Brea, The Shops, MainPlace Join Program; South Coast Passes
Brick-and-mortar retailers are borrowing an idea from their Internet competition: in-your-face advertising.
Just as Internet shoppers are accustomed to navigating their way through banner advertisements, visitors to several local malls will soon be the target of fancy signs touting Ford, VISA, Universal Studios and other national brands.
Three local malls,Brea Mall, the Shops at Mission Viejo and MainPlace/Santa Ana,plan to launch the program next month, changing the centers’ visual landscape by adding kiosks, large back-lit posters, high-definition plasma screens, scrolling panels and circular billboards that will display between one and three panels.
The ads will be similar to, but generally more stylish than, those that are seen in many airport terminals.
In the past, mall advertising was limited to the back of store directories or temporary barricades, but this new concept will put the messages in almost constant view of shoppers. The malls will get a cut of the ad revenue.
The three local malls are part of the JCDecaux MallScape 2000 program. Other local centers planning to launch the program later this year or early next year include Westminster Mall and Laguna Hills Mall.
Bill Wardell, senior vice president of sales and marketing at the New York offices of Paris, France-based JCDecaux, said about 240 malls in 20 markets nationwide are set to participate in the program. He said OC is the third market launching, behind New Jersey and Illinois.
Under the plan, a 1-million-square-foot center would have an average of 65 structures providing 120 to 150 advertising faces. About 70% of the faces will be inside the mall with the other 30% in the parking lot and along sidewalks. According to JCDecaux, the OC malls involved in the program generate 833,000 to 1.4 million average visits per month.
So far the program has attracted two mall operators: Indianapolis, Ind.-based Simon Property Group, which operates 242 malls and shopping centers, including Brea, Westminster, Laguna Hills malls and the newly renovated Shops at Mission Viejo, and Urban Retail Properties in Chicago, which operates more than 100 properties, including MainPlace in Santa Ana and Century Plaza in Los Angeles (which is also launching the program in March).
Two other shopping mall operators are also considering joining, Wardell said.
Some Risks Involved
Some suggest the campaign could potentially backfire by creating a cluttered-looking environment. The malls will monitor the campaign closely to avoid that problem, said Cindy Bohde, senior vice president of marketing for Urban Retail Properties.
The opportunity to do such advertising has been shopped around mall owners before. Bohde said the key to the JCDecaux program was assembling a group of high-recognition advertisers; offering attractive designs, maintenance and support; and providing “a significant amount of money, more than any other company has presented to us.”
“We think the environment will be enhanced by the structures because they are architecturally appealing and tests have shown consumers are responsive to the enhancements,” said Drew Sheinman, senior vice president, business and development, Simon Properties Group in New York.
The ad revenue generated by the program is split 60-40 between JCDecaux and the malls.
An advertiser under the plan might pay $500 to post an ad for two weeks on a 47-by-69-inch panel. For a 1-million-square-foot mall, when fully leased the program would generate monthly revenue of between $60,000 and $75,000, with mall operators collecting between $24,000 and $30,000 a month.
The largest build-out will be at Brea Mall whose plans are to install 185 ad faces that would deliver potentially $440,000 in new annual mall revenue.
The advertisers include Banana Republic, Ford Motor Company, Universal Pictures, Paramount Pictures and VISA International.
Ford joined the program to target females, which comprise 63% of mall shoppers, Wardell said: “The car manufacturers have discovered that is a primary, growing audience and that the mall environment is a natural way to reach them.”
Another target audience for advertisers is the youthful “mall rat,” Wardell said. Excite.com is one of the advertisers trying to reach this group, he said.
Not for Everyone
But the new concept is not for every mall.
The county’s largest shopping center, South Coast Plaza, is cool to the concept.
It has only a handful of advertisements from stores within the center and they are restricted to the backs of directories. Debra Gunn Downing, South Coast Plaza’s director of marketing, said the center prefers to keep the premises free of clutter.
“Those are open areas that are sacred to us. We wouldn’t compromise our common area with a lot of outside advertising and computer terminals and equipment We are very sensitive to keeping it beautiful,” she said.
Nate Franke, partner and retail analyst, Deloitte & Touche LLP in Costa Mesa, said he believes the campaign is a good use of wall and floor space, but that these structures will need to steer clear of obstructing the view of tenants who provide a mall owner’s bread and butter. Also, the placement could hinder the flow of foot traffic.
“There needs to be the right placement. Clearly, the tenants that pay the most rent are in the high-traffic areas of the malls where you would want to put these structures,” Franke said.
Other Strategies
Malls are finding other ways to attract ad revenue, too.
Arlington, Va.-based The Mills Corporation, which owns and operates the Block at Orange, announced recently that it plans to name a new mall in Gwinnett County, Ga. after Discover Financial Services Inc. The 1.3 million-square-foot Discover Mills center will provide shoppers who use the Discover credit card with valet parking, beverages and other services and discounts.
The Irvine Company, which operates Fashion Island, the Irvine Spectrum, and the Market Place Tustin/Irvine, recently created a new position in an effort to target new advertising revenue and sponsorship opportunities for its mall portfolio, said spokesman Paul Kranhold.
Buena Park Mall’s General Manager Kenneth J. Kraus said his company plans to incorporate additional advertising structures as part of its $45 million redevelopment.
Simon Properties has created partnerships such as a 30-city “Joy of Cola” promotion with Pepsi and an interactive NFL theme park with VISA where visitors to malls could toss footballs and test other skills.
“For the last several years, malls have been competing against themselves,” Franke said. “But now the Internet is upon us so shopping malls will have to continue to do things to draw shoppers in and make them want to go shopping in the mall, as opposed to sitting at home on the Internet.” n
