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MALL AS MEDIA

Owners use data to prove mall ads beat TV, papers

BY JOEL GROOVER

Advertisers know which magazines and television programs work best for them, because audience data is audited. Soon the mall “audience,” too, will be independently analyzed in much the same way, indicating to advertisers and sponsors exactly who they can reach at a particular center.

Several major retail landlords, with Simon Property Group blazing the trail, aim to take this “mall as media” concept forward by applying the kinds of ad metrics used in TV and radio at their malls.

Embracing the kinds of audience measures that advertisers and their agencies use could give landlords an edge with corporate sponsorships, in-mall media contracts and promotional tours.

CBL & Associates Properties, General Growth Properties, The Mills Corp. and Westfield Group have embarked on a joint effort to rate their malls using the same types of media metrics. That push could take 10 to 12 months to complete.

“This will create, to some extent, an even playing field for all the developers,” said Petra A. Maruca, Mills’ vice president of partnership marketing.

Metrical mystery tour
Simon, which began studying the issue of inadequate mall metrics in 2002, is working with Scarborough Research and Arbitron, two New York City-based marketing and media research firms. The firms are interviewing advertisers and media buyers about their data needs and testing ways to measure audiences at specific Simon malls.

Simon expects to have the new metrics in place by the middle of this year, says Stewart A. Stockdale, the company’s chief marketing officer and president of Simon Brand Ventures.

“We had some pretty good statistics two years ago, but we didn’t have the statistics that media buyers use to place advertising,” Stockdale said. “Not only were we nontraditional, we were nontraditional without credible metrics.”

Two preliminary studies, one done with Arbitron and the other with New York City-based Nielsen Media Research, helped Simon learn to describe mall audiences in terms familiar to the ad world, Stockdale says. Most important are “reach” (the number of consumers reached by an advertising campaign) and “frequency” (how many times the campaign reaches them).

The Arbitron study, published in May 2004, reveals that Simon malls give traditional media a run for their money in both categories. With some 2 billion annual visitors, Simon’s portfoliowide reach surpasses the circulations of such major publications as The New York Times, Sports Illustrated, TV Guide and USA Today. In Boston, where Simon has a heavy presence, the company’s malls reached 68 percent of adults in a three-month period, rivaling The Boston Globe newspaper and the major TV networks. Even in a country obsessed with national sports, the study notes, Americans are five times more likely to visit a Simon mall than to attend a pro or college sporting event.

General Growth, one of the two largest U.S. mall REITs, also reaches about 2 billion consumers annually, says James W. (Wally) Brewster, SCMD, the firm’s senior vice president of marketing communications. Brewster says the metrics initiatives are “a huge step for the shopping center industry.”

Advertisers and global media buyers agree. “Putting place-based media into a standard ratings system is a wake-up call to the ad agencies,” said Gwen Morrison, president of The Store, the Chicago-based global retail practice of London-based WPP, one of the world’s largest advertising and marketing firms. “Our clients will start to say, ‘Look at how malls are delivering. What are you doing on my plan to get me into this media space?’ ”

Although consumer brands such as Coca-Cola have worked with malls for years, the lack of traditional metrics has tempered enthusiasm for the mall space, says Michael Stern, director of cold-drink marketing for the Atlanta-based soft-drink giant, a major Simon partner. “Advertisers and media buyers look for the most cost-effective ways to reach the right audiences,” he said. “This will make things so much easier.”

TV turnoff
These initiatives come during an ad-world paradigm shift that favors malls. Brandweek, Promo, Event Marketer and other industry publications have all started to voice strong support for malls as marketing platforms,” said Maruca.

Given that TV viewers channel surf or increasingly use commercial-skipping devices such as TiVo, and because of the explosion of new electronic media, advertisers no longer trust in the effectiveness of a 30-second TV spot, Stern says. “All we talk about in our media group is how to connect with consumers in different ways that are more interactive and more attuned to what they’re doing,” he said. “The traditional model of just spending all your media dollars on TV is no longer appropriate.”

Indeed, “experiential” and “interactive” are two of the hottest buzzwords in the ad world, and malls are ideal for such campaigns, says James E. Lucas, director of planning and research at the Chicago office of DraftWorldwide, a global marketing agency. “People are starting to realize the importance of place,” he said.

Ironically, however, some of the newest in-mall advertising technologies run the risk of replicating problems associated with TV, says Paco Underhill, managing director of New York City-based marketing research firm Envirosell and author of The Call of the Mall. “If I put a flat-screen television in a mall, I can’t say the number of people passing it equals the number of exposures to the program,” he said. “If you have a 30-second commercial plank and the exposure to that is three seconds, that’s unacceptable.”

Underhill, whose firm specializes in direct observation of consumer behavior, says the traditional metrics now being adopted by the mall REITs fail to deal with the complexity of mall environments. Reach and frequency numbers for an entire mall, for example, might overestimate actual consumer exposures to a promotion located in just one part of that mall.

Lucas agrees. “It is trickier,” he said. “Are the consumers down there at Saks or over at Walgreens?” But this is where malls, which already employ a wide variety of consumer research methods, can deliver a metrical one-two punch, he says, by using standard Arbitron-Scarborough numbers to woo advertisers on the front end and then following up with data from direct observation or other methods to show actual results. “You can say, ‘We saw 4,726 women ages 18 to 30 go through this area of the mall on these days,’ ” he said. “That’s getting closer to a point between front-end measures and sales.”

Even without traditional metrics, Simon and General Growth already leverage their huge portfolios to entice such national advertisers and sponsors as American Express, MCI, PepsiCo, 20th Century Fox, Visa USA and XM Satellite Radio. (Both REITs declined to release annual sponsorship revenues but say the numbers run into the millions.)

The new metrics could also help smaller owners such as Macerich do more local and regional deals or occasionally connect with national brands. A big media buyer, for example, might do simultaneous deals with Macerich and several other mall companies to target all the properties in a given region. “We constantly hear from advertisers and agencies that they can’t use information done differently across market or even within market,” said Bill Rose, vice president and general manager of Arbitron New Ventures. “Having most if not all malls measured in the same way and being able to compare them with other media is what makes the prospects of this so powerful.”

Despite those powerful prospects, however, there are limitations. Mall owners must preserve the integrity of the retail experiences they create, so not all brands are appropriate, says Michael Beyard, a senior resident fellow at the Urban Land Institute, Washington, D.C.

“That is part of the challenge,” he said, “to make sure the advertising actually reinforces the overall lifestyle image of the mall.”

Apparently, this involves more than just avoiding sponsorships with, say, cigarette companies. “Even good brands may not necessarily be appropriate,” Beyard said. “Rather than mass-market brands, for example, a mall might prefer niche brands that appeal to much slimmer demographics. We’re seeing more narrow casting as shopping centers become more specialized and differentiate themselves.”

Quantity is an issue too. “One of the challenges we face in commercial environments is the premise that if three signs work, then 27 signs will work miracles,” Underhill said. “There is a critical balance between maintaining the decorum of the mall and commercial pollution.”

Tenant reaction is important, too. Some retailers are already reacting negatively to ad placement in malls. Promotional banners that obscure their signage, racy ads and promotions for retailers not in the mall are some of their biggest complaints.

Not that any of this is rocket science. Magazine and newspaper publishers have been striking a balance between editorial and advertising for decades. Presumably, landlords will learn the same lessons for balancing commercials and content at their malls.