the members will receive a supplementary database containing “fourth-quarter insights,” he added. An industry database, representing the standard audience numbers for participating chains, will become available in the second quarter of 2008.

Nielsen In-Store collects data electronically at participating retail stores by using bidirectional infrared sensors similar to garage door openers. The sensors, located at store entrances and aisles, are supplemented by human observations.

Nielsen's audience model not only measures traffic but can predict it in similar stores within the same chain, said David Calhoun, chairman and chief executive officer, Nielsen, speaking at the In-Store Marketing Expo. The data's predictive power (R-squared score) is 0.85 out of a possible 1.0.

“On a local level, we can now plan and anticipate the audience in the cereal aisle at 4 p.m. on a Tuesday; and on a macro level we can look across chains and regions to understand the potential of In-Store at a national level,” said Calhoun.

Nielsen In-Store is also collecting data on what marketing materials — such as digital screens, displays or shelf talkers — are present in a store, thereby establishing the level of compliance with promotional directions. “We plan to use technology that will monitor compliance for in-store TV and radio,” said Wishart. In addition, Nielsen is cataloging the number of unique “impressions,” or consumer sightings, of promotional material.

The PRISM in-store metric — the formula that will be used by agencies and marketing planners — will consist of “in-store traffic” multiplied by “in-store compliance” multiplied by “unduplicated impressions.” Wishart said that over time Nielsen In-Store will also include measures of “dwell time” spent near specific promotions such as in-store screens.

Retailers participating in the PRISM Consortium so far include Wal-Mart Stores, Safeway, Kroger, Meijer, Ahold USA and Price Chopper, among others. They have opened their stores to audience measurement and in return will receive data on their own traffic, as well as a comparison to that of other (unnamed) retailers in their market. Retailers pay no fee to the Consortium, which is supported by manufacturers, agencies and Nielsen In-Store. Wishart said other retailers, which he declined to name, have joined the Consortium recently.

Executives from two of the largest Consortium participants, Wal-Mart and Procter & Gamble, both said they saw value in the PRISM program during a session at the In-Store Marketing Expo in Chicago.

“We all know that there are activities and programs in-store, like displays, signing and other marketing materials, that are not adding value to our customers,” said Wal-Mart's Bratspies. “The richness of PRISM data will complement our organizational expertise to help us better understand what is working and what isn't — by store, by department, by aisle, by the day and even by day part.” Wal-Mart is one of the largest users of in-store digital screens, with PRN's checkout network installed at 3,150 Wal-Mart stores.

Nielsen In-Store's Wishart estimated that about $250 million in trade dollars are being channeled to digital signs — a relatively small slice of the $18.6 billion total spent in supermarkets on trade promotions. But with the advent of standard audience measurements, the in-store media is starting to be seen as a “brand-building opportunity,” with the potential to draw from the pool of traditional media (TV and radio) dollars earmarked for that purpose, said Peter Hoyt, executive director, In-Store Marketing Institute, Skokie, Ill. “That's the big win.”

“Certainly, I would expect marketing investments to change because of PRISM, but those changes will be based on facts — facts that are transparent, independent and reliable,” said Bratspies.

Bob McDonald, chief operating officer, Procter & Gamble, Cincinnati, also expects changes in how marketers approach in-store media. “By taking this data and aligning it against the cost of specific physical in-store executions, we are going to be able to establish CPM — the cost per thousand — to reach those shoppers in a particular category and by store,” he said. “You are even going to be able to establish ROI by geography — what works better in Florida than in Illinois — or even ROI by seasonality.”

SUPERVALU STUDY

Besides Nielsen In-Store, other efforts have been made to determine the efficacy of in-store signs. Minneapolis-based Supervalu, for example, has worked with DS-IQ, Bellevue, Wash., an independent in-store media assessment firm, to evaluate the effect of digital screens installed at more than 1,000 stores in its Albertsons division. The screens in perishables sections are managed by CBS Outernet, and checkout screens are managed by PRN.

The In-Store Marketing Institute reported in June on a digital screen campaign Supervalu ran for eight weeks in 746 stores during the fourth quarter of last year. The report said sales of a featured product increased by a small amount, but “the family of brands grew even more [6.8% lift],” and the “whole category went up 11 times what the single product went up,” said CBS Outernet's Weidauer, then director of brand advertising for Supervalu.

Weidauer also said that two 15-second ads on the screens were more effective than one 30-second ad, according to the report. Weidauer told SN that the studies also showed minimal sales cannibalization and indicated that a lot of shoppers stayed loyal to a category after the promotion was over. Supervalu was able to see those patterns because it leveraged loyalty card data that identified groups of shoppers based on their spending habits. Supervalu declined to comment.

Meijer, Grand Rapids, Mich., has installed digital screens from NewSight Media Solutions, New York, in 101 stores, with plans to have them in all 182 stores by the end of the first quarter, said NewSight's Montgomery. About 20 screens are in each store, in two-thirds of checkout lanes, plus one in pharmacy and four to five in perimeter and Center Store departments.

NewSight also works with DS-IQ to “match up [screen] play logs with POS data,” said Montgomery. “We tell the advertiser how much incremental sales they got as a result of the screen ad.” As in most digital screen scenarios, the retailer typically pays no fees and receives a cut of the ad revenue for allowing NewSight to place its screens in stores.

Hoyt of the In-Store Marketing Institute observed that marketers may wish to use a hybrid metric for in-store campaigns that combines standard measures of audience impressions with sales lift — an opportunity that doesn't exist with broadcast TV. “Retail is closer to the sale, so it's about impressions and sales,” he said.

As part of the PRISM project, retailers and marketers have access to “closure rates” — the percentage of shoppers who not only visited a category but purchased a product from its shelves.