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THE MALL SCREEN

Landlords and retailers test new in-house advertising vehicles

By Joel Groover

As Madison Avenue shows growing interest in reaching the billions of consumers who regularly visit malls, developers are racing to find smart new ways to serve up ads in the mall space. Technology looms large in many of these emerging “mall as medium” strategies, but how to deploy the latest generation of plasma screens, digital networks and wireless gizmos to maximum benefit is a hotly debated question.

The basic issues are anything but abstract: Should a digital display in a food court be wired up with speakers worthy of an Imax extravaganza, or would that rattle the nerves of everyone within earshot? Will wireless text messages be the key to reaching teens as they cruise the mall, or will the marketing-weary youngsters simply block the ads as so much spam? Will shoppers stop to watch a live TV broadcast of an American Idol concert tour, or would they rather just glance at a digital billboard to find out what’s on sale at Macy’s or the Gap?

For mall owners that succeed in finding the answers to such questions, the windfalls could be significant, say marketing executives. Each year advertisers dump an avalanche of cash on the broadcast and cable TV industries — $67.7 billion in the U.S. alone in 2004, according to Advertising Age. But with the advent of commercial-zapping digital video recorders like TiVo, on-demand programming such as pay-per-view and a proliferation of similar media choices, those same advertisers are clamoring for alternative vehicles for their funds.

“The 30-second TV spot is being challenged dramatically,” said Stewart A. Stockdale, Simon Property Group’s chief marketing officer and the president of Simon Brand Ventures. “We’re one of the new opportunities, and we happen to be at a place where people are ready to shop.”

Tempering the sense of urgency some developers feel about capitalizing on the trend, however, is the largely dismal track record of the mall-focused digital vendors launched during the tech boom of the 1990s — Café USA, Screenzone Media Networks, Skytron Corp. and their like. This graveyard of startups stands as a reminder of the importance of careful content strategies and of the need for sufficient investment capital to roll out screens at large numbers of malls, says Todd Putman, Westfield America’s executive vice president of marketing. “A lot of people have tried this,” Putman said. “There are a lot of gravestones lying around.”

This imperative to get it right is why Simon, General Growth Properties and other top mall REITs are taking cues from third-party market researchers and consulting with major national brands as they shape their mall-as-medium initiatives. “What we’re now trying to do as developers is to make sure we have the right delivery vehicles and, from there, the right combination of advertising and content,” said James W. (Wally) Brewster, SCMD, General Growth’s senior vice president of marketing communications. “Digital is probably the most critical component of it because, across the country and now internationally, you do have billions of consumers going to these properties. These are the only places where you have all different segments of consumers.”

Indeed, Simon’s portfolio draws some 2.2 billion visitors a year. Unlike a major TV network, however, Simon would be hard-pressed to transmit a national brand’s advertising message to all those audiences at once. Digital networking holds the promise of changing that, Stockdale says. By the end of the summer, the OnSpot Digital Network, a 50-50 joint venture between Simon and French media giant Publicis Groupe, will have installed nearly 2,000 high-definition screens at 50 Simon malls in major markets. This test rollout will give advertisers the ability to reach an estimated 500 million visitors yearly, Stockdale says.

There is little doubt consumers will see and hear the screens: They hang in entrances and in center and food courts, at escalators, in major corridors and in other high-traffic areas throughout the mall. But even while this high-exposure strategy creates extraordinary advertising opportunities, could it also spoil the atmosphere and annoy Simon shoppers? That was among the questions Arbitron, a New York City-based media and market research firm, explored with interviews of 588 shoppers at the Roosevelt Field mall, in Garden City, N.Y., in late 2004 and early 2005. At Roosevelt Field a network of 58 plasma screens displayed a 10-minute loop containing fashion and national and local ads, movie trailers and Simon promos.

About 95 percent of the respondents agreed that the screens “add a ‘high-tech’ look to the mall.” Roughly 70 percent said they were “glad the screens were installed in the mall,” and similarly, 70 percent said they found them entertaining. “Consumers rationalize the multiple brands they see in shopping centers,” Stockdale said. “So far the reaction to our digital initiative has been very positive.”

