The Digital Signage Insider

Retail media measurement: can stores become a mass medium?

Published on: 2006-10-05

At-retail media measurement is the topic that just won't go away. Then again, considering that people have been debating how to measure traditional media channels for the better part of a century now, we shouldn't be surprised. But the ISMI's decision to try and come up with a new measurement standard (in conjunction with major retailers and CPGs) has increased the tempo of the conversation from "fevered pitch" to "frenzy," so once again I thought it might be helpful to look at some of the popular opinions on the matter. Fortunately, there's a tremendous amount of dialog going back and forth as to whether in-store media needs to be measured, and if so, what form that measurement should take. One of the most interesting conversations that I've seen on the topic is a recent RetailWire BrainTrust Query submitted by Laura Davis-Taylor. After a brief introduction on the ISMI's plan for building a Gross Rating Points (GRP) system for retail (similar to what's used to quantify measurements for traditional media), she poses two questions/observations that are really fundamental to the topic at hand.

Question 1: As we heard at the at-retail media conference last week, media buyers and planners want a system comparable to what they're already familiar with from the world of TV, print and radio media purchasing and tracking. If we want them to buy in to our industry (both literally and figuratively), we'll need to play by their rules. But to what extent can we really expect retailers to give these outside 3rd parties control over what messaging is shown on their sales floors?

Target, for example, is notorious for imposing extremely strict requirements on retail fixtures and POP displays, and they've even taken it upon themselves to deploy their own in-store television network instead of partnering with an outside firm. With such a tight grip on in-store merchandising, it doesn't seem likely that they'd let one or more outside agencies -- who may or may not have significant in-store media experience -- freely buy and sell space and time in their stores. Likewise, Wal-Mart recently named Saatchi X as their in-store agency of record, so it stands to reason that any decisions about retail media would have to go through them (with a healthy amount of Wal-Mart corporate oversight, no doubt). Consequently, it seems unlikely that media "standards" such as a 5, 15, or 30-second spot are likely to come about since there are so many different kinds of retail space to fill, so many vendors and retailers to please, and so many different display media to utilize (from cardboard POP displays to digital signage).

Question 2: Creative agencies and media planners and buyers are generally most comfortable working with tactics, content and media similar to their existing standard formats (think the 30-second TV spot). But as Davis-Taylor notes, "Why would we try to replicate the same old 'look at me' advertising models in-store that people are rejecting in other channels?"

Retail media offers a number of possibilities that aren't available to traditional above-the-line media, most importantly the ability to connect and interact with customers while they're actually shopping. In this environment, why not take advantage of product adjacencies to increase cross-sales, or encourage the viewer to interact with the actual product in the store, since she's already there? The old "show a recipe that features advertised products in grocery stores" schtick is almost a clich at this point, but it works (and yes, I did somehow just manage to use Yiddish and French in the same sentence). As is usually the case, the comments from the RetailWire article provide some great insights from people involved with all different aspects of marketing and merchandising. As Mark Heckman, VP of Retail Insights at Sorensen Associates notes, "Running generic 'equity advertising' to an audience that already feels time-starved and overwhelmed with signs, programs, nutritional information, and the like, will crash and burn as did the early efforts in this arena. Shoppers will only take the time to 'look up' if they regard the messaging as a consistent conveyance of relevant value." Data from several of WireSpring's customers suggests the same trend as well.

Some other great takeaways from the discussion at RetailWire: do retailers even want their stores to be poked, prodded or otherwise measured by retail media groups? Gerard More, Director of Sales for Goliath Solutions, asks this very question, and he notes that, "If they did, they would be happy to provide POS data, which they are not." With so much uncertainty about what's actually being measured, and the implications of what a measurement should be, it's not surprising the retailers have been hesitant about attempting to try and quantify things. Perhaps my favorite comment of all, though, is from James Tenser of VSN Strategies, who suggests that in-store communications should be classified in a pyramid:
  • At the base are communications that have reach only -- this is what the P.R.I.S.M. initiative has learned how to measure. This is a "page view" metric, to use a Web metaphor -- great in number but low in individual value.
  • Next up the scale are communications that stimulate some kind of interaction, but not sales. This may include pressing a touch screen for further information, taking a coupon or "take-one", trying a sample. This is a "click-through" metric, fewer in number but of greater value to marketers.
  • Next up the pyramid are communications that may be directly related to product trial or sale. This "purchase" metric will be more scarce, but even more valuable.
  • At the pinnacle are in-store communications that contribute not just to a single purchase but to enduring affective and behavioral change. We call this loyalty, and it is rarest and dearest of all.
As a marketer, I would require that all these layers be measured and modeled so that I can truly understand the ROI of my in-store communications. As a retailer hosting these messages, I would require that I get paid in accordance to the value delivered at each of these levels. As an in-store network operator, I would seek a way to justify compensation at each level as well.
These are useful, achievable items that any retailer or marketer would love to have at their disposal, and at some point in time they'll probably be required in order to assess the value of the various digital content clips, POP displays and other merchandising throughout the store. (I find cost-per-action retail ads to be a particularly interesting concept). Before all these new reporting metrics become standard, though, the retailers themselves will have to decide how much measurement they're going to allow, and I suspect that there will be several confrontations between them and their major suppliers and third-party measurement agencies (e.g. ACNielsen) before the issue is resolved. Similarly, for retail to become a "managed" medium like TV or radio, there will have to be some kind of system in place that allows for easy media planning and buying -- not so much a technological system (though there are several in the works) -- but a system of trust between retailers, CPGs, and the media planners and agencies who may not yet have the practical experience to utilize the retail media landscape to its fullest potential. But this is what will have to happen if ad-supported retail digital signage is really going to take off.

Of course, even without an accepted in-store measurement system, there will still be numerous opportunities for smaller in-store networks, private label/merchandising networks, and networks in non-retail venues to be successful, profitable and useful to viewers. But retail's much-hyped transformation into a mass medium that can be compared to -- and measured against -- traditional media will first require that these challenges be overcome. Even when that occurs, history suggests that the debate over which metric is the most accurate, or has the highest correlation with consumer behavior, or predicts some other success measure will probably go on for years. But much like web metrics have led to the evolution of pricing models based on impressions, clicks, unique visitors, and conversions, retail measurement will hopefully evolve to offer its own set of diverse options that make it possible for a wide range of marketers to generate strong ROI from their in-store media campaigns.

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