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Mall Advertising Booms, Has Room to Grow

Mall developers have begun to reach out aggressively to media buyers, offering increased media opportunities, in order to supplement cash flow.

Though rent from retailers continues to make up the largest portion of revenue, mall developers are generating extra cash flow from advertising, writes the Indianapolis Star. For malls, the selling point is critical mass. For example, malls owned by Indianapolis-based Simon Property Group sees 2.4 billion visitors annually - four to five times more than the total attendance at all professional and college sports events nationwide, according to the company’s CMO.

Simon Property Group’s revenue from sponsorships, media and marketing events has climbed 79 percent since 2003, and the deals have generated such good results that the company is now offering naming rights to sponsors, according to the article.

Part of the reason malls are reaching out so aggressively to advertisers is the fact that mall traffic has declined 30 percent in the past decade. Developers have to be creative to supplement revenue. Some in the industry say the advertising strategy is more effective than television or billboards because consumers are in the buying mindset and are in a place where they can make purchases.

According to Stanley Eichelbaum, president of Cincinnati-based Marketing Developments, advertising dollars make up 37 to 38 percent of a mall’s total revenue in Latin American and Middle Eastern countries. In the U.S., those figures hover just below 10 percent, which indicates that the industry may still be in its infancy.