The Digital Signage Insider

Where do ad agencies stand with at-retail media?

Published on: 0000-00-00

If April's AdAge article has told us anything about how ad agencies feel about in-store marketing, it's that many firms have not given it the respect it deserves.  And if the responses to the original article (including the letter from POPAI President/CEO Dick Blatt) tell us anything else, it's that people in the retail marketing industry are working to remedy the problem.  While it's unlikely that one little article will derail the in-store marketing movement (in both static and digital forms), it still seems like the big agencies have done very little to establish their position one way or the other.  Sure, all of the big conglomerates have agencies that focus exclusively on below-the-line tactics (including in-store, direct mail, data mining, etc.), but there's no clear powerhouse in the industry as of yet.  This is especially surprising given that some of the biggest advertisers in the world, like P&G and Unilever, have conducted extensive surveys on the effectiveness of in-store marketing and stated that they will be spending more marketing dollars on in-store media, while research firms like Arbitron have found that shoppers are receptive to at-retail media.  And the trend isn't just limited to the US.  Just the other day, one Canadian newspaper noticed that while "TV advertising showed the slowest growth, increasing just 1 per cent, according to Nielsen... spending on out-of-home advertising grew by 14 per cent."

In the past twelve months, though, the conglomerates have started to respond, with WPP taking the lead, in my opinion.  At the 2005 Marketing Innovation Summit, WPP Chairman Sir Martin Sorrell predicted "a major shift in how and where marketers communicate with consumers". Around the same time, WPP subsidiary Mediaedge:CIA completed a candid study on advertising inside grocery stores.

Meanwhile, Madison Avenue firm R/GA (a member of Interpublic Group) got into digital signage on a different scale, managing a huge interactive screen in Times Square with content for Reuters, Yahoo! And Nike.  Later in 2005, Canadian media giant St. Joseph's jumped into the digital retailing business when they announced that spinoff firm Alchemy would be handling a digital signage trial for OfficeMax. Mediaedge:CIA also launched an in-store division, to be operated under the MEC Retail moniker, which will presumably focus on helping clients position their messages across the growing landscape of in-store networks. And given their expertise in more traditional at-retail marketing, it would be no surprise to see Grey's G2 Worldwide or J. Brown get more involved with dynamic in-store media.

Most recently, DW+Partners founder Don Watts announced the formation of INNOVUS, a group within the independent firm that will deal exclusively with in-store advertising, including digital media and space planning.  What's interesting about this is that a number of DW+Partners customers (including A&P and Wal-Mart) already have some sort of digital signage network in place, or participate on said networks as advertisers or brand partners.  So, DW+P could be looking for new revenue streams by either managing these networks as a turnkey solution, providing expertise on implementing them as part of a broader in-store marketing plan, or perhaps even serving as a liaison to organize media buys across their clients' networks.

I'm glad to see more agencies getting involved with non-traditional advertising techniques, but I think we're still missing that big, singular event that will convince the big firms to embrace in-store and place-based media.  It's too bad, really.  With no dominant players and a market full of innovative solutions, there's room for a handful of big agencies to establish themselves as powerful and persuasive forces in the industry.  And while I can understand how nobody would want to be the first to potentially cannibalize their lucrative above-the-line media deals, the need to expand into other media, particularly out-of-home, is becoming increasingly more obvious.  I don't think that any one firm or group has a clear advantage over any other right now, though WPP does seem to have a bit of an early lead.  For each one of the agencies that I listed above, I'm sure that there are ten or twenty others experimenting with at-retail media for their retailer or brand clients, and I think we'll see some truly unique and innovative projects coming from small, medium, and yes, even large agencies in the latter half of this year.  Along the way, it will be interesting to see whether opposition to this new medium continues to stifle broader acceptance, or if in-store media finally gains enough mindshare to be considered an appropriate and logical use of clients' marketing dollars.

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