Smart Network thrusts Wal-Mart into media role

News

NEW YORK It’s been a long time coming, but Wal-Mart finally unveiled its in-store media and marketing platform Wednesday. And the audience of mostly Wal-Mart suppliers and service companies at the new Times Center in midtown Manhattan listened attentively to a description of the new initiative, dubbed The Wal-Mart Smart Network, which many believe could greatly affect how CPG companies allocate their ad spend.

When the dust had settled on the 60-minute presentation, anchored by chief marketing officer Stephen Quinn, the vendor audience had been given its first look at the new in-store media network, which at its core is an interconnected series of in-store television monitors feeding all sorts of information to consumers, ranging from retailer-generated welcome messages to advertiser-generated marketing programs designed to move more product. 

Beyond the message on the TV screen, however, there were two important underlying messages delivered during Wednesday’s presentation:  In-store media is about to become a major competitor for the ad spend of CPG companies; and Wal-Mart, for its part, is positioning itself within this arena as a major media broker, not only in control of the pipeline, but also heavily involved in the buying, placement and tracking process for each marketing program. 

“We’re rethinking the strategies and tools of partner marketing. In fact, we’re reinventing it,” Quinn told suppliers at Wednesday’s event.  “We’ve all seen co-op marketing move from a model where shared supplier-retail investment used to measure money and exposure … and eventually a new equation emerged where the supplier and retailer really do win.  Well, now we’re going to change the equation.  Not only will we both win, both in financial and in brand-building terms, but we’ll win even bigger by multiplying the value that we both receive.” 

And when Wal-Mart talks of multiplication, it’s usually on a scale few retailers can match.  For example, the new Smart Network, which will be installed in 300 supercenters by the end of 2008, and more than 2,700 stores by early of 2010, will provide point-of-purchase brand exposure to most of the 140 million U.S. shoppers that visit Wal-Mart each week. 

No matter how you add it up, that’s a lot of eyeballs, and Wal-Mart knows it.  In fact, the company is so acutely aware of how much exposure-potential exists in its stores that it has made this fact the lynchpin to the entire Smart Network program.  

“With 140 million shoppers in our stores every week, we weren’t just creating a new medium, we were inventing a whole new national network—one that just happens to be inside of our store,” said Clint McClane, Senior Director of the Wal-Mart Smart Network.  “[It’s] a national network, that’s more relevant and timely than any other network, period.  A mass-reach network that engages [the shopper] when she’s in aisle ready to buy something.” 

It is this creation of a stand-alone media network that has led many to refer to the concept as “game-changing” and “revolutionary.”  But it’s not the concept, per se, that will change the game.  Rather it’s the role Wal-Mart sees for itself as a media broker that ultimately could turn CPG ad spending on its head.  Unlike previous iterations of the in-store media network, the new Smart Network has suppliers buying in-store media space from Wal-Mart in the same way they currently buy media space from, say, magazine publishers or television networks.  First Wal-Mart quantifies the reach, then it sets an ad rate based on exposure, and finally it reports the results as a means of helping advertisers quantify ROI. 

A glimpse of this process was spelled out in a document presented Wednesday during the launch of the network. Once the Smart Network reaches 2,500 supercenters by late 2009, the ad rate for a recurring 10-second vendor message in the grocery department (as part of a two-minute loop): $100,000 for a two-week schedule.  And for that, their message with intercept roughly 34,000 shoppers per store each week, and will reach roughly 21,300,000 projected viewers over the course of the campaign, the retailer says.

Through a thorough reporting process called The Campaign Scorecard (produced in conjunction with data-mining firm DS-IQ) Wal-Mart hopes and expects that vendors will view the new Network not only as an viable means of generating more sales, but also as a new channel for efficient, quantifiable ad spending.  And if ever there was a time when media planners are re-evaluating their traditional ad spend, especially print and television, it’s now. Ten years ago, the concept of an in-store ad spend may have seemed far-fetched and unrealistic.  But in the wake of a decade’s worth of online learnings, this new Wal-Mart network may just be as smart as it claims to be.  

“It’s pretty hard to ignore what’s been created here: the most integrated full-spectrum  partner-marketing solution in retail,” said Quinn, who added, “I don’t think I’m overstating things when I say that the way retailers communicate with shoppers is going to change more in the next 150 days than it has in the last 150 months.”

This article republished courtesy of Retailing Today

Login or Register to post a comment.