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No Promises Broken with P.R.I.S.M.

By Peter Breen

In September 2007, the Institute published an article entitled "P.R.I.S.M.'s Promise Approaching Reality," which examined the role that in-store audience measurement metrics would have on establishing the store as a vital marketing medium.

Now that Walmart has reverted back to its historic strategy of data isolation by dropping out of the P.R.I.S.M. project, and The Nielsen Company has shelved plans to launch a syndicated service "indefinitely," it would appear that the headline's optimism has been unfulfilled.

But whatever the future "reality" of a syndicated service delivering store traffic estimates and other data, P.R.I.S.M.'s "promise" has already been achieved. (Readers: Tell us what you think.)

I don't think there's any argument that the ongoing industry discussion generated by the P.R.I.S.M project has advanced the concept of the store as a marketing venue. It also can be argued that it has helped drive the broader, more game-changing emergence of "shopper marketing" as an essential go-to-market strategy.

P.R.I.S.M. "helped align the industry around the concept of the store as one of the most important elements of any consumer marketing initiative," says George Wishart, Nielsen In-Store's global managing director, who despite the recent suspension of activity is still bullish on the future of syndicated traffic and program compliance data. "It proved that the store has untapped potential" as a marketing vehicle, and that a common measurement model exists to help realize that potential, he says.

In an exclusive interview with the In-Store Marketing Institute, Wishart also posited that Nielsen In-Store's development of the syndicated system -- which includes a full year's worth of data from 2008 -- has been important simply by "proving that you could scale the opportunity" not only to measure store traffic at the category level, but also to ascertain the sales effectiveness of various marketing activity at retail.

The project has even led to a new metric for measurement that illustrates the store's unique ability to simultaneously build brand equity while generating sales: "lift per thousand impressions."

The data already collected concludes that "audience is the No. 1 causal reason" for producing sales lift, Wishart says. Depending on the product, category, or store environment in question, the effectiveness of specific locations, marketing materials and messages varies significantly. But, as Wishart puts it, shoppers ultimately "will never be able to pick up the product if they don't see the display." That fact underscores the need for understanding traffic patterns within the store.

Among other "gets" from the data:

  • The audience delivered by an endcap -- generally considered to be the "prime time" slot in a store's marketing inventory -- can vary by as much as 700% depending on the specific location. While the right-most front endcap (the one closest to the primary entrance) is often the most effective, a store's design has a huge impact: a narrow upfront area can immediately drive arriving shoppers to the back perimeter, making the endcaps there more prominent.
  • Traffic levels can fluctuate significantly -- but predictably -- during the month at various stores. So a manufacturer in a particular category would be "spending more wisely" if it focused most of its attention on specific periods, Wishart notes.
  • Traffic levels don't always correlate directly with transaction levels. While the relationship is nearly one-to-one in the early morning and late evening, there are dayparts in which there are significantly more shoppers per transaction.

Collectively, these points show that P.R.I.S.M. data would let the industry measure marketing effectiveness at unprecedented levels of detail. However, public discussion surrounding Nielsen's announcement has, at times, viewed that fact as a negative, with some people suggesting that such detail is unwanted or unneeded by many companies at this point in time.

There may be some truth to that theory. Companies that, until now, have never even tracked compliance levels for their in-store programs may not be ready to ante up for a service telling them exactly what form those programs should take, or where they should be positioned. Data is only beneficial if it can be acted upon, and the potential costs of activating the insights available through P.R.I.S.M. -- in addition to the costs of purchasing the data -- would require careful consideration even in the most ideal economic times.

As it turned out, the economic times into which Nielsen's service prepared to launch were as far from ideal as could be imagined. In the current recession, when many companies are desperately looking for ways to reduce expenses, asking them to allocate money for a new initiative was a tough sell. "There is an immediate need to preserve cash, so an investment that lets you refine a program six months from now wasn't a priority," Wishart says.

Wishart doesn't think Walmart's decision to back away from participation in the service had a major impact on the industry's ultimate assessment. "As companies examined the opportunity, they took a critical look at the costs. I think [Walmart's departure] gave them pause, but I don't think it was a driving force."

While he suggests that media discussions about subscription costs (which put the price tag as high as seven figures for large companies) were "exaggerated," Wishart believes that "what most folks missed were the cost savings" that would result from an in-depth analysis of in-store marketing practices, as well as the ultimate return on investment from more effective programming. "You could ultimately implement more of what works and less of what doesn't," he says.

Wishart concedes that a less-ambitious business plan, in which P.R.I.S.M.'s multiple deliverables were rolled out in stages rather than as a whole, may have made initial costs more palatable to the marketplace. And that's an option Nielsen will consider for any future rollout, he says.

"We're being very careful to preserve all of the components, so that we can move quickly and easily when the industry is ready," he says. "But I suspect it will be some time before it is."

The Next Reality
In a presentation from early 2008, Procter & Gamble ceo A.G. Lafley asserted that P.R.I.S.M data not only would "transform how we think about in-store communication and behavior" but "also allow us to improve returns on total marketing spending, because we can compare returns from in-store programs with returns from out-of-store consumer marketing."

Procter & Gamble doesn't exactly have a reputation for public hyperbole. Neither does Walmart, whose marketing chief, Stephen Quinn, said in late 2006 (soon after P.R.I.S.M.'s first phase) that the data would let the chain "consider new store layouts and product adjacencies to create an in-store experience that is more relevant and, thus, even more satisfying."

If P.R.I.S.M.'s early findings were strong enough to inspire such bold predictions from leading industry players, it's unimaginable that this potential will remain untapped for long. Nielsen's plans for syndication were suspended, but the P.R.I.S.M. project didn't fail. The "reality" will take a little longer to get here, but I'm pretty sure that it's still coming.

When it does arrive, it probably won't be called P.R.I.S.M. It may not even be delivered by Nielsen. (Walmart may be working on a proprietary alternative already.) RFID technology may end up playing a significant role, as could virtual store simulations.

But whatever the form or delivery vehicle turns out to be, it will be driven by the industry's understanding of the tremendous marketing opportunities that exist within the store.

And in helping to cultivate that understanding, P.R.I.S.M. has fulfilled its "promise" quite nicely.

Peter Breen
Managing Director, Content
In-Store Marketing Institute

Published: February 2009

Source: In-Store Marketing Institute

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