Mall Advertising Goes Digital

Adrian J Cotterill, Editor-in-Chief

Interesting (and very good) article by Richard Zitrin over at Media Week, albeit very US focused, on the rise of Mall advertising that is now digital – a trend of course that we in the industry know about all to well.

Adspace, OnSpot and EYE Corp all get good mentions…

Companies such as Adspace Mall Network and OnSpot Digital Network are leading the trend toward digital conversion of their out-of-home mall inventory.

There’s a lot of discussion in media circles about the impact of digital technology, and one sector enjoying a transformation is the once sleepy domain of mall advertising. Companies such as Adspace Mall Network and OnSpot Digital Network are leading the trend toward digital conversion of their out-of-home mall inventory.

Adspace, the largest in-mall digital video advertising network in the country, has built a network of 1,389 screens in 105 shopping centers in the last several years. Plans are to be in more than 200 malls within two years. OnSpot Digital Network, a two-year-old venture of Simon Property Group and agency conglomerate Publicis Groupe, has 1,300 screens in 49 Simon malls.

Eye Corp., which has become one of the leading mall ad companies in the U.S. after only two years in the market, and long-established mall leaders Clear Channel and CBS Outdoor also see digital as a big part of the future. CBS Outdoor has digital in three of 400 malls it has contracts with. Eye Corp. plans to roll out 75 digital sign units in 10 Macerich Malls in time for the holiday season.

“It’s an area in which we’ve put a lot of investment and time. It’s going to make more and more sense as digital evolves to connect from signage into point of sale or into coupons,” says David Gibbs, CEO for Eye North America, which plans to install LCD screens on the same big, black rectangular furniture it has in high-traffic areas in malls.

Mall advertising—both static and digital signage inside the malls—is an estimated $100 million business growing at a double-digit pace, estimates Eric Steinart, senior vp of business development for Adspace. In addition to the third-party vendors selling advertising, the malls themselves are reaping big dollars with sponsorships and mall domination programs, adding another $100 million to the mix. “We’re expanding the mall revenue pie,” Steinart says. “We think a lot of newspaper dollars can come to us because we’re right at point of purchase.”

It’s not unusual to hear those in the business compare the growth of out-of-home digital with the growth of the Internet. “We’re starting to get past the point where the Internet was circa 1995, where we had a new set of technologies introduced to the marketplace,” says Mike Ribero, CEO of Reactrix Systems, a six-year-old interactive OOH media company. “We have technology now that engages a consumer in a way that allows that last impression, that last line of offense, to be as persuasive, if not even more so, than other kinds of media.”

Advertisers and major retailers such as JCPenney, Macy’s, Sephora and Barnes & Noble are increasingly warming up to digital for one simple reason: Consumers seem receptive when they are out and about. A Nielsen study conducted in 2007 for Adspace found that 47 percent of shoppers viewed its smart screens; average commercial recall was 34 percent. On average, shoppers watched one of Adspace’s screens 3.3 times for a total of two minutes, about 10 spots per visit.

“Digital is the way the industry’s going, period,” says Hanna Gryncwajg, senior vp of sales and marketing for OnSpot. “I think advertisers are going to get smart about what they want to do in the environment, creating perhaps specific advertising that works best in a particular venue, whether it’s malls, health clubs or movie theaters.”

For the fast-moving retail category, the ability to change campaigns on the fly is appealing. “With static, you’re stuck with it for four weeks,” says Jack Sullivan, senior vp, out-of-home media for Starcom. “With digital, you flip the switch, get it all up, it’s distributed across the country. Also, you can do more creatively and have a little more fun.”

Jason Kiefer, executive vp at Posterscope, says digital is attractive to advertisers who don’t have a lot of lead time. “They’re making those decisions a lot more last minute. So, for them, just to quickly e-mail and upload a creative and turnkey it in a couple days has been a positive thing,” says Kiefer, whose agency has bought Adspace inventory.

One challenge to digital mall advertising, says Rich Ament, vp of general administration for CBS Outdoor, is making the investment while waiting for the digital learning curve to be achieved. “It’s creating for it, making it work well, [and] understanding how the audience reacts to it,” Ament says. “Those kinds of things are still open questions, and once we figure them out, I think [the move to digital] will start to happen more quickly. I think this is the future—I just don’t know what the future is.”

OnSpot and Adspace both employ full-motion video, but have different approaches. Adspace’s HD plasma screens are in eight-foot panels and display a six-minute loop with advertising and original content, Today’s Top Ten, a compendium of sales and special offers in the malls, and the recently added Essentials, which showcases the best of fashion, retail and cosmetics. More than 450 retailers (double from last year) participate in Today’s Top Ten.

OnSpot’s narrowcasts combine ads with lifestyle programming from CBS and Scripps on HD plasma screens that either hang from the ceiling or on poles in food courts.

Eye uses Flash, as opposed to full-motion video. Gibbs says he does not believe the connectivity is as strong if you have full-motion content while consumers are moving through a mall: “They’re not there to watch television. They’re there for some other reason, and it doesn’t involve entertainment.”

Even as out-of-home companies move to create digital networks in malls, mobile and interactive applications are also taking hold.

Reactrix’s approach to engaging and persuading consumers involves STEPscape, a digital system that projects images onto screens on floors, allowing people to interact with ads. The system, which was rolled out in early 2006, is in 157 U.S. malls and has attracted an array of national advertisers.

Mobile devices, such as Bluetooth, also present opportunities. Bluetooth “lends itself to a mall environment, it’s easy to deploy and it’s not that expensive,” says Alan High, general manager for Clear Channel Malls. “Our advertising is being used for applications in the mall environment that didn’t exist a year or two ago.” Using Bluetooth allows Reactrix to send coupons and movie trailers to shoppers’ devices, adds Ribero.

Reactrix plans to use Bluetooth with its interactive screens in concert with the Brand Positioning System it recently added to its repertoire. The system employs small icons on Reactrix’s screens that guide consumers to locations in the malls where they can buy specific brands, and allows for real-time promotions and marketing.

Mobile is valuable in tying together the entire media campaign to the point of purchase. NearbyNow, a three-year-old company, drives in-store traffic by helping consumers search online to find products in stores close to home. The company is involved with about 200 malls in 150 cities.

With all these new opportunities, malls have to be sensitive to not overstimulate shoppers. “If your mall starts looking like Times Square with all the digital screens while your cell phone is barraged with offers, that’s not a place people will want to go to shop,” says Scott Dunlap, CEO for NearbyNow.

That said, as location-based media become better at hypertargeting, the return on investment for advertisers go through the roof. Dunlap says a $900 CPM for a mobile ad can have a very high ROI if, for example, it’s a chocolate shop targeting shoppers the day before Valentine’s Day. “It’s a very exciting time for the shopping mall industry,” Dunlap argues.

In the UK of course we could add Vision Media Group and their deal with Clear Channel, Avanti Screen Media (and Neo Advertising) and CBS Outdoor’s complete digital mall offering in White City, London – not forgetting the work done in Canada and Germany in Malls also by Neo Advertising.

One Response to “Mall Advertising Goes Digital”

  1. Jason Habing Says:

    Interesting comment comparing digital out of home to the internet. It will be very interesting to see how both of these mediums evolve together in the coming years.

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