P-O-P Advertising

This article outlines the role of point-of-purchase advertising and explains why it has grown in importance in today's promotional climate. Types of POP are described, along with advice on how to get the most from them.

DEFINITION

Point-of-purchase advertising (POP) is an essential part of any sales promotion strategy for products sold through stores. It provides a final, all-important step in the process of capitalizing on brand awareness and influencing individual purchasing decisions.

POP advertising is both a part of the integrated marketing mix and an impulse stimulant. What sets POP advertising apart from other forms of promotional activity is its ability to influence the purchasing decision at the very moment the consumer is selecting a product. That distinction is reflected in the following definition of POP from the Point-of-Purchase Advertising Institute (POPAI):

Displays, signs, structures, and devices that are promotional, and are used to identify, advertise, or merchandise an outlet, service, or product and serve as an aid to retail selling.

The key word here is promotional. Merely stocking a shelf with soap or cereal doesn't make for POP. Nor does a sign that says "Meat Department." But within POP (sometimes known as point-of-sale advertising) are dozens of bright, colorful, sometimes zany items used to encourage the sale of individual brands, product lines, or even entire product categories.

MAJOR TYPES OF POP

It is difficult to categorize POP, because there are many material, design, and construction options plus hybrids that integrate different POP media. The first distinction to make is between temporary POP (in place for six months or less) and permanent (12 months or more). Anything in between is referred to as semipermanent (for more definitions of terms, see Terminology). Within these broad categories are various types of POP, including:

• Displays come in all shapes and sizes, everything from countertop take-one dispensers to dump bins and refrigerated dispensers. What they have in common is that they are designed to perform a designated function for a product or promotional offer. That function may be to create an appealing environment for the product, facilitate restocking, enhance product image, demonstrate product usage, or just grab the attention of shoppers.
  
  
• Signs differ from displays in that the messages on them are more general. They may serve notice that a given brand is being promoted or simply direct shoppers to an area of the store where a product is on sale. Signs attached to a display may include price or other information about the product.
  
  
• Shelf media, such as shelf-talkers and shelf strips, may be attached to existing fixtures, and they don't take up precious floor, wall, or counter space.
  
  
• New media include video displays at checkout, electronic shopping-cart advertising, coupon dispensers, computerized interactive displays, and audio devices that speak to shoppers as they pass down a supermarket aisle.

KEY STATISTICS

Some 14,000 companies sell finished POP materials to end users, reports POPAI, which puts industry revenues at almost $13 billion a year. That means POP ranks third among media in dollar expenditures (behind TV and print but ahead of radio). Permanent displays account for the largest share of those dollars (41 percent), followed by signage (38 percent) and temporary displays (21 percent).

While this medium is well-known for what it does for brand marketers, POP advertising has become immensely important to retailers. According to POPAI's 1997 "Size of the Industry" study (see Research), retailers buy 50 percent of all POP advertising produced, while marketers buy only 41 percent. The restaurant/food service/tavern sector and the apparel/footwear sector are the top two industries investing in POP advertising, with more than $2 billion expended. The fastest-growing segment is the fresh/frozen/refrigerator foods sector, at 15 percent.

Research by POPAI sheds light on POP's rising popularity. Its 1995 Consumer Buying Habits Study (see Research) found that 70 percent of supermarket shoppers made their purchasing decision after arriving at the store, up from 66 percent in 1986. Even more remarkable is the in-store decision rate among shoppers at mass merchants: 74 percent.

REASONS FOR GROWTH

• Changing shopping habits. The increases in two-earner households, single-parent families, longer work hours, and hectic commuting schedules add up to one thing: People have less time to plan purchases before they enter a store.
  
  
• Too much media with too many messages. It's gotten much harder--and more expensive--to saturate a market with a given advertising message. Consumers are bombarded by direct mail and can watch a wide variety of TV stations.
  
  
• Too many products. Today's megastores stock tens of thousands of products, most of them brand names. Within a given category, there may be half a dozen or more products of nearly identical price and quality. POP becomes the instrument for cutting through that retail clutter.
  