Though it’s clearly a work-in-progress, the OnSpot initiative, marked so far by a heavy in-mall presence of digital displays showing 30-second ads and other longer-format content, resembles in some ways a traditional TV network, custom-fit for malls. Other landlords and their technology providers, however, advocate very different approaches. New York City-based Adspace Networks, which reaches 45 million shoppers in 41 malls owned by General Growth, The Macerich Co., Westfield and others, deploys 60-inch vertical plasma screens that flash logos, sales announcements and other quick messages more akin to Internet pop-ups, with animation and sound, than to TV commercials.

Like OnSpot, Adspace is a centrally controlled digital network that allows advertisers to target local, national or regional audiences at multiple malls. Its content loop always includes “Today’s Top 10,” a series of 12-second spots designed to attract eyeballs by highlighting hot deals at the mall. “Most people tend to think weather and news is what people want to see on the screens,” said William Ketcham, Adspace’s senior vice president of marketing and programming. “But we’ve done a lot of research, and we know that in fact what people want to see is what’s on sale. They are there to shop. It’s like a sport.”

Westfield uses Adspace screens in 23 of its malls, with plans to add more, and regards the network as its primary digital strategy, says Putman. “The model that has customer information and advantages, such as what is going on at the mall that day, was of primary concern to us,” Putman said. “We have pushed every idea in this brand alliance world through the filter of, ‘What’s in it for the customer?’ ”

Westfield favors Adspace’s focus on quick bursts of information easily digested by shoppers on the move. “Walking by a screen, how long are you going to look at it?” Putman said. “This is like USA Today at the mall — very tangible, bite-sized pieces of information.”

Having once marketed itself as DAN (Digital Advertising Network) TV, Montréal-based DAN Media decided to drop the TV label. The company, which operates large-format video screens in 58 Canadian malls owned by Cadillac Fairview, Ivanhoe-Cambridge, Oxford Properties and others, learned the hard way that food courts and TV-style programming are incompatible, said Allan Safran, DAN Media’s executive vice president and COO. “You don’t go to the food court to watch TV,” he said. “What we have is a big, moving billboard that will accommodate what the people in the food court want and deliver information, entertainment and, of course, advertising.”

In fact, the constant ebb and flow of noise in food courts forced DAN Media to turn off the volume on its gigantic screens altogether. The company tried using sensors intended to automatically adjust the volume based on the loudness or softness of the ambient food court buzz, but the devices proved futile, says Warren Stelman, DAN’s president and CEO. “We discovered that if the food court was empty at 10 a.m. and a woman walked in with a screaming baby in a stroller, the sound level just blew right up and everybody jumped out of their chairs,” he said. “It is also annoying to employees of the mall.”

Philosophies about how to deploy the technology may differ, but mall media experts say there is broad agreement on the potential of malls to become the ad vehicle of choice, particularly when linked by means of digital networks that allow owners to deliver customizable content loops to mass audiences at low cost. According to separate Arbitron studies, shoppers walking through Simon and Adspace malls saw the same message an average of three times. This high frequency of exposure, combined with the large number of mall visitors, yields a cost per month dramatically lower than what media buyers routinely pay for TV time, Ketcham says. The cost per month at Westfield’s Garden State Plaza mall in Paramus, N.J., which draws 1.7 million visitors a month, is $2.25.

“How can you go wrong with a $2 CPM?” asked Ketcham. “The television CPM for a similar demo could be 25 bucks.” Moreover, Arbitron’s survey at Roosevelt Field showed higher ad recall rates among Simon shoppers than among TV viewers when both groups saw the same spot.

And this highlights a simple truth: Whatever the on-screen fantasies of Hollywood comedian Adam Sandler, whose magic remote control pauses, fast-forwards and rewinds reality in the movie Click, consumers can TiVo past a TV commercial but not yet through their trip to the mall.