the impending in-store marketing revolution - WPP.com

an update on groundbreakingefforts to establish a universalin-store metricPG 2the media’s take on why so muchfocus is now being put on the storeas media – and what it meansPG 10highlights from other articlesdetailing profound changesaffecting marketing at retailPG 14an industry onthe vergeA new initiative from Nielsen and the In-Store MarketingInstitute moves retail closer to a measured mediumBY PETER BREEN, IN-STORE MARKETING INSTITUTECHICAGO — Data collected through theP.R.I.S.M. project may quite literally transformthe retail environment, and should have amajor impact on the future of marketing toconsumers.The Pioneering Research for an In-StoreMetric project has achieved its primaryobjective to measure retail traffic at thecategory level. Under the direction ofThe Nielsen Company, the initiative nowhas moved beyond traffic counts byincorporating store communication auditsto derive estimates for consumer reach.In other words, the in-store “audience” formarketing communications can now bequantified, which makes retail a measuredmedium similar to TV, radio, print and online.“This metric will allow everyone gathered inthis room to truly begin to treat and discussthe physical store as a marketing medium,”David Calhoun, The Nielsen Company’schief executive officer, told an audience ofmore than 1,000 gathered for a special paneldiscussion on P.R.I.S.M. at the In-StoreMarketing Expo in Chicago on Sept. 27.“We’ve come an enormous distance in anincredibly short period of time,” said PeterHoyt, executive director of the In-StoreMarketing Institute, which spearheadedthe first stage of the P.R.I.S.M. project withsupport from a consortium of consumerproduct manufacturers and retailers.Inability to measure the audience for in-storemarketing activity has long been a stumblingblock to treating retail as a viable medium forbrand-building consumer communication.2Published October 1, 2007

This obstacle has now been removed,members of the panel discussion said.“Because we are getting a better readon how in-store messaging impactsconsumers, we can create more effectiveways to engage them in the shoppingenvironment,” said Renetta McCann,chief executive officer of StarcomMediaVest Group. “This elevates the storeto the status of new media, as critical assearch or mobile or gaming in the overallmarketing mix.”But the P.R.I.S.M. project’s impact on theretail marketplace goes much deeper,according to panel members, because thedata unlocks a wealth of information thatcan be used to transform the way retailersand consumer product manufacturersmerchandise products and communicatewith shoppers.“P.R.I.S.M. can dramatically changethe way we as retailers create a morecompelling in-store environment byhelping us to truly anticipate the needs ofour customer,” explained Steve Bratspies,senior vice president of marketingfor Wal-Mart Stores Inc. “We’ll begindesigning stores that are more intuitivefor our shoppers. Stores that are easier tonavigate. Stores with products displayedin a customer-friendly manner. Ultimately,we’ll be able to deliver the informationthat customers need to make the bestpurchase decisions and make the in-storeexperience one of the most powerfulmarketing media.”“With P.R.I.S.M., we are going to be ableto measure reach by category, by retailer,”said Bob McDonald, chief operating officerof Procter & Gamble. “By taking this data[and] aligning it against the cost of specificphysical in-store executions, we are goingto be able to establish CPM — the costper thousand to reach those shoppersin a particular category and by store.This will lay the foundations for preciselymeasuring return on investment for specificexecutions or displays by category, byretailer. You are even going to be able toestablish ROI by geography – what worksbetter in Florida than in Illinois – or evenROI by seasonality.”INITIAL FINDINGS FROM P.R.I.S.M.Data collected by Nielsen In-Store duringthe second phase of field researchconducted this summer quantifies somefacts that marketers have believed –anecdotally, at least – for several years.“The retail audience is enormous,” saidCalhoun. “It is the largest audienceavailable today. Right now millions ofshoppers are in-store. But P.R.I.S.M. letsus know about more than just the totalaudience size for a retailer. It tells uswhere in the store the shoppers are andhow that changes by time of day and dayof week.”“In some food stores, the heaviest trafficflow is not through the carbonatedbeverage and snack aisles – which mightbe the conventional wisdom based onsales rates – but through the yogurt andeggs section of the store.”“Wal-Mart’s footprint across NorthAmerica is dramatic. Every day, morethan 20 million customers walkthrough our doors.”—Steve Bratspies, SVP Marketing,Wal-Mart“As a result, our stores are an incrediblypowerful media vehicle,” said Bratspiesduring his presentation. “But in reality,the store itself has never been trulyconsidered and leveraged among theranks of the top marketing and mediatools, even though its potential reach andeffectiveness equal if not surpass othertraditional media vehicles.”Secondly, there are significant numbers ofshoppers who browse aisles but don’t buyanything. “Until now, we have known a lotabout the people who made purchases,”said Calhoun. “However, now we haveContinued on next page3

