In-store TV advertising on horizon

Customers at Newmarket Foodtown have been able to watch ads as they shop. Picture / Kenny Rodger

New television networks could be about to mushroom all over New Zealand, targeting customers in supermarkets, banks and retail chains.

Supermarket giant Progressive, which operates Foodtown, Countdown and Woolworths, finished a six-month trial in its Newmarket store last week and is deciding whether to proceed with a roll-out.

"A lot of people love it - but just because people are enthusiastic doesn't mean it makes commercial sense," managing director Richard Umbers said.

Big money could be at issue for those pursuing what are variously described as retail media networks, captive audience networks, digital media networks and even "narrowcasting".

In some cases, it has transformed retailers into big media players - with not just advertising but programmes on offer. Wal Mart TV is now the fifth-largest television network in the US and the New York Times recently reported advertisers paid between US$137,000 and US$292,000 ($192,500 and $410,347) for a single advertising slot running over a four-week period at its stores.

UK supermarket Tesco, thought to be the first retail adopter of the technology, has set a price tag of 200,000 ($528,000) for six months' sponsorship of its weather forecast this year and 375,000 for a year's sponsorship of the news on Tesco TV.

In New Zealand, Progressive's trial attracted advertisements from Red Bull, Nestle, Mainland and Tegel, among others, but Umbers said the decision was not just about dollars. "It has got to be something customers warm to. There's a visual assault in many supermarkets anyway without adding to that noise."

Key facts such as which stores had enough customer traffic to support advertising were yet to be established.

Others are also eyeing the technology. Foodstuffs' strategy and new ventures general manager Rob Chemaly said his company was keeping a close eye on developments. "We look at it as an opportunity, but is it our core business? Is it something we will do well?" he said. "It's one of those things where you need to balance the equations."

Digital Media Networks director Mark Levene, whose company is running the trial at Progressive's Newmarket store, said the network was being considered only for advertising, not programming. But because it was point-of-purchase advertising, it was highly effective and competitive in price compared with television.

"The consumer in there [the supermarket] is going to go and make a buying decision ... there's a huge delay between seeing an ad on TV and making a purchasing decision," he said.

Ali Boswijk, director of business development in Australasia for World Television, the company that broadcasts the MTV Awards in Europe, said her company was talking to New Zealand chains interested in piloting the technology, including a supermarket, a bank and a clothing chain. It hoped to have a trial running within three months.

"I think, essentially, advertisers are realising that mainstream advertising doesn't necessarily work in the way that it did for them - you have fragmentation [of the media] and the advent of technology that allows you to record over the ads, which is not here yet, but is coming," she said.

Regency Duty Free has been using a retail media network on a small scale for 18 months. Multimedia manager Gareth Lathey said the company now had over 18 screens at five of its stores based at Auckland Airport. It primarily uses the system for in-house offers and customer information but it has already branched into weather reports from key destinations and sometimes pipes Sky Television sports events through its system.

"It certainly attracts customers," he said.

Tesco TV

Advertisers wanting a 10-second slot every few minutes for two weeks at British supermarket Tesco must pay:

* Central thoroughfare aisle £30,000.

* Counters £15,000.

* Home entertainment zone £4000.

* Beer, wine and spirits zone £20,000.

* Health, beauty and baby zone £25,000.

* Grocery zone £30,000.