Broader Thinking About Narrowcasting

The year 2005 was a breakthrough one for in-store television. Too bad 2006 started off on such a down note. With Target, Albertsons, Kroger, and numerous smaller retailers introducing narrowcast networks for content and advertising into their stores in 2005, the narrowcasting industry finally had the banner year some had been predicting for nearly a decade.Then came 2006, and reports from the U.K. that the chain-wide rollout of "Tesco TV" had stalled, presumably because the initiative has engendered little interest among the network's primary advertising base of top packaged goods companies.And thus, the other shoe has dropped before most of the retail world has even put on its socks. Tesco's deployment has been the bellwether, the model retailers here in the U.S. (or, at least, the suppliers presenting them with proposals) have thought to emulate as they cautiously enter the Age of Retail Media.All hope, however, should not be abandoned -- unless those hopes have been pinned on a get-rich-quick-plan to sell ad blocks on in-store TV networks. It's already common knowledge that traditional TV spots don't work in the store environment; retailers and advertisers should likewise understand that in-store TV networks can't operate the way broadcast networks do.In a report on the state of in-store digital media written for the Institute, co-authors Bill Collins and Laura Davis Taylor posit that retailers should not be looking at narrowcast or digital signage networks solely as a method of generating advertising revenue. Instead, they should examine the potential for digital media to enhance the shopping experience for customers, improve the work environment for employees, and, by doing those two things, increase sales and profitability. Collins calls it the Indirect Revenue Model. He notes that this approach doesn't exclude the inclusion of paid advertising.What it does exclude is TV networks that aren't fully integrated into the retailer's marketing and merchandising strategies. In its most basic form, integration means displaying the advertised products near the screens. Studies on the sales lift produced by networks tested at two other U.K. retailers, Asda and Spar, found that in-store advertising works far better when the product is right there.And what the Indirect Revenue Model requires is a network that complements, rather than distracts from, the store's intended atmosphere and makes it easier, not harder, to shop. A satellite beaming in hours of product advertising is never going to do that.A better bellwether for the industry may, in fact, be Target, which very quietly rolled out a digital network in 2005 whose strategy appears more closely aligned with Collins' Indirect Revenue Model than most previous network rollouts. The company is keeping mum on its plans, but what's obvious from visiting stores is that the goal is to make in-store TV a seamless addition to the environment. That's not to say Target's plan ultimately will prove perfect, or even that Tesco's is unsound just because advertisers are proving reluctant initially. There's still a lot of work to be done before the ideal model (or models) for in-store networks is achieved.So watch out for more shoes. Peter Breen Managing Director, Content In-Store Marketing Institute

P2PI MEMBERS

JOIN P2PI

You May Also Like

Tesco Forms Media Partnership With Car Giant

AD Retail Media’s Transition In-House