Watching as You ShopRetailing: Big shops are using elaborate technology tomonitor and influence the behaviour of their customersLONDON — In a recent British television commercial, John McEnroe, aveteran tennis star, is seen racing his long-time rival Bjorn Borg arounda Tesco supermarket. After arriving in the checkout queue just ahead ofhis opponent, Mr. McEnroe is distraught to see an employee appear andopen another till, giving Mr. Borg the upper hand. The advertisment endswith a reference to Tesco’s “one in front” initiative, which aims to reducewaiting times by opening additional tills whenever there is more than onecustomer waiting at a checkout. This scheme has been running for manyyears, but Tesco recently updated it by investing in customer-monitoringtechnology supplied by Irisys, a British company.The system, called Smartlane, has two elements: sensors by the doorscount the number of people entering and leaving the shop, and sensorsby the tills work out how fast the queues are moving and how many“shopping units” — groups of people, such as families or couples, whowill make one transaction between them — are standing in each queue.(Shopping units are identified using an infra-red sensor that tracks thetrajectory and behaviour of “hot blobs” when they enter its field of vision;this approach is 95% accurate, says Chris Precious of Irisys.) All thisinformation can then be used to predict how many tills will be neededup to an hour in advance and monitor average waiting times and queuelengths. In Tesco’s case, a line longer than one shopping unit triggersthe opening of another till. Sir Terry Leahy, Tesco’s boss, said last yearthat the monitoring system had reduced waiting time for customers andhelped to boost the firm’s profits.Tesco is not the only retailer using technology to keep tabs on peoplein its stores. Mr. Precious says Price Chopper, an American grocerychain, is in the process of introducing Smartlane; and Marks & Spencer,a British shopping chain, uses Irisys’s infra-red sensors, as doesAbercrombie & Fitch, an American fashion chain. Brickstream, a supplierof customer-monitoring systems based on dual-lens cameras, whichare more accurate than single-lens cameras in tracking and countingapplications, counts big retail chains including Toys “R” Us, Office Depotand Walgreens among its clients.Rather than monitoring queue lengths, however, Brickstream’s system,called BehaviorIQ, is used by retailers to gather data on where theirPublished December 6, 2007customers go, where and how long they stop, and how they react todifferent products. This information can then be compared with thestore’s transaction log to determine the effectiveness of store layout,product fixtures and other variables. In-store designs and marketingcampaigns that work can be identified and improved upon, and thosethat do not can be replaced with something more profitable. Retailers,it seems, are buying the idea that by watching customers while theyshop — what might be called “retail surveillance” — and redesigningtheir shops accordingly, they can get people to spend more.ON THE SHOP FLOOROne of the largest customer-monitoring projects undertaken so far isP.R.I.S.M. (or “Pioneering Research for an In-Store Metric”), a collaborationbetween Nielsen Media, a market-research firm, the In-store MarketingInstitute, based in Chicago, and a consortium of consumer-goodsmanufacturers and retailers including Coca-Cola, Procter & Gamble andWal-Mart. The project, which completed its first big trial in September,involved the use of sensors at the entrance and exits and in some ofthe aisles of 160 stores across America. These sensors recorded dataon customer-traffic patterns, to which was added further informationrecorded by human observers. By comparing the resulting data withsales information, it was then possible to gain insight into shoppers’behaviour.Preliminary results from the P.R.I.S.M. programme included the findingthat two-thirds of shoppers who made a visit to the salty-snacks aislemade a purchase, but the people visiting the dairy aisle were far less likelyto buy something. When observational data on the number of childrenpresent during a shopping trip was taken into account, the results wereeven more detailed: the P.R.I.S.M. results showed that although childrentook part in only 13% of food-shopping trips, shoppers bought morewhen children were with them. Purchase of seasonal items was two anda half times more likely with children in tow, but surprisingly there was nocorrelation found between the presence of children on a shopping tripand higher spending on sweets.Continued on next page5