  
• Lack of trained retail sales personnel. Knowledgeable salespeople are rarely on hand to guide consumer purchases, even with such high-end items as appliances and consumer electronics. Often, salespeople lack training, or they simply aren't there at all. Thus POP becomes the best means of communicating product benefits where it matters most.
  
  
• Growth of target marketing. The trend away from one-size-fits-all marketing has been a boon for POP. Because demographics vary from neighborhood to neighborhood, each store in a supermarket chain could find that it has a completely different customer base. Under such conditions, POP rivals direct mail as a vehicle for targeted marketing and is more selective than Sunday supplements or spot TV.
  
  
• Cost effectiveness. Reaching a shopper through POP costs about half as much as direct mail and less than one tenth as much as TV advertising.

MAJOR FUNCTIONS

• Display and dispense. POP is often used to house and dispense a product, sometimes in areas of the store that are separate from the product's category.
  
  
• Inform. POP can guide shoppers to the location of a product, convey price or product information, and promote contests or other tie-ins.
  
  
• Demonstrate. Some elaborate displays provide automated sales demonstration, often employing sound, videos, and interactive capabilities. Others demonstrate product virtues through simple graphics and text.
  
  
• Glorify. POP can elevate the status or visibility of a product in-store through the use of large signs, banners, or inflatables (see Doc. 6061,Inflatables for Point-of-Purchase).
  
  
• Organize. By setting off a brand, or even an entire product category, POP can be used to create a more effective selling environment.

STRATEGIC ISSUES

• Research. For all the money spent on POP, it is surprising how many campaigns are conducted with little initial research. Experienced marketers often go with what worked in the past, and neophytes rely on suppliers and agencies to tell them what worked for other clients. While research can be expensive, it is the only way to base your strategy on changing consumer trends and adapt it to the marketing environment of individual stores. By far the best sources of information are the retailers themselves. Large chains have up-to-the minute knowledge of their customers' purchasing habits. Independent "mom and pop" stores are often the most cooperative and can at least provide anecdotal information. Here are some ways to approach research:

Environmental analysis. Collect data from existing surveys and find out all you can about what your competition is doing.

Survey retailers to obtain customer information on a store-by-store basis.

Test your POP solution in sample retail environments that represent the broadest possible cross section of market conditions.

• Establishing goals. The principle objectives should be set before any specific POP options are considered. Are you trying to maximize facings? Increase sales during a promotion? Tie in with a nationwide promotional strategy? Break into a new retail category?
  
  
• Partnering with retailers. Critical to the success of any POP strategy is the degree to which the merchant embraces your program and participates in it. With so many manufacturers vying for floor and shelf space, the best deal often goes to the one that does the best job of partnering with the merchant. Make sure store managers know what's in it for them (such things as increased sales or ease of restocking) and what they are expected to do to participate. Even if you've sold a chain's headquarters on the concept of your promotion, it may not trickle down to store managers and other people you need to make the program work. Consider using incentive programs to inspire greater involvement (see Doc. 3010, Premiums and Incentives).
  
  
• Maintaining brand image. Marketers who spend much time and money establishing a brand identity should follow through with appropriate POP. Everything from the placement of the POP to its design and construction should work to enhance the connection between the product's attributes and the lifestyles of the target audience.
  
  
• Price positioning. How a product is priced relative to its in-store competition is a key determinant in what type of POP to use. For instance, a product being marketed at a higher price point than a similar one sitting next to it has to justify the premium being asked of consumers. For POP, that usually means providing more product information, but it can also entail using higher-quality materials in the construction of the display.
  
  
• Measuring results. It is notoriously difficult to gauge the effectiveness of a POP campaign. Traditionally, marketers have measured the increase in sales at a particular store, but sales may be influenced by many factors, including store ambience, time of year, and other promotions taking place. To get an accurate picture, you'd have to measure traffic at a particular display, then compare it with traffic at other points in the store, especially ones where there's POP. Fanciful as this sounds, it is starting to happen. Barcoding and scanners make it possible to monitor sales of items purchased anywhere in the store. In-store polling and research has improved, as hand-held computers replace clipboards and questionnaires. Even in-store surveillance cameras are being used to monitor traffic at individual POP sites. Though cost/benefit analysis of POP is still crude, marketers are getting closer to the day when they may get an accurate cost-per-thousand figure on their POP advertising.

