|Success of the effort to develop a metrics system for point-of-sale retail ultimately depends on Wal-Mart's and P&G's cooperation. |
An unprecedented partnership between the ANA and Point-of-Purchase Advertising International (POPAI), a marketing at-retail trade group, wants to fill the void and make in-store marketing as measurable as TV and radio.
An extensive, half-million dollar pilot study is set to launch in 2006. The study, organizers say, is just the beginning of a long arduous process with one end result in mind: a syndicated ratings product both retailers and CPGs can subscribe to that offers metrics as reliable as those of Nielsen or Arbitron.
“You could one day know that a Frito-Lay poster in the salty snacks aisle was read by 10.6% of women shoppers 35 to 54 over a four-week period -- the reach -- and of those the average women saw the ad 4.6 times -- the frequency -- and on the ROI side, you could know the sales lift was 6%,” said Jim Spaeth, president of Sequent Partners, a marketing metrics consulting company and a member of the POPAI board of directors.
Reliable and trusted measurements of in-store advertising -- estimated at $17 billion a year -- continues to elude advertisers, even as money pours into the medium at record speeds and industry leaders talk metaphorically of the "last three feet” and the "moment of truth.” But concerns have been raised about whether Wal-Mart could block the progress of the pilot study and industry efforts to measure in-store marketing overall. Wal-Mart along with Target are notably absent from the pilot study, along with packaged-goods giants including Procter & Gamble Co., Unilever and Kimberly-Clark. Wal-Mart has historically taken a secretive stance with data, and unlike other mass-market retailers, refuses to share sales data with Information Resources Inc. and A.C. Nielsen.
Wal-Mart the wildcard
“Wal-Mart is the wildcard,” Mr. Spaeth said. “I’m less worried about P&G. For all the money they spend, they still are still a small percentage of the total ad dollars. Wal-Mart sales represent a huge chunk of retail sales.”
Mr. Spaeth said he was hopeful Wal-Mart would eventually relent, but predicts it will only be out of self-interest. “If they want to keep selling Wal-Mart TV as trade promotion, then they will keep getting the prices they are getting. If they want to progress to get the kind of rates ABC and NBC get for their time, data is going to have to be available to agencies and advertisers to evaluate the medium,” he said.
Michael Palmer, senior VP, member relations at the ANA, downplayed the lack of big-name participants in the pilot study.
“In any industry effort, there are always a variety of participants. I’m not concerned there are one or two brands that aren’t in there. The objective is to move something forward and get a win and demonstrate there are new ways to look at retail marketing,” Mr. Palmer said. “If we can prove the model works, they will use it.”
Mr. Palmer said the lack of participation would be more of a challenge if the aim of the study was to set the standard now, instead of just a model of measurement.
Wal-Mart and P&G needed
“You can’t set a standard without Wal-Mart and P&G, but we're not at that point yet,” he said. “We know both are interested in this information and they will look from the sidelines.”
Dick Blatt, president-CEO of POPAI, said he has been “trading calls” with Wal-Mart but has no clear answer, yet.
Mr. Blatt said he does expect a commitment from either Coca-Cola Co. or Pepsi-Cola “if not both.” He also promised each product category would be represented in the study, including snack foods, cookies and household products. In addition, he expects each retail category, including mass, grocery and convenience stores, to have at least two participants in the pilot study.
RFID chip technology
“It took a lot to make this happen and it shows the industry is very thirsty for this data,” said Bob Michelson, CEO of Goliath Solutions, which is helping to design the study and providing radio-frequency identification chips (RFID) enabled technology.
His company’s Goliath tags will be used on point-of-sale displays to ensure reliability of in-store marketing displays, as well as how long the displays are up and where approximately they are located in the store.
Even without big-name brands signed on, POPAI boasts a board of directors with top-notch brands, although no C-level marketing executives. Board members include: Kurt Witzel senior manager, retail marketing at Anheuser-Busch; Mike Jones, vice president of integrated marketing, Coca-Cola North America; Leslie Nagy, director, marketing services, Pepsi-Cola Co.; Daniel Williams, director of restaurant merchandising at McDonald's Corp.; and John Anderson, U.S. manager of marketing/merchandising, BP Oil Corp.