Continued from page 5With this kind of fine-grained data, says George Wishart, the head ofNielsen’s in-store division, retailers can adjust store layouts and staffinglevels accordingly. Although retailers think they know how to positionproducts in a way that will maximise sales, says Peter Hoyt of theIn-store Marketing Institute, “the science of adjacency is not a science.”With P.R.I.S.M., he says, the gut feeling that peanut butter should beplaced on a shelf next to jam in order to increase the likelihood of acombination purchase can be tested directly against sales data.“Shoppers are not just being monitored by cameras andsensors — sometimes speech is recorded, too.”Best Buy, a big American consumer-electronics chain, takes this astep further. It uses Brickstream’s BehaviorIQ cameras to collect dataon its customers’ behaviour patterns and has used this information todivide them into five customer types — young technology enthusiasts,suburban mothers, affluent early adopters, family men and smallbusinessowners — who want different things. Each group is thenprovided with an area of the shop designed to meet their needs.As the technology improves, it is getting easier for other retailers todo the same sort of thing. VideoMining, for example, a spin-out fromPennsylvania State University, uses a combination of video camerasand software to capture and analyse thousands of hours of footage ofcustomer behaviour. As well as providing information about customerbehaviour, the firm’s software can also determine each shopper’s sex,age range and ethnic group with an accuracy of around 80%, says JeffHershey of VideoMining. The result is an “activity map” which can helpretailers to identify the factors that drive higher sales. The system can evenbe programmed to detect the characteristic behaviour of shoplifters.Inevitably, all this raises concerns about privacy. Counting customerswith motion sensors as they enter a supermarket is one thing, butsorting them into social or racial groups using video analysis is another.Mr. Hershey responds that none of the footage or information aboutindividual shoppers is stored. Besides, says John Greening of theMedill School at Northwestern University, customers are generallywilling to give up some personal information if they feel they are gettingsome benefit in return. Rather than seeing customer monitoring as aninvasion of privacy, he considers it a means of making shopping a morepleasant experience for “time-compressed” (i.e., busy) consumers.These systems, he says, are “not a matter of Big Brother,” but rather ameans of gaining insight and “understanding motives.”LISTENING INShoppers are not just being monitored by cameras and heat sensors,however; sometimes their speech is being recorded, too. Recordant, anin-store monitoring company based in Atlanta, provides shop assistantswith digital-audio recorders, to be worn around their necks, whichrecord all their conversations with shoppers. At the end of each day therecording devices are plugged into special docking stations and therecordings are uploaded to Recordant’s headquarters for analysis. Itssoftware trawls the recorded dialogue for particular words or phraseswithout the need for any human input in order to provide accurateinformation on employee performance and customer behaviour.BRICKSTREAM MAPS A SUPERMARKET’S HOT SPOTSRecordant says that trials in 40 locations have proved the value of thetechnology: one retailer was able to show that there was a 300% increasein sales of products recommended by shop assistants to customers.By providing precise measurements of this kind, the technology allowsretailers to refine their training programmes and evaluate the effectivenessof promotions. They can even collect “competitive intelligence” byprogramming the system to search for the names of rival retailers, saysChris Etter, the chief executive of Recordant.Unlike systems based on video cameras or sensors, Recordant’stechnology is required to notify customers explicitly that theirconversations are being recorded. To this end, the recording devicesinclude a small video screen which displays a message informingshoppers what is going on. Mr. Etter admits that both employees andcustomers have expressed worries about privacy and have shown someresistance to the devices. But he likens this to the initial disquiet over therecording of customer-service telephone calls, something that is nowwidely accepted. Besides, he says, the system can provide protectionfor employees who get involved in disputes with fractious customers.As useful as customer-tracking systems may be for exoneratingharassed staff or minimising shoplifting, however, their primary objectivesare clear. In an age when traditional “bricks and mortar” retailers facestiff competition from online merchants, any means they can use to getcustomers into their shops and buying as much as possible is seen asa worthwhile investment. Long before the advent of e-commerce, Wal-Mart’s founder Sam Walton set out his vision for a successful retailoperation: “We let folks know we’re interested in them and that they’revital to us — ’cause they are,” he said. Customer-monitoring systems areunderlining just how interested, and just how vital.6© Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

