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Muzak Controlled by Business Rules

(Posted by Guest Blogger and Mystery Shopper, Ian Turvill.)

I spied an article yesterday in Advertising Age ("In-store Radio Is Music to Some Retailers' Ears"), which describes a significant innovation in how radio-type programming can be delivered to retail outlets, such as department stores and pharmacies.

Now, "in-store radio" is certainly not new, but it has remained pretty much the same for the several decades in which it has been in use.  I don't mean that they're still playing the same Elton John and Leo Sayer records from the 70s, but rather that in-store radio has never really attempted to deliver different programming to different stores at different times - it's always been the same thing network-wide.

But that has now changed given that Boston-based POP (Point of Purchase) Radio has entered the industry.  Thanks to a partnership with CBS's Westwood One, POP Radio allows agencies and advertisers to insert 30-second spots "hyper-targeting 25- to 54-year-old women".  The advantages to traditional advertisers of this approach are clear:

"Drawn by the medium's ability to quickly change messages, its lower comparative ad cost than regular radio and research showing that sales of POP-advertised products jumped an average of 17%, large national retailers such as Kmart and Rite Aid have signed on. Total in-store carriage is at 10,900 locations; retailers share in the ad revenue, though POP won't disclose financial arrangements."

To understand its impact, consider this potential application:

"If a pharmaceutical company called me and said a product is not moving on shelves, I could literally get a message out on what they want to target within 24 hours," said Westwood One CEO Peter Kosann. "Rather than one coupon or one point-of-purchase display, I can run an audio campaign across all 11,000 stores or target by store location." [My emphasis]

But what really struck me most was a statement by POP CEO Gary Seem:

"If advertisers want to roll out messages based on incidence of cold and flu across the country, they can trigger the message to play market by market or retailer to retailer," said Gary Seem, president-CEO of POP Radio. And if an advertiser is really interested, the copy can even get down to the ZIP code level. "It creates a nightmare to execute, but we can do it."  [My emphasis]

This sounds like a problem another major media outlet recently tackled through Enterprise Decision Management.  It was faced with an incredibly complex advertising environment.  It had many advertisers, each with unique contracts, and the nature of its programming was such that it had many programming changes; and when programming changes, then advertising schedules must change, too.

The channel now uses Enterprise Decision Management to drive a scheduling system that captures the expertise of its best commercial schedulers.  It is driven by the rules that are inherent in the advertisers' contracts, such as "exclusivity" - for example, only the biggest sponsor gets the best slots - and "rotation" - advertiser’s commercials spread out over one month.  The benefits are that commercials can be scheduled in minutes, and that automatic rescheduling takes place whenever the programming lineup changes. Additionally, the commercial sales team has an accurate up to the minute picture of commercial air inventory.

So, Mr. Seem, we feel your pain.  But if you subscribe to this blog, perhaps you'll get some real good ideas about how to make nightmare go away.

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