Shopping center owners are eternally searching for ways to squeeze extra dollars out of their properties. Walking through any major mall today reveals huge amounts of in-mall advertising. Posters on the backsides of mall directories, ads on garbage cans and benches, banners hanging from mezzanine levels and billboards both inside and outside of properties all carry advertisements.
Beyond that, concerts, children-themed events and other programs bring entertainment that often has a fairly high dose of sponsorship and advertising mixed in.
As Stan Eichelbaum, president of Marketing Developments, a Cincinnati-based retail consulting firm says, “It's about the mall as media.”
And there's been massive success on this front. Developers have struck up partnerships with movie studios and television networks to provide in-mall entertainment. There are partnerships with car companies to highlight new products by parking them in the middle of mall concourses. And there's the near-ubiquitous advertising that now plasters every conceivable surface within retail properties.
But one, despite many efforts by countless parties over the last two decades, has never been able to take hold: in-mall television screens broadcasting content.
Ventures like Skytron Corp., Food Court Entertainment Network's Café USA and Screenzone Media Networks were much ballyhooed, but problems with the quality of content along with technological gaffes led to one failure after another. Even Mills Corp.'s Mills TV has disappeared.
But despite those cautionary tales, a new pool of entrants has emerged.
Clear Channel Digital Mall Network — a joint venture between media giant Clear Channel and Montreal-based Digital Advertising Network Inc. aimed at bringing screens and content to mall food courts — emerged late last year. The company is pilot testing its program in malls in the New York andmarkets. In May, both Simon Property Group and Urban Retail Properties announced ventures.
For Eichelbaum, this new batch of entrants reviving in-mall television stirred up some old memories.
“I can remember sitting in a meeting with the head of a major developer's marketing department and the marketing heads of five or six department stores 20 years ago where I asked who'd actually had success with electronic media in their stores. Nobody had any success,” he says. “But when asked if they thought it would be refined and productive long term, everyone agreed. It's just no one thought it would take this long.”
The idea is simple. In-mall or in-store television networks should provide a gold mine of advertising revenue based on the audience potential advertisers can reach.
“The mall itself offers terrific connectivity to an exceptional demographic,” Eichelbaum says. “They are proven purchasers. They are the best spenders in that trade area. There's massive potential.”
According to ICSC research, the typical mall shopper in 2005 was female, 39 years of age and lived in a three-person household with median income of $51,000. Average mall shoppers visit properties more than three times per month and spend an average of 81.5 minutes at the mall.
That's a more targeted and potentially lucrative market than can be reached with, say, a television ad.
Yet, no venture to date has been able to capitalize on that promise. There have been dependability issues, lack of funding and problems getting advertisers to sign on. Still, the new crop seems ready to plug away and there's reason to believe that they've figured out the kinks and may succeed where everyone else has failed.
The Clear Channel venture has put large-format digital screens in mall food courts at properties in and around those New York and Los Angeles centers carrying, sports and content provided by Yahoo!, in addition to 30-second commercials. The content will be remotely programmed and put together in 15-minute blocks that will loop.
The venture has the considerable backing of the Clear Channel Corp. Moreover, partner Digital Advertising Network has had success with in-mall television in Canada for several years.
“DAN has established a broad footprint across Canada, with a presence in 66 shopping malls, reaching more than 8 million consumers weekly,” says Warren Stelman, president and CEO of Digital Advertising Network. “Entering the U.S. market is a natural next step for our company.”
The company prefers large screens in mall food courts because that affords the longest exposure to customers — an average of 32 minutes, according to Starch Research Services. Moreover, 45 percent of people that visit malls make a food court purchase where average sales per square foot are three times higher than mall stores.
Based on how the pilot program works, the venture estimates it could be in 200 malls within the next two to three years.
Simon, Urban join the fray
Simon, meanwhile, is trying to leverage its rank as the largest owner of retail real estate in the U.S. The REIT is teaming with French communications company Publicis Group to create the high-definition OnSpot Digital Network, which it says will provide lifestyle programming, news, shopping center content and advertising within Simon malls.
The companies have tested the venture at the Roosevelt Field Mall on Long Island and plan to install 2,000 screens at 50 Simon Malls by the end of the summer — an average of 40 screens per property. But beyond that, the venture has been tight-lipped about other details. It has not said where it is getting content from or talked about where screens will be positioned within Simon's properties.
At Roosevelt Field, the venture has carried advertising and programs from companies including Coca-Cola, Nintendo, Visa, Gap and Subway. Screens come in two sizes, including 50-inch diagonal screens measuring 47.4 inches wide by 28.5 inches high, and 126-inch diagonal screens measuring 121.2 inches wide by 74.4 inches high. The venture plans to charge $350,000 a month to sponsors for 30-second spots running on all 2,000 screens.
While the Clear Channel and Simon efforts are similar to networks that failed in the past, Urban's is a more novel concept. Urban is working with a Canadian content provider to create URTV. Unlike the other ventures, Urban's is aimed directly at retailers, not mall owners. Through another joint venture it has formed with MGM, Urban has access to the studio's film and television library. It will be able to pull from that for content from its network. In addition, it has satellite access from which original content can be generated from the Canadian studio and beamed across the country.
“This is a live satellite-fed, interactive television network that we feel marks the future of retailing,” says Ross Glickman, CEO of Urban Retail.
“It engages the retailer and the customer base and the retailer support staff and sales personnel,” Glickman says. “It's multi-faceted. This is not digital signage. This is not a common area electronic billboard. This is not about watching commercials. It is a television network that is business-oriented to the retailing community.”
URTV promises to be highly customizable, even down to the store level. Potential features also include RFID technology. So, for example, if a customer picks up a shirt off the rack, the RFID could trigger the television to broadcast a pre-loaded spot about the designer or brand.
Urban's venture also has the capability for two-way communication. The company envisions retailers using the system to broadcast information from corporate headquarters directly down to the store level.
So, for example, when a new selling season is beginning, Gap could mock up its floor set in a studio and then broadcast to every store in its chain how to set up its stores for the season.
Glickman says URTV will not meet the same fate because of its ability to be customized and because it's geared directly to retailers as a revenue generator, rather than something they are forced to subsidize through higher common-area maintenance fees.