Showing TV, and Commercials, on the Shelves and in the Aisles
New York Times
June 15, 2010
For many marketers, advertising in stores is an increasingly important way to influence shoppers at the so-called moment of truth, as they finally make up their minds about which brands of soup, soap or cereal to buy — or not buy. Now, a company is hoping to bring commercials to the retail point of purchase on screens that will be attached to shelves and above aisles.
The company, Automated Media Services, known as A.M.S., has been working for years on a system that would deliver television in retail environments in a way that would allow media agencies to plan and buy commercial time in stores just as they do on the networks, channels and stations watched at home. The system, which the company calls 3GTV, also includes provisions to verify that commercials have actually run.
The initial test of 3GTV is scheduled during the summer in Maryland and Virginia, at nine stores that belong to the Bloom supermarket chain, part of the Food Lion unit of the Delhaize Group.
The executives at Automated Media Services, who have backgrounds in television, advertising and marketing, have raised an estimated $10 million to develop 3GTV. Investors and advisers include some names well known on Madison Avenue, among them Burt Manning, former chairman and chief executive at the JWT division of WPP, and Stephen Grubbs, who held senior posts at media agencies owned by the Omnicom Group like OMD and PHD.
“This is all about finding a way to give advertisers the opportunities they used to have in the days of three networks,” said Mr. Manning, when marketers could effectively and efficiently reach huge audiences just by buying commercial time on ABC, CBS and NBC.
“People are still watching television, but they’re spread out among hundreds of channels and the Internet,” Mr. Manning said. “The one place where people re-aggregate themselves back into a crowd again is the retail store.”
Mr. Grubbs said the marketing and media industries have “done a very good job of reaching consumers at the top of the purchase funnel” through methods like television and print advertising, “but we haven’t done so well on hitting that bottom part of the funnel, before the consumer picks the product off the shelf.”
The presence of the 3GTV screens near or in front of the products advertised in the commercials represents an advantage, Mr. Grubbs said, compared with existing systems in stores that use TV screens at or above check-out counters, after purchase decisions have already been made.
Executives at A.M.S., which is based in Allendale, N.J., are making presentations about 3GTV to agencies and advertisers. They acknowledged the challenges they face.
“It’s a lot of moving parts,” said Robert I. Wolinsky, chairman and chief executive. “Everything has to work, and work to commercial standards.”
“And it’s more than a test of technology,” he added, because “the bet here is selling air time to the media agencies that buy air time” on television.
Mr. Wolinsky said he was optimistic, adding, “We’re going to learn a lot” during the test.
Michael Lamontagne, director for innovation and strategy at Bloom, said testing the system was appealing because if successful, it could help “transform the shopper experience.”
For instance, if customers pay attention to the commercials on 3GTV, Mr. Lamontagne said, Bloom could cut back on printing the promotional sale circulars that are distributed inside stores.
And the commercials could help cultivate a “one-on-one store relationship” with shoppers, he added, by telling or reminding them, for example, that a Bloom store was sponsoring “the local Little League baseball team.”
As the test nears, Bloom will work with Automated Media Services on placing the screens and determining how many are needed in each store to minimize any consumer perception that the system is intrusive or bothersome.
“We want the product” advertised on the screens “to be the main focus,” Mr. Lamontagne said, rather than the screens, which he called “a support mechanism to allow us to provide stronger communications” with shoppers.
Mr. Grubbs said A.M.S. was “very sensitive to not mucking up the store environment” and was using screens “that will not stick out like a sore thumb.”
Mr. Lamontagne declined to discuss the financial terms of the test at the Bloom supermarkets, which will probably last for six months.
“There’s going to be costs on both sides,” Mr. Lamontagne said, adding that “there needs to be a positive return on investment for everyone.”
In the end, he said, customer acceptance would determine whether the test succeeds or fails.