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Shopping Centers Today -> May 2002
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THE BIG SCREEN
Owners shift from traditional media to high-tech in-mall advertising
By Dave Bodamer
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| Skytron is advertising on high-definition screens in about 72 regional malls. |
A poster that advertises, say, fast food won’t much interest a shopper entering your mall for sneakers. But what if you are able to provide each customer with advertising that is relevant to his/her visit?
Companies now putting large video screens, kiosks and monitors into malls are paving the way for just such a reality, one in which customers could punch the reason for their visit into a cellular phone or palm computer and immediately be flashed the relevant advertising.
“If mall media is going to be effective, it has to be more effective than traditional brand advertising done outside of the mall,” said Jeff Salesky, CEO of Irvine, Calif.-based Skytron, which runs a nationwide network of video screens in regional mall food courts. “If a shopper is reminded she needs to buy tennis shoes, it’s best that that happens in the mall rather than her realizing that on her way home.”
Skytron is a leading player in bringing interactive media into regional malls. The company has installed large, high-definition screens at about 72 regional malls in the United States reaching an estimated 25 million shoppers. That mass of viewers has enabled the company to catch the attention of national advertisers for its network and helped generate added revenue for mall owners in the process. On-site advertising accounted for 6 percent of media dollars spent in the United States last year, and it was the only advertising category that grew.
The company’s service now focuses on mall food courts, where most of its screens are located. Skytron broadcasts original programs such as interviews with entertainers as well as news items of between two and four minutes interspersed with 30-second commercials. Skytron distributes its programming via satellite, but technicians at each site can edit the programming or insert local advertising into the spots.
Skytron’s present goal is greater market penetration, not improving the technology, so providing relevant advertising to each customer — i.e., our young customer seeking sneakers — isn’t in the immediate offing. The company wants to triple the number of people viewing its screens to 75 million within the next two years.
Over the long term, however, the infrastructure used to power the network — satellite dishes and broadband Internet access — could be part of a more interactive mall marketing system.
“You’ve got to have a blend of retailers, product manufacturers and others that look to reach the consumer audience while they are in a buying mode,” Salesky said.
Another company putting screens into malls is Philadelphia-based Scala, which deals in the cutting-edge LED (light-emitting diode) and plasma technology used in display and flat-screen TV monitors. Scala’s content is distributed over the Internet and can also be customized on-site.
TrizecHahn Corp.’s Hollywood & Highland project, Los Angeles, is a showcase for Scala’s latest technology. The company built a six-foot-tall, 82-foot-long LED board that broadcasts advertisements, schedule information for on-site facilities and video. The high-resolution board can run video in full color.
“TrizecHahn developed Hollywood & Highland partly based on the potential of its location to generate advertising revenue,” said Adam Bleibtreu, president of Creative Chaos, Los Angeles, the design consulting firm TrizecHahn hired for the project.
“Our basic design concept was [about] whether we could do more than static billboards,” he said. “We focused on two criteria: make it easy for the advertising department to sell and … enhance the aesthetic value of the project.”
Scala has also installed plasma screens in Eddie Bauer stores where the ads have had a dramatic impact on the chain’s sales; the LED advertising saw sales increase by 20 percent on all merchandise and by as much as 50 percent on the specific merchandise being promoted, the company said.
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| Hollywood & Highland features an 82-foot-long LED screen that airs ads and event schedules to passersby. |
Overall, the company estimates that there are currently about 224,000 digital signs installed in the United States and almost 200,000 in Europe. Moreover, there are 339,000 interactive kiosks in the United States.
“In convenience stores, we’ve seen the same thing,” said Jeff Porter, president and CEO of Scala. “In stores where Coca-Cola used boards to advertise Sprite, sales rose 44 percent.”
“The future upside to this technology is that owners have more control,” said Scott Atkinson, Scala’s director of marketing, who formerly worked for The Rouse Co. “Posters cannot react. We’ve got pieces of software that allow the boards to react to external input, whether it be through a touch screen or from a cellular phone or PalmPilot.”
Not all forays into common-area entertainment have been successful, however. The most notorious failure was Café USA, which in 1992 began an effort to deliver closed-circuit video programming and advertising to up to 750 mall food courts nationwide. But within six years the parent company, Food Court Entertainment Network, was defunct, having installed Café USA in just 20 malls; it lost nearly $26 million in the process. Another firm, South Orange, N.J.-based Screenzone, which brought a mixture of movie information and advertising into mall food courts, floundered after installing video screens in only four malls.
“A bunch of people have failed in this business … What seems to be a common thread is that they need a lot of capital and can’t get a broad enough network installed to attract enough advertisers,” said John Mott, general manager of Palisades Center, West Nyack, N.Y. “It seems on the surface to be a great idea, to reach people at the point of sale, but no one has been able to put together the critical mass to succeed, even though there’s no doubt that in-mall marketing works.”
Palisades Center toyed briefly with a technology by which customers could get data on their cell phones while at the mall, based on global positioning system technology. GeePS, the company that invented the program, discontinued it after a few months’ trial period. The center’s customers were intrigued by the program, Mott said, but for such a system to work, all the mall tenants must be on board.
“We learned that the customer is only going to use it if they can get 300 out of 300 stores and get directions,” said Mott. “How hard is it when you’re in a center to look at the mall maps and figure out where [something] is and check it out in person?”
Nevertheless, efforts to connect directly with customers through high-tech advertising continue, and there is an ongoing shift from advertising in traditional media — newspapers, magazines, television and billboards — to using nontraditional media represents an opening for shopping centers.
“You can reach a customer when they’re just yards away from your product,” Scala’s Atkinson said. “It’s very valuable.”
Moreover, multimedia in-mall advertising can take advantage of the broadband infrastructure that many regional mall owners have taken time to install over the past few years.
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