Recent tests on the effectiveness of digital mall advertising signage provide a strong indication that shoppers not only notice the ads but also buy the advertised merchandise. Moreover, given the impact of fuel prices and the economy on mall traffic, in-mall advertising may influence shoppers enough to affect the sales of one store compared to another.

Those are some of the conclusions recently reached in research conducted on behalf of Adspace Networks, the New York-based owner and operator of the Adspace Digital Mall Network, a network of 1,400 Smart Screens in 105 upscale shopping centers that reaches 100 million people per month,

Advertising Test Cases
According to Adspace, three promotional tests it commissioned in conjunction with its marketing partners proved the efficacy of the ads in pumping up sales and driving store traffic. The findings add teeth to a Nielsen Media Research report showing that 47 percent of mall traffic watches the Adspace Mall Network Smart Screens each visit. Smart Screens are 8-foot-tall floor-mounted enclosures with 65-inch digital plasma screens.

1. A recent test in 12 shopping centers with the Adspace Digital Mall Network showed that when a major anchor department store discounted $145 Cole Haan men's loafers to $99, Adspace contributed to a total 38 percent promotional lift across all 12 stores. In stores that did not promote the sale on the Smart Screens, the Cole Haan men's loafers sale trended 15.1 percent above average, but in stores where the sale was advertised on the Smart Screens, sales jumped to 20.8 percent above average.

2. Build-A-Bear Workshop also tested a promotional program on the Smart Screens in June, with similar results. "Over the summer, Build-A-Bear Workshop successfully tested an in-mall program with Adspace that engaged guests with exclusive offers and drove incremental traffic to our stores," says Teresa Kroll, chief marketing officer for St. Louis-based Build-A-Bear.

3. Additionally, a major plus-size women's clothing retailer engaged in another test on the network during a new product launch for its new jeans. Eighteen percent of women who purchase plus-size clothes, who were in the mall during the promotional period, visited the store as a result of the campaign on the Smart Screens. Importantly, 71 percent of those visitors made a purchase as a result of seeing the ad, according to Adspace.

"Marketers traditionally rely on promotional budgets to generate immediate sales lift, using vehicles such as free standing inserts," says Dominick Porco, Adspace chairman and CEO, and former president of News America Marketing, the largest supplier of free standing inserts. "Our mall-based clients that have used price-point promotions on our Smart Screens have seen immediate sales lift. They are also finding that, compared to other forms of promotional vehicles, which can take weeks or months to produce, Adspace can create and have an ad playing on the network within a day or two."

"Mall shoppers expect to see sale information on the Adspace Smart Screens because the network's editorial content is designed to showcase some of the best deals in the mall each week," adds Warren Christopher, Adspace editorial director. "Mall retailers can take advantage of this promotional medium by advertising their best sale items, right at the point of purchase, in a way that is consistent with their branding message."

Mall Traffic Insights
Mall traffic and consumer shopping patterns are subject to a number of variables, which is why stores advertising on digital signage may fare better than those that don't.

"Our research shows that consumers are in the mall for about 77 minutes, yet they only visit an average of less than three stores," says Porco. "Our network offers retailers the ability to essentially extend their store fronts and promote sales in different parts of the mall. This alerts shoppers to sales and promotions in different sections of the mall that may be off their initial path when they came to the mall that day."

Indeed, when the price of oil rises, consumers feel it at the pump and tend to do less driving, including visiting the mall. With a smaller pool of shoppers to draw from, stores that employ in-mall advertising as part of their marketing plan may attract more traffic than those that don't.

In July, with the price of oil accelerating to an all-time high, enclosed mall traffic declined 3.4 percent vs. the prior year period, according to Adspace. During the month of October, shopper traffic in the common areas of enclosed malls actually increased vs. October 2007 (See chart "Enclosed Mall Traffic and Department Store Traffic Relative to the Price of Oil").

"It is particularly encouraging that the average price of oil continues to drop, suggesting that common-area mall traffic will be comparable to last year in the fourth quarter," says Porco.

Department store traffic, on the other hand, has been less positive, according to the company. Department store month-to-month traffic changes vs. prior year are significantly more negative than mall traffic overall, suggesting that while mall traffic is back, visitors are less inclined to go into retailers' stores.

"People are still going to malls, even though specific retailer traffic may be down," says Bill Ketcham, Adspace Networks' executive vice president and chief marketing officer. "Shoppers are looking for value, and smart retailers that put compelling items on sale and communicate that to mall shoppers near the point of purchase will fare best in this value-oriented environment."