Shopping for customers: Packaged goods makers using new ad stream to reach target audience

08/01/2005

FAIRFIELD, Conn., August 1, 2005 - John Stevenson is making a point. "If all roads lead to Rome and you own Rome, you don't care what road they took."

He's not talking about ancient history. Consider it an allegorical hypothetical. Rome represents supermarkets, the roads represent the media and "they" are the shoppers.

The media is fragmented and no matter where a person obtains their news or entertainment, they all end up in a supermarket to buy goods, he says.

In a channel-surfing, multitasking world where according to one survey 59 percent of TV viewers are "regularly or occasionally" online at the same time they have their televisions on during prime time, reaching a mass audience is no easy task.

The advertising stream is split among print, radio, Internet and TV, with TV further subdivided into network, syndicated, spot, satellite and cable. Factor in digital video recorders, which can wipe out all commercials, and the ad medium is a difficult buy.

That's where Stevenson steps in as senior vice president of sales and business development for SignStorey, a Fairfield-based firm that's looking to make companies and ad agencies rethink their marketing approach.

SignStorey provides electronic retail displays in the form of 42-inch plasma flat-panel screens that are made up of four "tiles" –– the retailer's logo in the upper right section, a retailer info loop just below it reserved for store specials, meal ideas, an ad/content loop that makes up the largest section at 19 by 29 inches and could show commercials normally seen on network TV and a news/sports/weather ticker that crawls along the bottom.

Information is fed from SignStorey's operation center in Marblehead, Mass., to a Hughes Network systems satellite where it bounces the signal to satellite dishes on top of the grocery stores.

SignStorey has a presence in 34 of the 48 contiguous states, said Todd Becker, senior vice president of technology services. The 3-year-old firm's star is rising along with its plasma TVs. They have contracts with Boise, Idaho-based Albertsons supermarkets, which includes Shaw's and Jewel-Osco; Carteret, N.J.-based Pathmark and Price Chopper, based in Schenectady, N.Y.

By the end of the year, SignStorey hopes to have 2,600 screens in 2,000 stores.

"We are the only sight, sound and motion medium that has a growing audience," Stevenson said. "We provide the screen, the content and manage the content."

The cost to the stores is nothing. Rather, the stores share revenue based on ad sales.

SignStorey began in January 2001 as a partnership between Gerber Scientific Inc. of South Windsor and Next Generation Ventures L.L.C. NextGen is a venture capital fund that provides financing for companies locating in Connecticut. It is a joint venture between Phoenix Home Life Mutual Insurance Co. of Hartford and Connecticut Innovations of Rocky Hill.

Initially, the first screens were placed in liquor stores. When Virginia Cargill came on board in 2002 as president and chief executive officer, she decided that the concept should be moved to grocery stores. More investors joined, including New York Angels, and private equity firms Golden Gate Capital and CIC Partners.

Billing itself as "the real-time media network," SignStorey generally places two sets per store; one in the deli-bakery section and the other in the produce-floral section. Nearly all shoppers - 98 percent - spend eight-plus minutes in these two sections, according to data compiled by Safeway stores. The message loop on the TV screens matches the time period with ads and corporate-sponsored content. Its programming sources include Taunton Press of Newtown, which provides information from its Fine Cooking, Inspired House magazines; Conde Nast publications Bon Appetit and Gourmet; as well as Cooking.com and Epicurious.com.

"We try to provide programming relevant to consumers in the here and now," Stevenson said.

"We put the creative in the buy environment. I can reach your audience with a bigger impact and at a lower cost than any other medium."

Stevenson said a 30-second spot on the hot ABC-TV show "Desperate Housewives" is equivalent to the cost of four weeks in the stores.

"The model is in the right place at the right time," said Doug Bivona, chief financial officer of SignStorey.

About 25,000 new products enter the market each year, Cargill said. "And a product has to have visibility," Stevenson said. "Our goal is to place the screens in high-time and high-traffic areas," Cargill said.

The screens are attractive to retailers because it's a turnkey system and it allows them to communicate with their customers, Bivona said.

Participants include Procter and Gamble, Frito-Lay, Snapple, General Mills, Johnson & Johnson, Kraft, ConAgra, Campbell Soup, Pepperidge Farm, Pepsi and Tropicana.

An attractive aspect for packaged goods manufacturers, Stevenson said, is that each ad spot is category exclusive. "If Wheaties is advertising in one of our four-week cycles, then we will not take advertising from Kellogg's Corn Flakes in the same cycle."

Rates are determined on the length of the spot and the total audience delivered by the network during any particular four-week cycle. Thus, at a $2.00 CPM (cost per thousand), a 15-second ad in Cycle 10 (September), which will deliver 81,600,000 total impressions across 1,200 stores, will cost $163,000 for four weeks, Stevenson said.

Competition, with one large exception, is regional in nature. SignStorey has four competitors:

+ Premier Retail Network (PRN). Founded in 1992, San Francisco-based PRN bills itself as the creator of the world's largest in-store media network. Unlike SignStorey, its 5,000 clients include supermarkets as well as other retailers. They include Wal-Mart, which launched its network in 1998, Best Buy, Costco, Sears, Sam's Club, Circuit City, Ralphs, ShopRite, Pathmark, Shaw's, Star Market, Jewel-Osco and Albertsons.

PRN and SignStorey are noneconomic partners in Albertsons and Pathmark stores. PRN provides the stores with eye-level screens in the checkout lanes, while SignStorey places the two large plasma screens on the perimeter.

+ LimeLight Media Group. The Tennessee-based digital-sign operator provides Shop N' Save Warehouse Foods with a digital content-management system for 35 grocery stores in the St. Louis area.

+ Interactive Graphic Solutions. The Missouri-based advertising and marketing services firm has screens in 21 Dierbergs supermarkets in St. Louis.

+ Captive Audience L.L.C. The Vernon, N.J.-based digital media provider for retailers and banks. It does have screens behind the deli counters in ShopRite supermarkets in the Northeast.

Cargill notes that six members of the management team all worked at ActMedia, which developed placing ads on shopping cart placards and the innovative Instant Coupon Machine that can be found along supermarket aisles nationwide.

At their Sherman Street office, Stevenson is still hammering home the message he takes to packaged goods manufacturers and ad agencies: "Supermarkets are the broadest common denominator. Everyone shops. We're focused on supermarkets; others (media) are redundant to the market we're already delivering."

All roads lead to supermarkets.