Marketers Turn Vacant Storefronts In Mall Into Ad Venues

by , Apr 29, 2008, 5:00 AM
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Store front digital AdDon't look now, but high vacancy rates are forcing the local mall to turn lemons into lemonade. Property managers are converting vacant store windows into high-tech digital ad displays, creating a new ad medium that's considerably less depressing than soap-covered windows or "This space could be yours!" banners.

The economy has been especially punishing for retailers, with such chains as The Sharper Image and Levitz filing for bankruptcy, others like Linens 'n' Things teetering on the edge, and dozens more -- including Zales, Ann Taylor, and Talbots -- shuttering underperforming units. In the first quarter of this year, the International Council of Shopping Centers says that of the 28 retail chains it tracks, there have been 2,122 store closings, with 38% in apparel, followed by 30% in home entertainment.

So WindowGain, a start-up based in Newton, Mass., has pounced on store vacancies as a new ad medium, with five displays currently running in Boston and eight in the UK. "We have our in-house staff securing high-traffic and high-demographic locations," says COO Prem Hira and then selling the ads to marketers, typically in four-week flights. But given the softness in retailing, "we also offer incentives for longer-term contracts. To date, our longest campaign is 16 months."

The business model is like any other out-of-home advertising company, he says. "We sell advertising time on our digital displays, and we compensate the real estate owners with a fixed monthly fee or a revenue share."

"We all know that traditional advertising is shrinking, and that alternative - including digital and out-of-home-advertising is growing," says Marc Feldman, VP/new business development at Developers Diversified Realty (DDR), a Beachwood, Ohio-based commercial real-estate company that has just entered an agreement to bring window displays to about 75 properties in the next 15 months. "Companies need to reach people where they are. People are spending more and more time at the mall, and our traffic numbers show that," he says. "So this is an innovative way to reach them. When people look in windows, they expect to see things."

Feldman says the technology is especially appealing for marketers with creative that has plenty of movement. "It looks really great when you see fish swimming or balls bouncing," he says. Boston sites have featured sea monsters (from the New England Aquarium), twirling cell phones (Verizon) and even windows (the Museum of Fine Arts Boston recently had an Edward Hopper exhibit, and its display used a moving version of what may be the most famous storefront art ever-the artist's 1942 "Nighthawks.") Right now, DDR, with about 740 properties throughout the U.S. and internationally, is rolling new ads out in its Atlanta properties.

"Ground-floor digital displays are ideal for just about any brand that wants to reach people on the go," adds Hira. Benefits specific to digital displays include real-time information. For example, the Boston.com spots actually pull news, weather, etc. from the boston.com web site.

The economy's loss may well be a boon for companies like WindowGain. The International Council of Shopping Centers predicts that store closings may total 6,500 for 2008, or about 1% of existing stores, which would be the highest since 2001.

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