Not too long ago, Simon Properties and Publicis Groupe announced the deployment of the OnSpot Network, an in-mall narrowcast system comprising some 2,000 digital signs in 50 high-traffic shopping malls. Intended to reach the estimated 500 million visitors that pass through Simon's top malls each year, the network was noteworthy for being a) the first time Simon has made a significant commitment towards deploying mall-wide digital signage (beyond just plasma screens at the welcome desks), and b) the first time one of the major media holding companies got serious about narrowcasting.
While the network is still being deployed to a number of sites, the International Council of Shopping Centers released an interesting article about OnSpot's progress and intent earlier this month. By the look of it, mall property owners like Simon may be starting to think of their malls and shopping centers not just as destinations to be visited, but also as media to be consumed. And why not? Anybody who has braved their local shopping mall during the holiday season already knows the lengths that many mall retailers will go to in order to get a visitor's attention. The mall has become a feast for the senses, and retailers will use sights, sounds, tastes, smells and touches - that's right, all 5 of them - to lure shoppers. Though the Simon malls already feature numerous static advertising opportunities, OnSpot was deployed in late 2004 to test whether a moving image could help advertisers break through all of the sensory clutter and more effectively communicate their message to visitors. With the in-mall environment approaching an almost Disney-esque sensory overload during the high shopping season, OnSpot began polling nearly 600 shoppers to see what they thought of the screens. Overall, the results were positive, with nearly everybody agreeing that the screens gave the malls a more high-tech look, and most (70%) saying they were glad the screens were there and that they were entertaining.
Spurred on by that success, Simon and Publicis plan to experiment with the kind of content shown on their network, which right now is just a 10 minute loop of ads and longer-format content. The ICSC article contemplates whether shoppers would be willing to watch a narrowcast of an American Idol concert tour, and while Wal-Mart has had success with this kind of promotion (e.g. with sales of Britney Spears albums after her live concert played on Wal-Mart TV), I suspect that the average mall-goer would be more interested in learning about the latest sales, demos and promotions going on than sit and watch TV in the food court. And apparently I'm not alone in this sentiment, as Adspace Networks' William Ketcham noted that, "most people tend to think weather and news is what people want to see on the screens [at the mall]. But we've done a lot of research, and we know that in fact what people want to see is what's on sale. They are there to shop. It's like a sport."
Adspace has been in the mall signage business for a while, so I'd certainly listen to what they have to say. They've come up with a couple of really clever ideas for selecting promo content for each screen -- including a "Today's Top Ten" program showing the current specials in each mall -- and they've recently expanded to reach a bigger audience in more shopping malls. However, we also know that a screen is only doing its job when it's being watched. To that end, a certain amount of non-advertising content (like a few brief news or weather clips) can do a world of good to catch the attention of ad-shy shoppers. In fact, down here in the Southern states where hurricanes are an ever-looming threat, Wal-Mart has experimented with running severe weather alerts on their network, both as a public service and also as a way to encourage shoppers to glance at the screens from time to time. By making them a more essential part of the shopping trip (i.e. by providing useful information), Wal-Mart can reduce or eliminate the inherent intrusive aspect of the screens while making them even more of a focal point. Of course, the placement and positioning of the displays can have a significant impact on the sort of content that customers are willing to watch: a 2 minute weather update might garner a lot more viewers in the checkout lanes (when customers are mostly stationary) than in a crowded cereal aisle (where they're looking to pick up their products and move on with the rest of their shopping list).
I have to admit that I'm still skeptical about the viability of a digital signage business model that focuses on growing sales and exposure for advertised products, but places the screens outside the actual retailer itself (such as in mall common areas). Sure, companies like Adspace and juggernaut partnerships like OnSpot can carve out a niche - the former because of its experience with the marketplace and media sales, the latter because of... well... owning the relevant real estate, lots of media buy and sell connections, relationships with the CPGs, and of course gobs and gobs of cash. But newer companies seeking to enter this area of the market seem to have had a tough time making in-mall digital signage work. Maybe it's the fact that patrons are in "browse" mode instead of "buy" mode while walking the halls of a crowded shopping mall, and this translates to a smaller conversion rate for advertisers. Or perhaps its the audience's heterogeneity - the very thing that makes mall concourse networks so appealing - that is proving to be the sticking point.
Whatever it is, though, it will need to be figured out before we see a lot of success in this arena. But the gauntlet has been thrown down: with the partnership between Simon and Publicis in full swing, companies like General Growth Partners, Westfield, WPP and Omnicom will all need to sit up and take note of how the OnSpot network performs. (Granted, Westfield already has a relationship with Adspace, so perhaps they're ahead of the game.) Smaller REITs and agency groups will continue to gain a toe-hold in the market as well, especially while the secret formula for advertising to mall shoppers continues to be concocted and refined. As Adspace's Ketcham notes, it's hard to resist paying $2 CPM for a demographic that might cost $25 on TV. And as long as that continues to be true, we'll keep seeing companies hard at work trying to unlock the secret to in-mall signage success.