Alive onArrival Publishedin Nov./Dec. 2007BY CHRIS HOYT, HOYT & CO.SCOTTSDALE, ARIZ. — In its October 1st edition, Advertising Age— that bastion of thinkers that has long held that retail is “tactical”and therefore awfully pedestrian — actually published an article onshopper marketing on the front page. The article acknowledged — inso many words — that retail may now be emerging as a new, legitimatebattleground for building share, extending equity and increasingloyalty. This breakthrough, if we interpret this article correctly, may beattributed to three things.First, the P.R.I.S.M. initiative promises a standardized, syndicatedmeasurement model to evaluate in-store consumer reach, therebyenabling advertisers to benchmark these results against moretraditional forms of advertising and communications investments.Second, the line-up of companies supporting the P.R.I.S.M. initiativevirtually guarantees industry-wide acceptance (assuming the resultsare verifiable). These not only include many of the top players in theCPG industry today (Nielsen, P&G, ConAgra, Campbell’s, etc.) but —significantly — no fewer than six top advertising agencies.As Renatta McCann, CEO of Starcom MediaVest Group North America,declared: “Shopper marketing is a new medium as important as theinternet, mobile or gaming.” That’s quite a statement from a segmentof the industry that formerly viewed retail as virtually invisible.Finally, the leadership of Procter & Gamble — the company that startedit all — and the company that is in so many product categories, isforcing its competitors to get good at shopper marketing just to stayeven. To satisfy Wall Street analysts who thought P&G was graduallywhittling down its traditional advertising expenditures, the companyannounced in September that it would now treat in-store marketingexpenditures as traditional advertising expenditures and, to that end,restated 11 years of advertising investments.Based on this, the indications are that P&G is currently spendingapproximately $500MM per year on its shopper marketing initiatives— an investment we know the ROI-based company would not makeunless the results were better than traditional alternatives.The bottom line, as Advertising Age points out, is that shoppermarketing is now growing faster than internet advertising, doublingsince 2004 and on a pace for a compound annual growth rate of awhopping 21 percent through 2010.This simply confirms a Reveries.com finding in one of the surveysit did on this subject last spring, in which 84 % of 167 respondingcompanies reported that they expected their shopper marketingbudgets to increase over the next three years — a remarkably highand unusual number.STAKEHOLDERS ALIGNFor once, all key stakeholders have a vested interest in making itsuccessful for each other. Retailers view shopper marketing as themeans by which they can increase customer loyalty through relevancyand therefore the mechanism by which they can differentiate inmeaningful ways on a non-price basis. This is clearly working forcompanies like Safeway, Kroger and Best Buy.Manufacturers view shopper marketing as a clear way to establish ameaningful competitive edge — more specifically, as an opportunityfor significantly better targeting of the shopper in an environmentwhere they know they will be able to reach (or “touch”) 100 percent oftheir target consumers at least 2-3 times per month (or more!) everymonth of the year.In addition, shopper marketing offers suppliers the basis for truecollaboration with retailers on levels previously unheard of, as bothwork together to identify, segment and activate the shopper. With theadvent of P.R.I.S.M., advertising agencies can no longer afford to turnup their noses at retail as manufacturers begin to use P.R.I.S.M. resultsto reallocate marketing spending into those media that deliver thehighest ROI — and now this will include retail. Those in the forefrontof this, like Starcom MediaVest, will clearly prosper as manufacturersstart to seek out agencies that have made it a priority to become “bestpractitioners” with respect to retail advertising and communications.Continued on next page7

