The World’s Biggest Marketer Legitimizes In-Store Advertising as Part of Media Spend

September 17th, 2007 Nurlan Urazbaev

P&G has restated 11 years of ad spending data in its annual report filed August 28, Advertisng Age wrote earlier this month. Procter and Gamble’s ad spending will now include expenditures such as in-store advertisements but will omit the salaries of ad execs.

The adjustment changed the ad-to-sales ratio for the past decade, which, P&G says, shows where the ad money went more accurately, and also makes the numbers look better to investors. However, the most significant part for me is that in-store media, including Wal-Mart TV, got a legitimate ‘place alongside other media spending in the nearly $8 billion budget of the world’s biggest advertiser.’

In its press release on the subject, P&G acknowledged diverting ad budgets from network TV towards consumer-centric media: “Over the past few years we’ve been looking at ways of improving the effectiveness of our marketing spending,” a P&G spokeswoman said. “As a result, we’ve been shifting more of our dollars away from traditional TV and toward other media, including in-store. … So we thought it was important to include in-store in our disclosed advertising spending.”

Procter and Gamble’s move comes as retail media (and it’s modern wing – digital signage) is being increasingly adopted by retailers, major advertisers and even TV networks themselves. According to Financial Times, the acquisition of SignStorey digital signage network by CBS ‘is evidence of the burgeoning popularity of in-store advertising, which allows companies to target shoppers just as they are about to make purchases.’

‘The category remains small’, says FT, ‘compared with the estimated $75bn spent on television advertising each year. Yet it appears to be gaining acceptance among advertisers at a time when television audiences are fragmenting amid competition from the internet and cable, and technology is allowing viewers to skip past commercials.

Wal-Mart was one of the first retailers to establish an in-store television network. The retailer has more than 125,000 screens in more than 3,000 stores, featuring programming from companies such as Toyota and Bank of America.

Meanwhile, Target, Best Buy, Circuit City and other US retailers have launched in-store television.

CBS is not the only television network to move into the in-store market. In July, NBC Universal deepened a partnership with Premier Retail Networks, a Thomson-owned company that operates one of the largest in-store television networks. As part of the deal, NBC agreed to supply short-form video content to PRN,’ writes Financial Times.

Entry Filed under: Digital Signage Evolution, The Big Picture, Uncategorized