The project -- the first to emanate from the new pan-VNU Nielsen Connect unit announced last week -- is vaporware for now. Nielsen In-Store has yet to define the initial metric it will use to measure in-store media viewers or engagement; that is scheduled to happen early next year.
Jon Mandel, the outspoken former head of WPP Group's MediaCom, was tapped last month in a startling move by private-equity research powerhouse VNU to head its newly created Nielsen Connect unit. Mr. Mandel was hired by CEO David Calhoun, a rising star at General Electric Co. before signing on with the Dutch media- and consumer-research provider to bring a fresh perspective to its tangled mass of 300-plus subsidiaries.
This first announced offering, a full-fledged syndicated product, isn't scheduled to be available until early 2008. And whether Wal-Mart will partially lift its 5-year-old ban on providing its Retail Link scanner data to research syndicators for this purpose remains undetermined.
Wal-Mart is one of the partners in an industry consortium, Pioneering Research for an In-Store Metric (PRISM), that conducted the preliminary research earlier this year that led to formation of Nielsen In-Store. In the course of that research, Wal-Mart did provide access to it scanner data, said George Wishart, former head of Nielsen's media-planning software business who has been named managing director of Nielsen In-Store.
"I have not had the privilege of talking to Wal-Mart about this in detail yet," Mr. Wishart said. "But we will be hopefully talking to them about that, and we are hoping that they will continue to participate in this research activity."
Wal-Mart's in-store TV network
Wal-Mart benefits financially from such in-store media because of its in-store TV network; industry executives say its buyers frequently urge marketers to advertise on the network, operated by Thomson's PRN. So refusal to provide data to help measure the network's impact on sales could raise some eyebrows.
Spokespeople for Wal-Mart couldn't immediately be reached for comment. In its release, Nielsen In-Store pegged in-store as the sixth-largest advertising vehicle in the U.S. at $18.6 billion. But much of that includes trade promotion money paid by package-goods manufacturers to retailers that tends to be accounted for as reductions to net price rather than marketing spending.
The market is highly fragmented. Even PRN reported revenue of only $100 million in a later-withdrawn initial public offering filing last year. And revenues of the other major player in the in-store space, NewsAmerica's SmartSource, are estimated at only $300 million.
Other members of the PRISM consortium, led by the In-Store Marketing Institute and expected to participate in development of Nielsen In-Store, include 3M, Coca-Cola, Kellogg's, Miller Brewing, Procter & Gamble and Walt Disney Co., with support from retailers, including Albertsons, Kroger, Walgreens and Wal-Mart.
Asked whether Nielsen In-Store will deliver an audience-measurement metric, an ROI metric or both, Mr. Wishart said: "The short answer is I think both. ... You need to start with the thought of the store as a medium and get a disciplined metric that allows people to understand it as a medium with the same level of rigor as other measurements are done at."
Raw store traffic counts alone don't tell marketers how many people went past a particular in-store ad or paid attention to it. Some manner of metric, such as a gross rating point for TV, is necessary, he said, for media planners to make apples-to-apples comparisons.
"We're sensitive to the fact that it's difficult for a media agency to be able to discuss an activity in store without being able to relate it in similar ways to other media or marketing investments," he said.
Past marketing metrics
The in-store marketing industry has tried to supply metrics, but past studies by the likes of the Point of Purchase Advertising Institute have mainly delivered the rather unsurprising findings that off-shelf merchandising displays do indeed help sell more product, without providing a metric comparable to media ratings.
Beyond that, however, Mr. Wishart said the service also would work to help measure how in-store advertising affects actual product sales, independent of other in-store activity such as off-shelf merchandising or price reductions, and whether it has the same effect on brand equity as out-of-store media.
Past industry studies have indicated that trade promotion spending has little long-term lift on brand sales beyond the immediate effect, but that advertising spending tends to have a long-term effect similar to at least twice the initially measured sales lift -- a multiplier often equated with the brand equity-building effect. One goal of Nielsen In-Store will be to look at whether in-store media have a long-term multiplier more like that of traditional advertising or more like that of trade promotion.