What’s In Store: The Riseof Shopper MarketingBY JACK NEFF, ADVERTISING AGEP&G, Wal-Mart, Nielsen Dive Into MediumThat’s Growing Faster Than WebCHICAGO — So this is what marketing has cometo: The hottest medium around may be pastedto the floor at Wal-Mart or dangling from a shelfon aisle five at Safeway, segmented into suchdayparts as “national weekday cereal aisle.”Laugh if you want, but some people believeshopper marketing will reshape marketing forsome very big spenders. Senior executives fromthe world’s biggest advertiser, biggest retailerand biggest media-buying agency turned upat the In-Store Marketing Expo in Chicago lastweek to tout a new way of measuring shoppermarketing by the world’s biggest research firm,Nielsen Co.10It was just one more milestone for shoppermarketing, which is growing faster than Internetadvertising — doubling since 2004 and on pace fora compound annual growth rate of 21% through2010, according to a draft study by Deloitte fromthe Grocery Manufacturers Association.“Shopper marketing is a new medium as importantas the Internet, mobile or gaming,” declaredStarcom MediaVest Group North America CEORenetta McCann at the announcement of pilotresults using Nielsen In-Store’s P.R.I.S.M.initiative, essentially a ratings system for instoremedia and marketing that measures reachand frequency similar to TV. “It’s a brand-newballgame, and we’re all in.”P&G steps up spendingLate last month, the world’s largest advertiser,Procter & Gamble Co., restated 11 years ofadvertising expenditures in its financial reports,largely to reflect spending on shopper marketing.The moving parts in the restatement suggestP&G is spending at least $500 million annuallyon shopper marketing. And the Deloitte/GMAdata suggest the marketer may actually be abit behind others in the industry in share ofmarketing spending there. P&G also recentlymoved many of its shopper-marketing executivesto the same brand teams that determine the restof its $8 billion in global ad spending. Nowhere,however, was the dissonance between shopperm a r k e t i n g ’s g ro w i n g i m p o r t a n c e a n d i t s o f t e nlowly appearance more apparent than at the In-Store Marketing Expo. As some of the top namesin marketing talked theory in the auditorium, thepractice of shopper marketing was in full displayin the adjacent convention hall, where the latestvendors of video-enhanced shopping carts viedfor attention alongside makers of corrugateddisplays.This brave new world means buyers need toknow not just how to bet in May on ratings forfall shows but also how to hedge the price ofcorrugated paper for end-aisle displays or hagglewith News Corp. over something called “shelftalkers.”It wasn’t so long ago that media agenciesweren’t in the game at all, said Peter Hoyt,executive director of the In-Store MarketingInstitute. Now he knows every time a bigmedia review is under way, he said, because

“Shopper marketing is a new medium asimportant as the Internet, mobile or gaming,”declared Starcom MediaVest GroupNorth America CEO Renetta McCann.“It’s a brand-new ballgame, and we’re all in.”Published on October 1, 2007the institute starts getting hits on its website from media agencies— and new members, since much of the data there is for membersonly.Large stakesFollowing SMG’s initial involvement in the Nielsen/P.R.I.S.M.initiative, five media agencies have joined the consortium behindthe effort, said George Wishart, global managing director ofNielsen In-Store. The agencies are following the media companies;the parents of the four leading broadcast networks have a stake insome facet of in-store media.So Nielsen needs to get in on the action to broker the deals, thoughP.R.I.S.M. hasn’t yet applied for Media Ratings Council certificationas a bona fide currency.The Pioneering Research for an In-Store Metric initiative uses acombination of electronic eyes and human counters to track howmany people travel down each aisle in 160 stores representingabout 60% of package-goods retail volume to date. P.R.I.S.M. alsomeasures what percentage of people who shop in an aisle actuallybuy something there.It’s the crowning achievement so far of Nielsen CEO DavidCalhoun’s efforts to connect the pieces of the far-flung researchfirm to create new services. He likened Nielsen In-Store to his firm’sTV and Internet ratings. “It will allow in-store to rightfully take a seatat the marketing table and be considered in an analytical mannerconsistent with all good marketing and media planning,” he said.“What you can measure, you can manage.”Therein also lies the pin that could prick the bubble. P&G ChiefOperating Officer Robert McDonald politely declined to predictwhether better measurement would lead P&G to shift more mediamoney in-store. But he noted another recent Deloitte study, thisone showing that nine of 10 trade promos don’t have a positivereturn on investment.THE RIGHT TOOLHe said P&G’s spending on TV and print has been optimized extensivelyin recent years thanks to audience measurement and ROI analytics, butnot shopper marketing. With P.R.I.S.M., he said, “we’re going to havethe data to make the right choices.”Mr. Calhoun said shopper marketing, if the definition expands tothe trade-promotion dollars manufacturers pay retailers, displays orfeatures in circulars, is already is a half-trillion-dollar business.And the same marketers planning to spend more on shoppermarketing are planning to spend around 2% less annually on tradepromotion, the Deloitte/GMA study found. In the end, P.R.I.S.M.could help manufacturers pry more money out of the black hole oftrade promotion and put it into some form of measurable, brandbuildingmedia.© Advertising Age, 200711

