Wal-Mart TV: will consumers tune in, or out?
Every day, Wal-Mart touches more consumers than a typical country's census bureau counts in a year.
Small wonder the world's largest retailer is looking to significantly expand the in-store television network that's presently available in 2,600 locations. This includes new equipment, new programming, and the installation of 42-in. LCD TV monitors throughout the store. Already, the Wal-Mart TV captures approximately 130 million viewers every four weeks, placing it in the top five TV networks in the U.S.
Not surprisingly, major advertisers such as PepsiCo are already on board. Many more (at least, according to Wal-Mart) are signing up.
In effect, Wal-Mart is pioneering what could be referred to as retailer-generated media (RGM). Like consumer-generated media, advertisers can influence, but not entirely control, this ad platform.
Good for the Manufacturer or Consumer?
Is this a good thing? Is Wal-Mart TV a net positive for manufacturers? More important, what about consumers? Is this the type of content consumers truly want or need as part of the in-store shopping experience? Answers are hardly obvious, particularly against a backdrop of heightened retailer leverage, as well as consumer backlash against advertising.
Last week, I did a fair amount of "eflycasting" to a couple of online marketing message boards and various contacts in my Outlook directory to gather feedback on the issue.
Manufacturers won't go on record as saying this, but they certainly are asking hard questions about how a turbo-charged version of the end-aisle display will play out for their products and services, not to mention the balance of power between retailer and manufacturer.
Kelly Mooney, an expert on shoppers and author of the shopper behavior book, "The Ten Demandments," considers what Wal-Mart is doing a "brilliant move" on its part. "They are leveraging their size, their reach, their physicality, and more. Not to mention, they, too, are feeling the squeeze on margins and growth is increasingly challenging. This could translate into huge dollars to their bottom line."
As for the actual advertising, some see real potential. Rishad Tobaccowala, president of Starcom MediaVest (SMG) and a digital pioneer with whom I had the pleasure of working while at Procter & Gamble, wrote to me in an email, "We are in the 'era of visual engagement' where television will be even more important in the future than it is today." Wal-Mart TV, he explains, falls into the category of "out-of-home video" -- not unlike the new video billboards in Times Square.
Such networks, Tobaccowala said, will "become part of the communications mix for many advertisers," and this is just the beginning. "Soon there will be video on grocery carts too as the price of technology drops and wireless broadband allows customized and localized delivery of video."
Media or Merchandising?
Is this media or merchandising? If this is just standard TV-inspired broadcast media, how do we know it will truly work?
If this is a merchandising play, does it even matter if it's truly effective? Who's to say this isn't yet another bargaining chip in the broader trade game? Today, you can leverage trade funds for shelf-talkers and end-aisle displays. Tomorrow, in the world of Wal-Mart TV, manufacturers will be able negotiate virtual posters.
It may be great for the environment -- retailers won't need as much cardboard. But I keep asking myself, is this truly good for the consumer? At a time when consumers feel overwhelmed with advertising, are we really making their lives simpler and hassle- and clutter-free in an already hectic shopping environment?
Former media researcher Bill Denneen posted a thoughtful response to my inquiry on a marketing bulletin board. Wal-Mart TV "just doesn't fit," he explained. "Shopping is a mobile activity, whereas television is sedentary. Shopping involves continuous visual scanning of the environment, where television tries to lock your gaze.... It can't be an important part of the in-store experience."
Can Wal-Mart overcome such challenges and truly make the messaging useful and relevant to consumers? In a recent U.K.-based retail conference, Saatchi planning and insight director Gareth Ellis noted that "just .05 percent of in-store messages are currently 'genuinely relevant' to consumers, despite the fact that 75 percent of purchase decisions are made in store."
Will this ad model improve that track record? Forty-two inch LCD monitors are nothing to sneeze at, but they draw from a TV foundation. If it turns out their messaging doesn't work and there's no real value in the messages, the manufacturer and, ultimately, the consumer will likely end up absorbing the cost.
What's the Consumer Think?
The critical question for Wal-Mart is: what do consumers actually think about this?
I decided to ask a few consumers myself and even hosted a small forum. Reactions were mixed. Some saw value if the monitors work to explain and describe product benefits. Noted Virginia W., "I would support the idea if the main emphasis was information, such as how to tie a scarf, cook a particular recipe, care for plants, repair a car, etc."
Some were more skeptical, citing ad clutter and the downside of increased impulse purchases. Said Lisa R., "As a shopper, I know I don't want to be surrounded by children in the throws [sic] of a tantrum because they've been told they can't have the toy/snack/whatever they just saw on the TV monitor."
Added Chris C: "If anything, excessive advertising tends to turn me off, and sometimes I make a mental note not to patronize a certain business or buy a certain product because the ads are so intrusive."
Consumer accepted or not, the advent of Wal-Mart TV promises to rewrite the marketing script for manufacturers and their agencies. No one can really ignore this because, frankly, advertisers have nowhere else to run on the advertising front.
So don't be surprised if we begin to see more traditional agencies, as well as media integrator shops, start to form "retail advertising" groups, not unlike the recent burst of shingles around "branded entertainment."
We may also see a steady migration from Madison Ave. down to Fayetteville, AR. After all, who's going to advise all the legions of shopper teams about media optimization, RGM rates, and message rotation? In this new world, the guy selling Milk-Bones may well have a media buyer standing next to him.
Focus on Consumer Value
With such armies at work, something powerful may well emerge, perhaps even a cross-channel synergy between the Internet and Wal-Mart TV we haven't even considered. But one thing is clear: consumers are increasingly making demands, and they can stand only so much advertising. Without genuine value, they'll simply become more cynical.
Wal-Mart and other mega-retailers are in a unique power position to claim value. Whether they can truly create value through an in-store TV network is a question we probably should keep asking.
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Pete Blackshaw, whose professional background encompasses public policy, interactive marketing, and brand management, is executive vice president of strategic services for Nielsen Online, a combination of Nielsen BuzzMetrics, a firm Pete helped cofound, and Nielsen//NetRatings. One of Pete's key focuses is helping brands interpret, manage, and act on consumer-generated media (CGM). A former interactive marketing leader at P&G and founder of consumer feedback portal PlanetFeedback.com, Pete cofounded the Word of Mouth Marketing Association (WOMMA). He authors several blogs, including ConsumerGeneratedMedia.com, and is the author of an upcoming book from Random House, "Satisfied Customers Tell Three Friends, Angry Customers Tell 3000: Running a Business in Today's Consumer-Driven World."
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