PRN's Wal-Mart network retooling and expanding

October 18, 2006 by Dave Haynes

MediaWeek is reporting that Wal-Mart has OK’d a complete overhaul of Premier Retail Network‘s massive, and long-running, in-store media network.
The key elements:

• target content by aisles, and right down to the end-caps
• go IPTV instead of multi-cast satellite
• dump the TV monitors and go flat screen, down at eye-level instead of way high

“The store is our number one media channel,” Wal-Mart CMO John Fleming told the assembled group (at a Bentonville marketing summitt. “The network of the future will allow us to take full advantage of it.”

The rollout will be phased in over 2007 and completed by early 2008.

The decision to proceed with the revamp followed a 20-store test this summer (dubbed Project Mustang) where 10 stores used the new targeted IPTV ads to promote certain products and 10 stores used the existing network. Product sales in the IPTV-equipped stores were at least 10 percent higher, said Michael Quinn, svp, marketing and research at PRN.

For Pfizer, which tested a new pre-brush oral rinse, the sales results using the new ad model were close to double the 10-store control group, said Kaki Hinton, vp, advertising, Pfizer Consumer Health Care. “The fact that your executions will air only in the aisle where your product is sold makes all the sense in the world,” she said. “It’s relevant, targeted and eliminates waste.”

Wal-Mart also disclosed several other changes to the more than 400 marketers and media buyers gathered to hear the company discuss its upcoming in-store promotion initiatives. In-store monitors are being replaced with flat-screen panels, which will be at eye level in aisles and other key locations, instead of hanging several feet overhead. Testing shows that awareness levels for ads are “significantly higher” when screens are at eye level, said Mike Hiatt, director of internal media networks at Wal-Mart.

I’ve walked around a Wal-Mart with a PRN exec and know they have been angling towards this for quite some time. It makes a world of sense, as they have been using a network and technology that really wasn’t taking much advantage of what’s now possible.

To bankroll what will be a rather big capital budget, CPM rates will go up and more ads will be squeezed into the rotation. Media Week says ad sales revenues for PRN/Wal-Mart are estimated at $100 million annually.