MBP Overview: In-Store Advertising, Updated 2/21/07

In-store advertising is a medium that is hitting its stride, mirroring the overall rise in out-of-home advertising. Opportunities have increased, and big retailers such as Wal-Mart and Kroger have rolled out initiatives in recent months.

Last year, outdoor ad spend grew 7.9 percent in the third quarter of ‘05, following a 10.2 percent increase in the second quarter.

Studies have shown that in-store advertising has an impact on the purchases shoppers make: an Arbitron study in July 2006 showed that in-store audio advertising heard while shopping caused more than 40 percent of consumers to make an unexpected purchase, while 36 percent purchased a different brand than they intended.

A more recent study conducted by Nielsen Media Research that examined in-store media provided by the SignStorey video network, now broadcasting in 1,300 stores, showed that 68 percent of consumers would be swayed in their product purchasing decisions by in-store messages, while another 44 percent said they would swap a product they had planned to buy for one advertised on the network.

In-store advertising can vary greatly, depending on the type of store and the opportunities available. Grocery store chains and retailers such as Wal-Mart are beginning to offer advertisers the opportunity to advertise their products on television screens at checkout, over the audio system, or on the shelves themselves.

Other opportunities have less to do with advertising what is available in the store and are simply geared toward reaching a particular demographic. For example, AquaCell Media offers advertisers the opportunity to place ads on water coolers in pharmacies, while another, EnVision Marketing Group, is testing ads on conveyor belts in grocery stores in Southern states.

The boom comes as today’s consumers are spending more time outside of their homes than ever before, far more than any other generation. In 1960, only 8 percent of a person’s time was spent neither at home nor at work; that number has grown to 18 percent today. And new ways to reach consumers are popping up constantly.

“Every day it seems like there is a new opportunity to talk to our consumers in a place that we didn’t think of talking to them before,” says Norm Chait, vice president/director of out-of-home at MediaVest, which includes a new network of digital screens placed in front of customers at hair and nail salons. “It used to be just emery boards. Now you have a captive audience sitting in front of a screen for a half an hour at a time.”

In-store TV ads tallied nearly $100 million in 2005 revenue, marking a 45 percent increase from 2004, according to research company PQ Media. Collectively, in-store marketing approaches such as television and radio, shelf talkers, digital signage, and other point-of-purchase displays stand as the sixth largest advertising vehicle in the U.S., at $18.6 billion in spending in 2005.
The Nielsen Company recently launched Nielsen In-Store, a unit that will measure consumer exposure to in-store marketing vehicles. TNS’s acquisition of Sorensen Associates improves the company’s ability to measure in-store marketing and positions the company as a direct competitor to Nielsen In-Store.