Vendors seek to become checkstand media moguls

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Retail equipment vendors are bidding to enter the media business with a new wave of products that would bring advertising to a huge, but elusive, captive audience -- shoppers in checkout lines.

The latest would-be checkstand media moguls are introducing a twist they hope will separate them from failed forays of the 1980s and '90s: targeting ads to shoppers based on retailers' frequent shopper data or purchase patterns.

Casio, Hewlett-Packard Co.'s Verifone division, Hypercom Corp. and IBM Corp. are among them, pitching flat-screen video displays or paperless credit- and debit-card terminals to retailers as a means to gain new revenue from advertising either they or the chain would sell.

PROJECTING CPMS

"Wal-Mart has 90 million customers a week," said Don McCormick, a sales representative for ePOS Marketing Co., Irvine, Calif., which is pitching a flat-screen video display running off IBM's widely used retail point-of-purchase systems and is in talks with Big Blue about a joint venture. "If you could get $30 [costs per thousand], you're looking at $100 million net new revenue annually."

He estimated that highly targeted ads based on frequent shopper or purchase data could fetch even more, possibly as much as $80 to $100 CPMs.

The average checkout lasts 21/2 minutes, Mr. McCormick said, allowing plenty of time for media impressions. Even though he acknowledged purchase decisions are already over by checkout time, he said the checkstand advertising would be viable for everything from usage suggestions for the product just purchased to post-shopping entertainment options.

The ePOS 12-to-15-inch color flat-panel displays can either show ads to a string of shoppers waiting in line or be turned to face the individual shopper at checkout with banner-type ads above a sort of scrolling electronic cash register tape.

EPOS REVENUE MODELS

The company is considering giving the displays away to retailers that let ePOS sell the ads and share in revenue, though large chains may choose to sell ads themselves, Mr. McCormick said.

Bruce Franklin, VP-business development for ePOS, expects at least one large retailer to roll the system into its stores by summer, though he wouldn't identify the chain.

Safeway currently is running house ads using a similar display in a Livermore, Calif., store, and Kroger Co. already has such screens in several areas. ePOS declined to comment on whether Safeway and Kroger were using its system.

Casio, Hypercom and Verifone are all pitching paperless credit/debit terminal advertising. Verifone's full-color terminal is being touted as a way retailers can deliver personalized ads, promotions or interactive customer surveys through a service called @pos.com.

SOME SKEPTICAL

The company expects to roll the system into a pilot test with an East Coast discounter by next month, said Verifone Marketing Manager Michelle Graf. The company is linking with online ad service Adforce and receiptcity.com to deliver ads to stores via the Internet and let consumers store receipts from participating retailers online.

The systems haven't sold any ads yet and are meeting with skepticism from veterans of the retail advertising industry.

David Diamond, exec VP-marketing and new applications at Catalina Marketing, operator of the in-store Checkout Coupon system, said tight targeting is increasingly playing a role in Catalina's direct mail and online efforts. But he added that he's unconvinced another wave of checkout marketing will work.

Jon Kramer, president of J. Brown/LMC Group, Stamford, Conn., a unit of Grey Advertising that specializes in manufacturer-retailer co-marketing, agreed.

"To me, people at checkout are interested in one thing -- checking out," he said.

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