Retailers run in-store ads to captivate consumers

An advertising monitor in the Foodtown supermarket in Newmarket. Picture / Kenny Rodger

New Zealand is about to get two new television networks - but their viewers will be at the checkout, not at home on the couch.

Supermarket giant Progressive Enterprises has given the go-ahead for a "narrowcasting" network run by Digital Media Networks in its Foodtown and Woolworths stores after a lengthy trial.

Meanwhile, Life Pharmacy is rolling out a network operated by OpenEye Displays after positive results from a pilot project.

Internationally such networks -sometimes also called captive audience networks- have elevated retailers into the media big league.

In the US, the New York Times reported this year that advertisers had paid up to US$292,000 for a single ad slot running over four weeks on WalMart TV - now the fifth-largest television network in the country.

WalMart's network operator, Premier Retail Networks, said this month that it planned to add a new channel, Checkout TV, to play local programming and information as well as advertising.

Digital Media Networks director Mark Levene said the company had reached an agreement with Progressive to have a network branded Rush Media in 10 stores before Christmas, with 12 more added by April. All will be in Auckland.

"Then we've got the option to install in all of the Foodtown and Woolworths stores around the country," said Levene, who plans to have about 1100 screens across Progressive's stores by late next year.

Each supermarket will have about 12 screens, running silent but moving ads at the entrance, mid-store and at the checkout.

Levene said the trial at Foodtown in the 277 mall in Newmarket generated positive response from customers and advertisers.

"It is the first time an advertiser has been able to get in front of a buying customer two minutes before they make their buying decision with anything other than a static ad."

Case studies prepared by DMN found that had a significant influence on behaviour. An energy drink being discounted experienced a 146 per cent increase in sales at the 277 store, compared with a 70 per cent increase at the Foodtown on Quay St, which had no screens. A cereal advertised with a special offer on the pack saw sales soar 224 per cent at Newmarket, against a 32 per cent increase at a Greenlane supermarket.

"We're quite excited about it," said Total Media chief executive Martin Gillman, whose company buys advertising space on behalf of advertisers. "It's a market which is crying out for more impact at the point of sale."

Gareth Croy, a director of OpenEye, said the three-store pilot for Life Pharmacy had found that 78 per cent of viewers thought the network improved the shopping experience and 49 per cent said they would be more likely to buy a product if they had seen it on the screens.

"We've just done a fourth store in Queensgate in Wellington and we're rolling out slowly," said Croy.

While DMN's Rush Media will interact directly with advertisers, OpenEye is the network operator only, with the retailer providing the content through its relationships with suppliers.

Life Pharmacy marketing and merchandise manager Grant Febery said he expected that the network would be in 10 high-traffic stores within a year.

"We feel around 10 stores would be worthwhile for us to maintain the cost [of putting together the content] and get the benefits."

But the technology was getting cheaper-and that could drive change.

"The reality is within five years the technology will be so cheap so as to be almost retail standard."

In Britain, a survey by industry watcher AKA.TV found that narrowcasting media companies estimated their business was worth about 10 million to 15 million ($25 million to $38 million) a year, and was roughly doubling each year.

Tesco TV, a network operating in supermarket giant Tesco, was named as one of the industry flagships, while companies that had advertised using the new media included Virgin, Vodafone, Ford and consumer goods giants Procter & Gamble and Unilever.

Check this out

* The networks -sometimes also called captive audience networks- have elevated retailers into the media big league overseas.

* In the US, advertisers paid up to US$292,000 for a single ad slot running over four weeks on Wal Mart TV.

* Wal Mart TV is now the fifth-largest television network in the country.

* It plans to add a new channel, Checkout TV, to play local programming and information as well as advertising.