In-store billboards maximize marketing impact

By Katherine Field

(October 1, 2008) A new medium for in-store advertising is spelling success in the drug store category, but other chains are jumping on board as well.

CVS/pharmacy and Duane Reade have rolled out an indoor billboard concept called StoreBoards, as have Longs and Jewel-Osco. Designed to transform entrance security panels into highly visible ad space, the ad panels were created by New York City-based StoreBoard Media.

Billboard Bonus

Besides generating ad-space revenue for retailers, in-store billboards also have the potential of providing product and category lift for those advertised products that are on retailers’ shelves. Match-panel tests conducted by Massi International compared sales between stores with in-store billboards and those without, focusing on four different advertising programs for products available on the drug store shelves. The following sales/category lifts were recorded:

Oral Care (three products)+6.5% (toothpaste)
+6.9% (rinse)
+8.7% (toothbrush)
Cough & Cold9.0%

“We use StoreBoard’s pedestal advertising in our stores to help bring attention to some of the products we sell,” said Mike DeAngelis, director of public relations for Woonsocket, R.I. -based CVS/pharmacy. CVS recently debuted a Nexxus indoor billboard campaign in 800 stores nationwide.

StoreBoards presently has the exclusive rights to place their indoor billboards on the security pedestals that are at the entrance to more than 10,000 chain drug stores nationwide.

“We chose the drug channel as our initial point of entry because drug stores have become the convenience store for America,” said Doug Leeds, CEO of StoreBoard Media. “The other channels that we are now looking at are the DIY retailers, office supply, entertainment and electronics, and, ultimately, supermarkets and mass merchandisers.”

article-imgA Nexxus indoor billboard campaign recently launched in 800 CVS/pharmacy stores nationwide.
According to Leeds, the company is preparing to launch an expansion initiative into shopping malls, department stores and the aforementioned specific retail categories.

Contrary to the traditional school of in-store thought, the retailers that roll out the billboards don’t pay for the placement—in fact, they get paid for providing the space.

“StoreBoards are located within the four walls of a store, real estate that is owned by the retailer, ” explained Leeds. “This has nothing to do with in-store dollars and promotional dollars. ” The retailer and StoreBoard Media partner in the proceeds generated by the billboard ad sales: a 50/50 split after costs.

For example, when Nexxus shampoo is advertised on the indoor billboard at the entrance to a CVS/pharmacy, Nexxus pays StoreBoards for the ad space, and after StoreBoard Media has paid for costs such as installation, shipping and cost of sales, the remaining monies are split evenly with CVS.

The benefits transcend revenue-sharing. The panels create a graphically interesting entrance out of a typically unattractive security device. “It’s a great way to cover up dated, scratched security pedestals, ” said Leeds.

The average CVS store has three security pedestals measuring about 5 ft. tall by 3 ft. wide. The two-sided billboards offer a combined total of 90 sq. ft. for advertising messages at the entrance.

CVS limits the advertisers to those that sell products that CVS stocks. But that isn’t always a requirement. “Duane Reade permits advertisers to promote products that have nothing to do with Duane Reade stores,” said Leeds. “Interestingly, because Duane Reade is such an iconic New York City brand, about a third of its ads are for Broadway plays. They look at it as being a good citizen in New York.”

In addition to determining what products are advertised for sale, the retailer has complete control over the graphics that adorn the panels. Approvals are generated corporately, not at store level, and all ads must be geared toward a general audience.

“Every person who enters, and then exits, the store will pass by the billboards,” said Leeds, “so it is imperative that the ads be appropriate for every customer.”

Panels are changed out every four weeks, and cost to the advertiser is based on a CPM (cost per thousand) of about $2.00.