In-Store TVSways ConsumersBY LAURA BLUM, ADWEEKPublished August 29, 2006NEW YORK — Consumers for the most partenjoy watching ad-supported media whilegrocery shopping and their buying decisionsare often influenced by such messages.So says a Nielsen Media Research studythat examined in-store media providedby Fairfield, Conn.-based SignStorey.Albertsons and Pathmark are among thegrocers that carry the SignStorey videonetwork, which is now in 1,300 stores.According to the study, 68% of thosesurveyed said in-store messages would swaytheir product purchasing decisions. Another44% said they would swap a product theyhad intended to buy for one advertised onSignStorey.The study, Nielsen’s first customizedanalysis of supermarket data, gauged overallSignStorey viewership at close to 40%. (Thatfigure — which represents approximately 22million shoppers — included consumers whobriefly glanced at the screens, listened tomessages or watched intently for extendedperiods.)SignStorey CEO Virginia Cargill describedher network as “an enhancement to thecustomer.” She added, “Retailers get ahalo effect, since they’re viewed as beingmodernized.”The Nielsen research provides “theadvertising community with the metrics theyneed to effectively utilize in-store media,”said Jim Spaeth, founding partner of SequentPartners. In-store media are useful becausethey “help advertisers better understandand quantify the opportunity to reach targetdemographics,” he said.“In-store television is maturing as anadvertising medium,” said Beth Corbett, vicepresident of New Media Services for Nielsen,which is owned by Adweek parent VNU.According to research house PQ Media,in-store TV ads tallied nearly $100 millionin 2005 revenue, a 45% increase from theprevious year.Some say the numbers are significantlyhigher. For example, Mark Mitchell, PremierRetail Network’s executive vice president ofad sales, said his network alone sold roughly$100 million in in-store ads in 2004, withsales jumping more than 10% the next year.Other in-store networks include InStoreBroadcasting Network and Ignition.© AdWeek, 2006According to research housePQ Media, in-store TV adstallied nearly $100 million in2005 revenue, a 45% increasefrom the previous year.12

Wal-Mart, P&GSee SalesThrough a PrismPublished on May 16, 2007BY CONSTANCE VON HOFFMAN, BRANDWEEKMIAMI — Wal-Mart and Procter & Gamble today announced the rolloutof a major effort to measure the effectiveness of in-store marketing.“This is an initiative we think will forever change retail marketing,” saidWal-Mart CMO Stephen Quinn during a session at the Consumer 360conference in West Hollywood, Fla. The effort, called P.R.I.S.M., usesinfrared sensors around the store to measure traffic and consumerexposure to product displays and other marketing materials likebanners and store TV networks. It is organized by Nielsen In-Store, adivision of Brandweek’s parent company.Dina Howell, who heads worldwide in-store efforts for P&G, said U.S.stores would start to be equipped with the sensors within two weeks.In addition to Wal-Mart, the devices will be put into 150 different retailoutlets—including convenience and grocery stores—by the time ofthe project’s full launch in early 2008. Although the study is currentlyonly being rolled out in the U.S., Quinn and Howell said it will be inplace internationally within a couple of years. The consortium fundingP.R.I.S.M. also includes Albertsons, Kroger, Walgreens, 3M, WaltDisney, Coca-Cola, Kellogg and Miller Brewing.“This will have a profoundimpact on the whole industry,”P&G’s Howell said.