TACTICAL ISSUES

• Term of campaign. The length of a POP campaign is based on your marketing objectives, the retail environment, and the extent of competitive activity. Establishing a timetable is critical, because this will determine everything from the type of POP to be created to materials and costs. It may even determine such issues as in-store placement and whether to use outside contractors for distribution and restocking.
  
  
• Budget. POP budgets are usually calculated on a per-placement basis. Creative, research, production and similar costs can be amortized over the number of signs and displays. The following guidelines may be helpful. For temporary POP, spend an amount equal to 5 percent of the merchandise displayed. In other words, if the display holds $100 worth of goods, you'd spend $5 per display. For permanent displays, the accepted range is 15 to 20 percent. Of course, many factors can push these percentages up or down.
  
  
• Advertising tie-ins. A POP campaign should reflect the brand's overall marketing message and tie in with other forms of advertising and promotion. Graphics and copy should reflect those used in TV and print campaigns.
  
  
• Components. To arrive at the right combination of POP elements for a campaign, it's essential to determine how they should work together to guide the customer's purchasing decision. The number of possible combinations is nearly endless and can include everything from dump bins and inflatables to signage and countertop displays. First, arrive at the necessary function of the pieces. Is your prime objective promotion? Demonstration? Merchandising? Once that's decided, determine what features will enhance the effectiveness of the combined pieces. Some sample features: making the piece dimensional; designing it so people can shop from all sides; incorporating motion, light, sound, or interactive features.
  
  
• Distribution and setup. Once finished POP is produced, the next step is to assemble the various elements, get them to the stores, and set them up. That can be harder than it sounds. You need to decide the best way of ensuring that everything is done according to plan. In many cases, finished POP is simply drop shipped to stores, and the retailer is left to set it up and maintain the display. But there can be problems, especially with complicated displays that have many elements to install. Some brand marketers count on their own sales force to install POP, but, if a rep thinks a display is too cumbersome to bother with, it will probably languish in the trunk of his or her car. You can retain a POP logistics company to go into each store and install your POP, usually for a per-placement fee. That may be the most cost-effective way to go if the alternative is having only 40 percent of your POP make it into the aisles.

CASE HISTORIES

The following examples illustrate ways in which POP works with other forms of advertising, and other in-store sales elements:

• A major petroleum company, crafting a new image for its brand of motor oil, decided that a strong in-store campaign was the best way to cap its marketing effort. The overall marketing campaign included sponsorship of a famous racing driver and a sales message that centered on the oil's ability to reduce engine wear. TV spots featuring the celebrity driver helped establish a high-performance image for the brand. The POP campaign would tie into the other advertising, capitalizing on the popularity of the driver while providing specific consumer information about how the oil worked its magic.
  
  The promotion agency recommended a temporary POP campaign featuring a floor standee, a life-size image of the driver placed near the oil section of large auto parts stores. Shelf-talkers described the oil's benefits, and take-one dispensers with brochures were placed on counters in the parts department and at checkout. To encourage retailer participation, the company produced a sales brochure detailing the national TV campaign and the race sponsorship, with projections on how the POP promotion might increase store traffic.
  
  
• A leading manufacturer of window blinds had long relied on value pricing and knowledgeable in-store sales personnel to maintain sales volume. New competition plus the rise of mass merchants and large home centers, both of which lacked trained personnel, forced the company to rethink its in-store strategy. Research indicated that category management was poor in the home centers and almost nonexistent at mass merchants. Often, the window blinds were simply stacked against a wall with no accompanying signage.
  
  Since surveys indicated that most consumers don't know much about selecting blinds, the company decided to base its campaign on attention-getting packaging combined with permanent POP. It developed a merchandiser that could be sized to fit a variety of space configurations and attached signage that guided the customer through the process of sizing and installing various window treatments. The pitch to retailers was that they would benefit from improved category management in the form of a self-service center for window blinds.

