• by Larry Dobrow , February 5, 2004

Shopping centers may conjure images of meandering geriatrics and mall brats, but a Colorado-based upstart hopes a new electronic media network will infuse mall advertising with the kind of energy necessary to compete with more established media. The company, InterMall Media, plans to roll out a plasma screen-based ad model into shopping centers across the United States.

What distinguishes the InterMall model from other mall-advertising efforts is its ubiquity. The system, first installed at the upscale FlatIron Crossing in Broomfield, Colo. last year, features 20 widescreen plasma monitors at high-traffic locations throughout the mall. Retailers, whether nationwide chains or walkway kiosks, can buy 10-, 15-, or 30-second spots that are aired every five to 12 minutes. The ads, as well as limited news and weather bits, are delivered via Wi-Fi technology; the monitors are synchronized mall-wide, but each has its own media player and can be operated independently if desired.

"We planned the network architecturally to cover every entryway, walkway, and food court," says InterMall President Bill Everett. "[The screens] can be on poles or they can hang from the ceiling. They're not quite eye level, but they're close to it. No matter where you are, there's a screen in front of you."

When asked whether advertising-addled consumers might respond negatively to the omnipresent screens, he responds, "We don't blare the audio, and it's not like there isn't advertising in the malls to begin with. In every storefront, there are huge, colorful signs. We're just replicating what's already there, but at different points in the mall."

Besides, Everett argues, the InterMall ads are considerably less invasive than those seen on television and elsewhere. "[Consumers] hate what they see on TV because they're not in a buying mood," he notes. "The mall is the antithesis of the house. People have their pocketbooks and wallets, and are ready to buy. We tell them what's going on right at that moment, whether it's a sale or an event or something else."

While there's clearly no shortage of advertising at the 46,000-plus shopping centers in the United States, little of it seems to resonate with consumers. Sure, they might notice an ad for the local haberdasher on the side of a food-court trash bin, but it's doubtful that this ad registers for much more than the tenth of a second it takes to slide the remnants of a Philly Cheese Steak into the can. The dollars and eyeballs are there for the company that figures out how to take mall advertising to the next level: according to the International Council of Shopping Centers, shopping centers registered over $1.23 trillion dollars in sales in 2002. Additionally, more than 200 million adults visit malls every month.

InterMall's financial model is relatively simple. Becker Capital Management (the company's chief financial backer) pays for the entire system installation, which runs upwards of $500,000. The mall also receives a cut of the ad revenue. Although Everett jokes that he "doesn't want to publish [his] rate card," space on each mall network can be had for the relative pittance of between $650 and $1,300 per month. InterMall plans to cap each network at 30 advertisers.

That low sum and relative exclusivity might be what convinces mall merchants big and small to take a chance on the program--facts clearly not lost on Everett: "For a media buyer or a store to give us a try for $1,000 is nothing, really." That said, selling retailers on the system hasn't been especially easy. "Malls aren't interested in becoming a programming or sales entity, so we need to educate them," he says. "At first, we got a lot of 'we saw the screens--what do they do?' The concept is very different from what they're used to." Although local sales will be the primary driver of the company's business, InterMall plans to add regional and national sales teams as it grows. "Retailers don't want 600 different people approaching them from all sides," he notes.

The FlatIron trial run has exceeded Everett's expectations, with 13 of the 15 initial advertisers re-upping for 2004. Although Everett declines to reveal names, one of the mall's anchor tenants reported double-digit traffic growth in the fourth quarter after supplementing its TV and radio buys with the InterMall system. By comparison, overall mall traffic was flat during the same period.

Of course, it remains to be seen how InterMall will handle the inevitable growing pains as it attempts to infiltrate shopping centers across the country. A deal is in place to bring the plasma screens to a cluster of Denver-area malls, and Everett envisions the company blanketing indoor and outdoor malls coast to coast. He seems to have thought through many of the potential pitfalls, emphasizing the importance of a strong operational infrastructure. "There has to be 24/7 customer service and constant status monitoring of the screens. That's an absolute must."

While conceding that his company is "still very much in the early-adopter stage," Everett also hopes to move into individual stores before too long. "Once the infrastructure is in place, it's just a matter of adding more wireless access points," he says.