Major media in shopping aisle (page 1 of 4)

Karim Sabbagh, a partner at Booz & Company, explained:

"Everybody has to shop, so the store is the last place where mass marketing exists. Even better, you are reaching people who are declared shoppers. They're there for a purpose."

Marketers, retailers, and media companies have attempted to make in-store advertising a bigger part of the marketing mix with more sophisticated vehicles than traditional cardboard displays or coupons. Today, video ads in stores are more targeted than ever, with programming aimed at particular shoppers, on the basis of where they are stand¬ing in the store, the promotions on nearby displays, and the time of day.

Some stores have intelligent shopping carts that direct customers to specific products, based on what they scan into their cart; while next generation in-store advertising will allow shoppers to request information via their mobile phones or kiosks that provide product advice, help consumers make choices, and make it eas¬ier for people to find what they're looking for.

Most of these in store experiences currently only exist in prototypes. To become ubiquitous, the media and marketing ecosystem - marketers, agencies, media companies, and technology companies - must address three important challenges. Marketers and retailers must find the right mix of creative content and technology to reach consumers in a meaningful way. Second, the metrics that measure in-store advertising effectiveness need to reach the same level of sophistication and standardization that exist with more established media. Finally, marketers must integrate in-store advertising programs with other promotions and media campaigns.

"As these are addressed, in-store advertising will transform the retail environment and the advertising industry, and will reconfigure marketers' advertising budgets, their overall approach, and some of their strategic assumptions about reaching consumers," explained Gabriel Chahine, a partner at Booz & Company.

The State of the Store:

Advertising spending in traditional media grew by less than 2 percent annually during 2006/ 2007 while online advertising spends grew by more than 20 percent annually. The Web takes more advertising dollars than cable TV or radio, demonstrating marketers' desire for greater targeting, interaction with consumers, and measurability. A similar trend is the move from so-called measured media, such as advertising, to "below-the-line" marketing categories, which already tops spending for most product categories in the US, and is growing more than three times as quickly, with 6 percent annual growth.

In-store advertising promises to attract substantial marketing investment as it transforms the way brands interact with consumers. Since people make most purchase decisions at the shelf, in-store advertising will reach them just before the "moment of truth". "In-store advertising can increase the effectiveness of a marketing campaign by "activating" promotions and sponsorships by making them click in consumers' minds," stated Sabbagh.

Today, marketers can advertise on in-store video networks spanning thousands of screens that reach more consumers than major broadcast networks. These ads can increasingly be targeted to a specific aisle or a specific time of day, while targeting by geographic market will allow more granular delivery of marketing messages, reaching specific sets of consumers with the greatest likelihood of buying the product, based on income and demographics.