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 / Winter 2008 /Issue 53(originally published by Booz & Company)


Major Media in the Shopping Aisle

Ultimately, it will require collaboration among various players to develop this new media frontier. With the right push, in-store video advertising can achieve its own form of hyper-growth. Given the unique potential of in-store marketing to reach customers in a way that no other form of media can achieve, that push would be an effort worth making for everyone in the marketing and media ecosystem. 

Marketing by the Numbers
by George Wishart

Historically, successful retailers were efficient at two things: logistics and procurement. Then Wal-Mart Stores Inc. came along and taught everybody that they didn’t really know anything about logistics after all, and they couldn’t dream of matching Wal-Mart’s muscle in buying. So what did retailers fall back on? Marketing, branding their stores, differentiating themselves, and investing in their consumers in ways that they never had before.

Retailers and marketers alike need to understand the return they’re getting on these activities. Spending on in-store programs, if consumer and trade promotions are taken into ac­count, is now greater than spending on paid media advertising. There has always been some evidence that the spending was worthwhile: Retailers and manufacturers could see some short-term increase in sales volume as a result, and there was anecdotal evidence of such spending’s benefits for long-term brand building, as it reinforced a brand’s image and generated trial and repeat purchases. But ultimately, the people who decide where to spend marketing budgets need metrics to justify their choices. They also need to overcome a certain psychological block: Many people in the marketing world do not believe that in-store activities truly contribute to brand equity.

So we at the Nielsen Company jumped into the deep end and said that we would create a set of metrics that would quantify the value of in-store marketing. Pioneering Research for an In-Store Metric (PRISM) is an initiative that Nielsen launched with the In-Store Marketing Institute and a consortium of retailers, manufacturers, and media agencies. The goal of this project is to determine reach and frequency for marketing messages in stores, in the same way we can deliver that data for ads on TV or in a magazine. To do so, we audit a store in two ways. First, we install sensors at the entrances and place auditors in the stores to understand store traffic. Second, we divide the whole store into four-foot (1.2-meter) sections and record every marketing message in each section — every display, every digital sign, every flyer. And then we track that data against the store’s daily sales. With this information, we can now answer three key questions: How many people were in the store? What marketing messages did they see? How did those messages affect sales? We have a much better understanding of how various marketing vehicles work in the store, and how marketers can use a mix of methods to achieve certain results.

For example, consider “Brand X” Hair Care. Like all products, Brand X ultimately strives to get the highest possible number of gross impressions (the most distinct encounters in which a consumer views the brand’s marketing message) and the greatest possible rate of audience conversion (the percentage of consumers who walked through the store area containing a particular category and bought a product within that category).

Thanks to the data gathered by PRISM, Brand X knows that in-store marketing garners more gross im­pressions than any other form of media — more so even than TV ads on American Idol, currently the highest-rated U.S. broadcast television program in prime time. Within the store, though, Brand X could generate more impressions than it does; the hair-care section gets only about 10 percent of the store’s traffic. However, the hair-care category does have a high rate of audience conversion — 65 percent of people who visit its section make a purchase.

Logically, then, if Brand X can just get more people into the section, its sales will increase. PRISM data shows that some in-store marketing vehicles are better than others at attracting traffic — specifically, for Brand X, flyers placed over displays, which are most powerful in grocery stores; sign­age, which works best in mass outlets; and floor graphics. Given this knowledge, Brand X can better plan its in-store marketing mix across channels. And as in-store media becomes more technologically advanced and more sophisticated at attracting customers, PRISM and other such systems will continue their role as arbiters of information, helping marketers judge which new media will work best, in which parts of the store, with which customers.

George Wishart is global managing director of Nielsen In-Store, a division of the Nielsen Company.

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  1. Tom Ehrenfeld, “Starbucks and the Power of Story,” s+b, Summer 2008: Overview of books about the preeminent creator of retail experience — without (much) in-store media (yet).
  2. Rich Kauffeld, Johan Sauer, and Sara Bergson, “Partners at the Point of Sale,” s+b, Autumn 2007: Explains why shelf-centered collaboration between manufacturers and retailers can provide the behind-the-scenes infrastructure needed for in-store media to truly connect.
  3. A.G. Lafley and Ram Charan, The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation (Crown Business, 2008): Contains the P&G CEO’s description of two “moments of truth” for reaching consumers: at the shelf and during each use of the product.
  4. Leslie Moeller and Edward Landry, with Theodore Kinni, The Four Pillars of Profit-Driven Marketing: A Proven System for Maximizing Creativity, Profitability and ROI (forthcoming; McGraw-Hill, 2009): Detailed guide to practices and organizational processes needed to implement any form of marketing metrics, including those required for in-store marketing.
  5. Tom Ryan, “Walmart Introduces Smart Network,” RetailWire, Sept. 4, 2008: News article about the introduction of this IPTV network to 2,700 stores.
  6. Christopher Vollmer, with Geoffrey Precourt, Always On: Advertising, Marketing, and Media in an Era of Consumer Control (McGraw-Hill, 2008): The digital age has reshaped all marketing imperatives and the industry as well; compelling context that shows why the moment is right for in-store media.
  7. In-Store Marketing Institute Web site: Electronic home of the PRISM project for measuring the effectiveness of in-store media.
  8. For more articles on marketing and sales, sign up for s+b’s RSS feed.
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