First came print, then radio, then TV, then the Internet, each medium promising sales lift if brands and retailers advertised there.

Thomas Opdycke, DS-IQ.

Now another advertising medium is promising even more impact and marketing precision. In-store digital media networks, when backed by a new generation of measurement technologies, can deliver targeting and accountability for marketing promotions. Companies can now test and optimize campaigns right where their products are sold, on a large scale, and with granularity and accuracy they’ve only dreamed of.

These new tools, which reveal exactly how consumers respond to individual campaigns, will undoubtedly accelerate the rate of brand marketers’ in-store digital media ad spend.

The development of advertising on the Internet can be used as a roadmap. In the beginning, it was the Wild West. No one knew what worked. There was one-size-fits-all pricing with long-term campaign commitments. “Click-through” metrics didn’t map to product sold. Advertisers couldn’t figure out the value of an ad buy.

But it exploded once relevant metrics were introduced to help marketers understand the effectiveness of their online campaigns. (According to a report in Advertising Age, if current trends continue, online ad spending will grow from $6 billion in 2002 to $35 billion in 2007.) Key to this explosion was the feedback loop that exists between what consumers see online and what they then proceed to do at that particular marketer’s web site. Advertisers and their agencies use this closed loop to systematically test different messages, offers and placements, and then select the best combinations based on marketing goals. The feedback loop lets them refine the strategy until they make it work. Success justifies greater spending, and so it grows.

A turning point came when companies like Amazon pioneered technologies to analyze the huge amount of data generated by millions of site visits. These “test” systems could automatically isolate the effects of ad variables, such as design, offer and placement, so that advertisers could identify and micro-target their most valuable customers.

Transformation at Retail

This same transformation is starting to happen with in-store digital networks. Like the Internet, retail networks generate a detailed record of ad play. And, through point-of-sale technology, retailers can identify products purchased by place and time that can be used to establish a test-measure-learn feedback loop.

With these metrics, retailers can begin answering such questions as: Is it better to add screens to my network or move the screens I have now? What is the right mix of ad content and informational content? Which vendor’s content has the largest impact on my customers?

Brand managers can better determine: What produces more sales – four 15-second spots or one 60-second spot? What is the sales impact across my brand? How can I leverage in-store campaigns to boost a new product launch?

And content designers can determine: Do I get a better result if I change the visual? Change the branding elements? The offer? The run length?

Harnessing the Power of Data

But it still isn’t always a straight line. Winners in this new medium will be those who harness the power of data-driven insight and optimization. Retailers and brand managers will need to look for digital network partners and service providers that can help them address the following five critical measurement and accountability tips:

1. Understand the relationship between ad content and product movement and how it changes over time. With in-store media, both branding and promotional spots prompt action and move product. An ad promoting one product may move other brand products even more than the targeted one. To understand true ad value, you need to measure sales uplift across all brand products individually.

2. Understand the impact of scheduling and placement variables. The right combination of timing and placement will vary based on the store, the product, the region, competitor promotions, seasonality and other factors. Ongoing measurement and optimization – like the Internet – can adjust for the best combination to maximize sales over time.

3. Conduct structured experiments. Move from “gut” to data-driven content selection. In-store media networks make it easy to test multiple creatives and let shopper response dictate the winners. Ads that move the most product with the least amount of run time are most cost-effective.

4. Use the right metric for your business, whether sales uplift, sales velocity, targeted impressions or something else. The metric used should reflect marketing goals. And an automated measurement system should incorporate multiple metrics that reveal different aspects of campaign performance.

5. Understand how to plan in-store media strategy to achieve the best overall result. A retail media network involves thousands of products and millions of transactions. Tracking and leveraging can’t be handled manually, but automation can both speed time to insight and implement smart changes. Making positive changes while a campaign is still running insures the highest possible return on ad buys.

A growing number of in-store media networks are using sophisticated analytics on these data streams to quickly reveal the consumer buy-response and then make campaign changes based on what was learned. By using a consistent campaign testing framework and relevant metrics – developed exclusively for this in-store medium – brand marketers are unlocking the value of their ad spend and generating a deeper level of consumer insight on a huge scale.

Different network stakeholders have different questions they need answered. But everyone benefits from making data-driven decisions to achieve sales and marketing goals. And the end result can be a robust in-store marketing program that knows what it wants and achieves what it wants. ∫

Thomas Opdycke is president and ceo of DS-IQ (Bellevue, Wash.), provider of the first web-based service that automatically measures and analyzes in-store media ad campaigns for leading retailers and brand marketers. Prior to founding DS-IQ, he was director of marketing for Microsoft’s Windows division and played a key role in the Windows XP launch.