The powerful impact of point-of-sale advertising

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Point-of-sale advertising may not be as ‘sexy’ for the larger creative agencies but it’s a medium which influences consumer buying decisions (photo credit: MagiqADs Sdn Bhd).Point-of-sale advertising may not be as ‘sexy’ for the larger creative agencies but it’s a medium which influences consumer buying decisions (photo credit: MagiqADs Sdn Bhd).Point-of-sale advertising may not be as ‘sexy’ for the larger creative agencies but it’s a medium which influences consumer buying decisions (photo credit: MagiqADs Sdn Bhd).

By Zhen M

Some 51% of shoppers move through all the aisles while grocery shopping, more than a third of shoppers say they are influenced by in-store ads, 44% notice in-store ads, and 75% of those who notice in-store ads are likely to purchase the brand advertised – these are the findings of a Sensor Study quoted in the promotional booklet of retail media firm, MagiqADs Sdn Bhd.

Point of Purchase Advertising International (POPAI) states that only 20% of shoppers go into the store with a list, and these shopping lists rarely specify specific brands. As shoppers browse through aisles, they are highly susceptible to messages about quality and price, and are open to being persuaded to switch or try new brands.

According to data, information and measurement firm Nielsen Malaysia, 80% of Malaysians (Peninsular Malaysians above 15-years-old) walk into stores with point-of-sale (POS) and retail media. Shoppers to these stores include 57% of professionals, managers, executives and businessmen (PMEBs) and 56% of white-collar workers.

This is certainly sizable versus the reach of some other better-known mass media platforms; for example, it far exceeds the nation’s top English daily and comparable to some sizable TV stations.

Yet, POS advertising expenditure (adex) in Malaysia was only RM145mil last year, out of a total national adex of RM13.56bil. The media’s share of the adex pie has yet to reach 2% in any year.

Given the media’s potential, it is arguably underutilised; and the industry currently has only two main players, MagiqAds and POS Ad, competing neck-to-neck.

Consumers tend to make decisions before entering stores

Advertisers tend to believe that most decisions, especially for consumer durables, are made before entering the store, based on his/her own research and the effects of other media pre-store visit, says Andreas Vogiatzakis, managing director of Omnicom Media Group Malaysia. “In such cases, POS is best used as a form of reminder advertising, for impulse purchases or swaying the undecided at the last minute, rather than creating and generating awareness and longer-term desire. Advertisers tend to look at POS as a promotional tool rather than a marketing tool, and, as such, the budget it receives is smaller.”

MagiqADs CEO Sailendra Kanagasundram reckons that retail media is probably underutilised due to the traditional media buying habits and the lack of ‘ease of purchase’.

“In addition, one could say that the current formats might not be as ‘sexy’ for the larger creative agencies. We are certainly competing for a share of their attention, many who would naturally focus their consideration to the sex appeal of TV and radio. I believe that much can be done to increasing the libido of retail media.”

He shares that MagiqADs, through its subsidiary Floorstoppers, has recently invented and introduced 3D animated floor advertising, which incorporates audio clips with 3D animation, at the aisles. Dutch Lady was the first to take this on, its campaign currently being projected in 26 top Tesco outlets. “This invention has been patented in the UK, Australia, Singapore and China markets and is awaiting similar approvals in a number of other markets,” says Sailendra.

Notwithstanding the small adex share, retail media has certainly grown through the years with more brands and categories adopting this platform. Even non-FMCG (fast-moving consumer goods) brands, including banks, developers, petroleum companies and even ministries are initiating campaigns at hypermarket malls due to the sheer volume and reach of shoppers, notes Sailendra.

In this region, POS adspend is tracked only in Hong Kong, Japan, Malaysia and Thailand and in each country, POS adex is small – 4% of total spend in Japan and less than 2% in the rest, says Vogiatzakis, who views Malaysia’s POS market as mature and the players’ capability and output of work commendable. He lauds MagiqADs for constantly being in the forefront of innovation, creativity and research, such as the release of its 3D animated floor ads, a novel way of engaging shoppers and consumers.

Sailendra sees Malaysia’s POS market as fairly developed compared with many markets globally, but does not regard it as mature. He notes that the sensorial approach to advertising, for example, is more advanced in Thailand and the Philippines. “A fair number of their shelf campaigns has sound, lights, movements, smell and even touch… I believe that this is the way forward.’

Sailendra believes the trend it moving towards “big and bold”, experiential advertising that can be multi-sensorial in nature. “Imagine a coffee ad with the smell of freshly brewed coffee to appeal to our emotional subjective side; an auto advertisement with the smell of new leather… We would like to challenge our clients, the agencies that we work with and certainly ourselves towards implementing more of these campaigns to be even more persuasive.”

He also notes the big push towards digital opportunities, with more LED displays and interactive campaigns. As the cost of LED displays reduces, he believes we will see more digital screens at the stores in various formats. “However, I strongly feel that the implementation of these have to be carefully executed to ensure that the intended impact and effect is not diluted.”

“Creativity and innovation can truly work to the benefit of the brand and the advertiser. If used properly, POS marketing can become a strong brand building tool, as it reaches the consumer at the right place and in the right mindset,” opines Vogiatzakis.

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