It's no small task—given to me by the editors of this magazine: update the readers on the latest industry efforts to develop shopper engagement metrics models, including the efforts of the Marketing at Retail Initiative (MARI). A topic that has generated so much debate and so much soul searching of late, measurement is a subject that will be high on the radar for some time to come. Here's a primer, and a look at one initiative that is gaining momentum: food for thought-and action-for the premiere issue of Marketing At Retail magazine. With fragmentation occurring at a fast pace, with less and less time being spent by people engaging with traditional forms of media such as TV, radio, and print, CPM has been rising for these media even as ratings and recall continues to decline. It is no wonder. Advertising agencies with their brand partners seek other channels that are relevant and effective when communicating with their customers.
The media mix revolution has begun. In Bob Garfield's book The Chaos Scenario, he has foreseen the collapse of the old media model. This collapse will be followed by a chaotic race by new media to develop measurements. Not just reworks of the same old metrics but measurements involving engagement, effectiveness and results.
The fact that outdoor advertising has doubled since the mid '90s, the level of spending on internet advertising has increased dramatically over the past five years, and new specialized at-retail advertising agencies are rapidly joining the market confirm that the revolution is under way. Agencies expanding into retail marketing include WPP, Saatchi & Saatchi X, MediaEdge, Omnicom and G2 to name a few.
As advertisers are looking for new and effective ways to engage consumers they are going back to and rediscovering marketing at-retail. They have come back to that place where consumers become shoppers. The place where shoppers return time and time again, looking for information that reminds them about their favorite products or engages them with new and exciting promises for products they just discovered.
However, for some marketers, the at-retail medium had become a forgotten element in the marketing mix. Many successful companies use marketing at-retail programs and have seen significant and relievable sales lift as a result. In a 2004 POPAI research study of chain drug stores, 70 percent of the marketing at-retail programs drove incremental sales. With repeat trips and extensive exposure from chains and network, retail provides the idea branding environment. Again POPAI research has shown that large chain supermarkets average 8,500 people visiting a store per week. When chain-wide marketing at retail programs are rolled out, you can see the reach start to approach that of other media.
THE MEASUREMENT CHALLENGE
By introducing marketing at-retail into the mix, advertisers and their agencies face a challenge. How does one measure marketing at-retail and how does that measurement compare to other media?
Unlike other advertising media, marketing at-retail metrics can be directly tied to increases in sales. But sales increase doesn't provide a common comparison with other advertising media and it doesn't measure branding influence, customer engagement or effectiveness. For this reason many advertising agencies haven't explored marketing at-retail as part of the marketing mix. They could not measure and compare. As a result, they could not justify placement. They could not easily verify that pro-time-frames and areas and together with GRPs provides for Average Frequency grams had been implemented as designed. And because it was not part of the upfront marketing strategy, it was rarely planned well in advance. There was also lack of understanding of how an in-store execution should look in order to provide benefit in an integrated marketing campaign.
Crucial to at retail development is the importance of "shopper based" marketing at-retail—measurements of engagement and effectiveness. By tracking individuals' in-store shopping patterns and behavior we will be able to observe, measure and calculate a number of key metrics that enable the valuation of at-retail media.
The marketing at-retail industry will now be taking significant steps forward to develop standard metrics to be syndicated for all in the industry use. POPAI, with others from around the world, has begun to develop this research standard under a program called the Marketing at Retail Initiative (MARI).
Early in 2005 some of the leading practitioners of marketing at-retail industry met to discuss developing metrics standards for the at-retail industry. The attendees, included retailers, brand marketers, agencies, and marketing at-retail producers, agreed on the need to move quickly to form a broad coalition of stakeholders to better understand how to impact shopper behavior through effective and efficient use of marketing at-retail.
The metrics generated from this initiative will drive a measurement model that will be used for planning at retail branding placements in the same way that other media uses tools are used to forecast and analyze engagement, effectiveness and Return on Investment.
MARI participants seek to drive industry knowledge and best practices to develop common measures similar to other media, cross-refer-enced to other media and complete relevant case studies. They have identified a series of objectives that need to be developed and tested to enable syndication to become operational, namely:
- Development of in-store GRP and TRP for the total store and specific ad zones within.
- In-store advertising Proof of Placement.
- Test delivery metrics towards an industry standard methodology to measure in-store communication and efficacy.
- Development of industry accepted methodology to measure ROI.
The areas to be measured are:
- Audience and engagement, which is the basis for impressions and GRPs
- Cost, which together with impressions provides for CPM and together with GRPs provides for Cost per Point
- Net Reach, across a variety of time-frames and areas and together with GRPs provides for Average Frequency
THE AUDITING CHALLENGE
Proof of placement is also important in the media measurement context. Print media are audited for circulation to assure advertisers that the right numbers of copies were distributed. Television programs are tracked electronically to assure all parties that they are successfully broadcast within each local market with an affiliate. Auditing of retail media will be required to compete effectively with traditional media. Prior POPAI studies have documented both the costliness of manual audits and the promise cost efficiency of RFID-based audits. RFID audits will not be included in this initial trial.
The ROI measurements at-retail must be compatible with the various ROI measurements employed today in other media, such as Market Mix
Modeling and Trade Promotion evaluation. Beyond the short-term evaluative framework, longer-term branding effects will be considered. Since promotional marketing at retail activities offer short-term effects above all and advertising activities offer both short-and long-term effects, comparisons between these two marketing activities will require the study of long-term effects through syndication.
The scope of the project is to field test the model simultaneously in the United States and the United Kingdom, with plans to eventually expand globally. RMS Instore (a WPP company) has been chosen to field test the model. The research by RMS Instore will use leading edge shopper research techniques incorporating eye tracking and digital video analysis software to identify and isolate the metrics.
Several potential retail partners have already committed to the project such as Walgreens, BP and Safeway in the U.S. Brand sponsors have also been keen to develop this joint approach such as Frito Lay, Pepsi. In the U.K. the initiative is concentrating on grocery for comparative purposes with Morrisons Supermarkets providing the base platform. Brand sponsors include Unilever and Diageo. As this article is being written, several additional brand sponsors are finalizing their participation for the October 2 trial.
This initiative is indeed what the marketing at-retail industry must provide marketers in order to be considered in the new media mix. It will drive at-retail into the advanced marketing planning stages, especially when validation and accountability become available. Marketers have known all along that at-retail is important to them, but they have not had the tools available to them to plan or budget properly. This is the first step towards filling the void caused by the media revolution.