“It’s starting in marketing butit will impact operations, sales,everything.”and that further refinement since then has increased that to 85%.P.R.I.S.M. is designed to predict consumer reach by category, areaof the store, retail format, and day of the week. “This is not a nice-tohave;it’s a must-have,” she said afterward.One measure of how important Wal-Mart sees this effort is the fact that ithas contributed sales information from 1,000 of its stores to the study—atenfold increase over the amount of data the company had ever previouslyreleased according to Quinn. Another key part of the study is measuringthe difference between what companies plan to have displayed in storesand what actually winds up being displayed. “We need to know the truthabout this,” Quinn said afterward. “We need to know how much of this isfact and how much is myth.”Although Howell declined to speculate on what sort of impact this willhave on the marketing mix in the future, earlier this month CEO A.G. Lafleymade it clear that in-store is growing in importance to P&G. “If you stepback and look at our mix across most of the major brands it is clearlyshifting, and it is shifting from measured media to in-store to the Internetand to trial activity,” Lafley said during a call with investment analysts.Paul Fox, ER leader for P&G’s global operations, said Procter is steppingup efforts to measure marketing channels “that have been around forever.”He said P&G would be rolling out a word-of-mouth measurement methodwithin the next 18 months.© BrandWeek, 2007“This makes the store a part of measured media,” said Howell. Shesaid that a pilot effort that ran for two weeks last year achieved aninitial 76% accuracy rate in its predictions of consumer behavior13

in-store in the newsS“ hopper marketing is hot and growing faster than internet advertising —doubling since 2004 and on pace for a compound annual growth rate of21% through 2010, according to a draft study by Deloitte from the GroceryManufacturers Association.”AD AGE, OCT. 8, 2007T“ he collaboration of numerous big-name marketers on the projecthighlights increasing emphasis on in-store marketing. Consumerproductscompanies are using increasingly sophisticated supermarketaisle displays or buying ads on in-store TV networks, hoping to captureshoppers’ attention right before they decide which product to buy.”WALL STREET JOURNAL, SEPT. 27, 2007“ If successful, P.R.I.S.M. will be a boon to marketers and retailers,who have long had to live with the inexact science of in-storemarketing.”SUPERMARKET NEWS, OCT. 1, 2007W“ ith the advent of P.R.I.S.M., advertising agencies can no longerafford to turn up their noses at retail as manufacturers begin touse P.R.I.S.M. results to reallocate marketing spending into those mediathat deliver the highest ROI — and now this will include retail. Thosein the forefront of this, like Starcom MediaVest, will clearly prosper asmanufacturers start to seek out agencies that have made it a priority.”THE HUB MAGAZINE, NOV. 11, 2007F“ or marketers, the opportunity to communicate with shoppersdynamically while they’re shopping – is too good to resist.”FORBES, OCT. 30, 200714

C“ ompanies consider shopper marketing a competitive advantage and marketleaders have started mobilizing their shopper marketing efforts by allocatingmore funds, restructuring their organizations, investing in technology andresources, and re-evaluating their collaboration efforts with partners and serviceproviders...(they believe that) by executing shopper marketing properly, they cangain a significant competitive advantage in the next 3 to 5 years.”DELOITTE & GMA’S SHOPPER MARKETING, OCTOBER 2007T“ he category...appears to be gaining acceptance among advertisers at a timewhen television audiences are fragmenting amid competition from the internetand cable, and technology is allowing viewers to skip past commercials.”FINANCIAL TIMES, SEPT. 7, 2007A“ s overall marketing budgets grow at a rate of just 2% per year, marketersexpect to see an increase of 21% in shopper marketing plans through2010, and retailers expect to see an increase of 26% in the same period.”MEDIAPOST PUBLICATIONS, OCT. 16, 2007The consumer companies are betting that a sophisticated understanding of“shopping patterns will eventually help boost sales of everything from soap to softdrinks, and help them invest marketing dollars more efficiently. That’s increasinglyimportant as store shelves are more crowded and nervous consumers are watchingtheir spending. (P.R.I.S.M.) data may help shape supplier decisions on shelving andmarketing products inside the store, and could alter the way retailers lay out andbuild their supermarkets.”CNNMoney.com, NOV. 1, 2007T“ he need for retailers to demonstrate that correlation has become increasingly importantin recent years as spending against the audience they deliver has grown. Major retailersrecognized the untapped value of the audiences that are in their stores, which in the case of acompany like Wal-Mart, has approximately 127 million customers in its stores each week.”RETAILING TODAY, JUNE 18, 2007T“ he ability of marketers to measure the in-store audience size is expected to putthe in-store medium on an equal footing with other consumer communicationvehicles such as radio, television, newspapers and magazines.”RETAILING TODAY, DEC. 2007/JAN. 200815

an industry on theverge of reinventionARTICLES & INSIGHTS ON THE GROWTH OFTHE IN-STORE MARKETING INDUSTRYBACK COVERFOR MORE INFORMATION, PLEASE CONTACT THE IN-STORE MARKETINGINSTITUTE TODAY AT (847) 675-7400 OR VISIT WWW.INSTOREMARKETER.ORG7400 Skokie BoulevardSkokie, Illinois 60077