A few weeks ago, Reveries Magazine announced a survey aimed at discovering how satisfied product manufacturers, vendors and marketers are with their current television advertising plans. Well, more specifically I suppose it was a survey about how dissatisfied they are, since most of the questions were focused around alternative marketing strategies, including in-store media. Nearly 200 respondents filled out the questionnaire, and the results are quite interesting: nearly 70% said that the effectiveness of TV advertising is getting worse, and 60% said they are "very actively" seeking alternatives to traditional media (with another 34% saying that they were experimenting with such techniques, but are not currently leaders in the space).
A growing number of marketers are upset enough by the high prices and diminishing returns of advertising on TV and other traditional media that they've started turning to alternative marketing strategies. According to the Reveries survey, a large number of respondents (81.5%) are spending more ad dollars online (between email, blogs, search engine optimization and a host of other techniques), however in-store retail marketing (including in-store TV, audio, kiosks and point-of-sale) is close behind at 72%. In-market programs and mobile media top out the list, and only 3.2% of respondents said they weren't experimenting with any non-traditional media right now. While demand for such services is high, there's a good deal of debate over whether they're worth it: less than 20% of those surveyed rated the effectiveness of these experiments as either "excellent" or "very good." Most (36.8%) categorized it as "fair," and while this is a bit discouraging at present, I'm willing to bet that it's mostly because some of the techniques are still very new, unoptimized and labor-intensive. Actually, the survey results seem to suggest that as well, since even despite these low numbers, 76% of respondents rated retail's potential as a medium for marketing as either "good," "very good" or "excellent." Interestingly, among the relatively small number of respondents that had tried in-store TV advertising, nearly 2/3 rated the results to be "as good," "better", or "much better" than expected, perhaps indicating a trend that will eventually extend to other aspects of in-store marketing.
So what are marketers hoping to accomplish with all of these new media tactics? Well, the single largest goal, not surprisingly, is to increase impulse purchases. In fact, 67.8% of respondents reported it as their primary objective. Close behind were intents to reinforce brand image (65%), improve top-of-mind brand awareness (60.1%), and forge brand connection with the shopper at the point-of-sale (57.9%). As far as measuring the effectiveness of these media, most respondents appear to be employing a number of metrics, including brand-sales impact (67.2%), the ever-popular brand recall (50.3%), ROI (40.4%) and brand-share impact (37.7%). For all of this, though, many advertisers and manufacturers are still worried about the measurement of in-store media. In fact, almost half of the respondents (46.7%) said that in-store media was no easier to measure than regular TV commercials. There were also concerns about price, visibility and timing (e.g. the impact of the message doesn't register at the first-moment-of-truth, but instead at some point before or after the viewer has already made their decision).
I was actually surprised by the number of people who cited the difficulty of measuring the impact of at-retail media as a major stumbling block. After all, most of these people live and breathe in the TV advertising world, where even after half a century there's major debate over the right way to measure anything. In fact, many popular measurement methods can only generate abstract results that are notoriously difficult to translate into any kind of meaningful ROI. Compare that to various in-store media, which, given their venue-specificity, can be studied in simple or complex retail experiments, with a known quantity of variables and a hard paper trail (namely, register receipts). Sure, it takes work to set up, but when it comes to measuring return-on-investment for advertising dollars, it's better to know than to guess.
Retail media people: what should we be learning from all of this? Advertisers and manufacturers have stated that they're willing to redirect a portion of their budgets to marketing at the point-of-sale. They've started to experiment on their own already, but have acknowledged that their results to date haven't been as spectacular as they'd like them to be. They also tell us that measurement is still too hard, and for all of its advantages, in-store media still has some hurdles left to clear (especially with regard to visibility, price and timing). So it sounds like we have a few jobs cut out for us:
First, we need to continue to refine our measurement techniques to make in-store media measurement easier, more accurate and more consistent. Actually, POPAI's Digital Signage Standards Committee just released its 1.0 spec for generating playback log files (PDF), which is an important first step towards measurement interoperability. Even with a standard method for reporting playbacks, attaching this data to register receipts can still be challenging, so we're going to need some improvements there as well. I'd also like to see somebody publish a set of de-facto instructions and conditions for running a controlled experiment in different retail venues.
Next, more research will need to be done on pricing models and standards. Considering that in the ad industry fees vary widely for everything from content creation to campaign management, this could be a pipe dream. On the other hand, though, an uncanny number of networks seem to have settled at a published rate of about $150/screen/month. While I think up until now this has been largely coincidental, perhaps it also indicates some kind of baseline price where network managers make money and advertisers feel that they're still getting a good value.
Finally, through ongoing trial-and-error experiments, we also need to figure out the relative merits of the different kinds of in-store media. POPAI has done this for static in-store displays in numerous past studies, so a precedent has already been established. Of course, somebody will still need to come forward with a pretty substantial amount of money to make the study happen, get support from multiple retailers, CPGs and service providers, handle the massive technical and logistical challenges of installing and managing a number of different digital technologies in a potentially large and changing number of locations, and run the experiments without any kind of bias. This is no easy task, and anyone following our industry in recent weeks has probably seen coverage on the numerous challenges facing those who wish to measure retail media.
Tackling these three items is going to take a lot of work and industry cooperation, but if the Reveries study is at all accurate, our efforts here really could accelerate the adoption of at-retail media. Advertisers and retailers alike are looking to industry experts to find out what works. And while we now have years of experience and can point to major successes (and failures), there are still very few hard-and-fast rules to go by -- and even fewer organized studies with which to back them up. Let's do our part to change that :)