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Wal-Mart: In-Store Media is the Most Important Channel

Author: Bill Gerba on 2006-05-06 16:00:49

I promise I haven't suddenly joined the Advertising Age staff, but for the third time in recent weeks, they've published an article that is highly relevant to the narrowcasting industry, so I'll continue to write about them.  Perhaps this is the beginning of a new order.  Perhaps people are really starting to catch on.  Or, perhaps this week's article is all about Wal-Mart, and when Wal-Mart (whose $578M advertising contract is currently up for grabs) speaks, we all must listen.  So what are they saying now?  Well, according to John Fleming, Wal-Mart's Executive VP and Chief Marketing Officer, "The most important media channel that we have is our store."

Wow.  That's a big endorsement from a company who commands an increasingly large percentage of American shoppers these days, and a huge vote of confidence for those of us working on at-retail media projects.  Of course, Ad Age remains somewhat skeptical about the whole business of marketing in stores, a position they staked out recently by saying that in-store media is a waste of money.  In fact, their opening paragraph reads, "As other marketers and industry observers continue to debate whether stores can effectively function as media channels, Wal-Mart has adjusted its advertising strategies in a way that assumes that fact to be true."  So first Unilever (with its research on shopping trip management), then P&G (with its first-moment-of-truth), and now Wal-Mart have all talked about the importance of retail media.  And in the meanwhile, Target, Costco, Best Buy and dozens of others have gone and implemented advanced digital retailing networks.  But Ad Age keeps raising doubts about whether in-store media is effective, despite what the key players in consumer packaged goods, big box retail, and savvy marketing groups already seem to know.

Wal-Mart is chief among the proponents of in-store media, and continues to be quite bullish on the prospects of the whole "store-as-media" concept, evidenced by Fleming's statement that "while the company continues to value and rethink its advertising mix in other traditional channels, 'our primary focus is using the store as a media channel and figuring out ways to add to the customer experience but give them the information that they need to make good product decisions.'" This is a particularly timely statement given that Wal-Mart Mexico has just announced they will deploy a multi-channel digital signage network in their 300 Mexican superstores.  Even more interestingly, the network will be managed by Grupo Televisa, the definitive media juggernaut of the Spanish-speaking world.  Considering how much clout these two companies have in Latin America, it will be very interesting to see how they leverage the in-store network to accomplish various marketing goals.

Not that it's surprising that Wal-Mart and its competitors have continued to sharpen their in-store marketing skills.  While I briefly thought all of the hullabaloo surrounding TiVo and commercial skipping was dying down, CNN Money and Fortune both carried a recent article about the media's growing fear over TV commercial evasion technologies, and Yahoo! featured another on just how much the TV industry stands to lose because of it.  But the potential solution posed by this article isn't new or even particularly high tech.  Instead, it's a new spin on a very old concept: product placement.  While it's always fun to go watch old movies where the protagonist takes a few seconds out of the plot line to shamelessly promote some product, this form of advertising might come to the forefront in prime-time TV, since it's much harder to edit out than regular "inserted" commercials.  Plus, with new product placement brokers like NextMedium teaming up with partners like Nielsen to provide metrics, reporting and - most importantly - a marketplace to link sellers and buyers of product placement "spots," the major logistical stumbling block that has kept this sort of thing from larger adoption has now been largely removed.

As expected, traditional above-the-line media will continue to find ways to persevere, even as new and competing formats like in-store media continue to gain acceptance with consumer brands and retailers alike.  While we're all still experimenting to see what works best in the retail environment (and we probably always will be, if the past 150 years of advertising history are anything to go by), we'll continue to find that people are responsive to different kinds of messages, in different places, at different times of day, and while taking part in different activities.  And actually, that's one of the things that continues to excite me about delivering messages through digital signage and other forms of electronic place-based media: with the ability to control what gets shown when and where, we have a greater ability to reach people with relevant and useful messaging than ever before -- even customizing our messages on a place-by-place basis.

The goal of any good in-store media program should be to give consumers "the information that they need to make good product decisions", as Wal-Mart's Fleming suggests.  With this in mind, the marketer's ability to understand consumers and their needs during each phase of the buying cycle will be perhaps the single most important factor to watch as in-store ads continue to evolve into a more respected medium.

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