FINDING A SUPPLIER

POP is a complex business that may involve many contractors, subcontractors, and sub-subcontractors. For example, if your campaign includes items made of acrylic, corrugated boxboard, and offset-printed signage, you will likely get them from three separate manufacturers. Each of them, in turn, may outsource some of the work to a variety of other companies. It's up to you to make sure everyone is on the same page.

Most POP suppliers fall into one of the following categories:

POP agencies or POP units within promotion or advertising agencies. They are equipped to handle all aspects of POP strategy, design, manufacture, and implementation. They usually outsource most of the processes, preferring to serve as custodians of the campaign.

Brokers provide a link between corporate clients and manufacturers. A typical broker represents a number of manufacturers that produce a variety of POP materials. Agencies often work through brokers.

Manufacturers produce finished POP. Although they often have little direct contact with advertisers, that isn't always the case. Some, for instance, provide design services. Others have close relationships with large retailers, which can be enormously helpful to you in developing strategy and gaining access to stores.

POP logistics companies do everything from warehousing and drop shipping POP materials to setting them up in stores.

Finding the best qualified suppliers for your program is a challenge. The following service is designed to facilitate the process and make sure that you have access to the best people for the job.
To find a supplier, go to #9520, Supplier Finder.

PRODUCTION TIMETABLE

Thanks to technology gains, lead times have been dramatically cut for the planning, development, and execution of POP advertising campaigns. However, it's still wise (and more cost-efficient) to allow plenty of time. Once the specifications for POP materials are set, it generally takes two or three months before the program is ready to roll out. More ambitious projects obviously take longer. If you're a big client, you can usually get a manufacturer to schedule your work ahead of everyone else's. Paying rush fees for part of the program can turn a two-week job into two days for that particular element. The following is a rough guide:

• An agency or a manufacturer creates an initial sketch and submits it to the client for approval--2 to 10 days;
• Color drawings are presented to the client--5 to 7 days later;
• A prototype is produced--2 weeks later for a temporary display, 6 weeks for a permanent display;
• Tooling--2 to 20 weeks, depending on the materials to be used.
• Production--2 weeks; allow longer for certain motorized, computerized, or otherwise complicated products or if there is significant hand-assembly;
• Combining all the elements for distribution to stores--1 week.

ASSOCIATIONS

• Point-of-Purchase Advertising Institute (POPAI), which has as members about 20 percent of the companies that produce POP projects, is the best source for general information and names of suppliers. Call 202-530-3000; fax 202-530-3030; go to http://www.popai.com.
  
  
• Promotion Marketing Association (PMA). Its members are mainly companies dealing in promotion services, sales incentives, and premium merchandise. Others members include advertising agencies and consultants. PMA offers seminars and conventions throughout the year, a membership directory, and legal information services, as well as two newsletters, The Legal Bulletin and Outlook. Call 212-420-1100; fax 212-533-7622; click on http://www.pmalink.org

TRADE SHOWS AND CONFERENCES

For a list of Industry Events, go to #9510, Calendar of Industry Events.

RESEARCH

• The POPAI 1995 "Consumer Buying Habits" study is a comprehensive survey of POP effectiveness and consumer attitudes at supermarkets and mass merchandisers. $125 POPAI members, $375 nonmembers. Call 202-530-3000.
  
  
• POPAI 1996 "Market Size and Structure" study is the benchmark for scientifically determining the size and scope of the industry. Free to POPAI members, $5 nonmembers. Call 202-530-3000.
  
  
• POPAI 1997 "Size of the Industry" study is the latest report on the vitality and magnitude of the POP advertising industry. It serves as a follow-up to the benchmark "Market Size and Structure" study. Free to POPAI members, $15 nonmembers. Call 202-530-3000.

BOOKS

The Dartnell Sales Promotion Handbook. With chapters on POP and in-store marketing, this book is a proper starting point for the uninitiated. 910 pp. $69.95. Dartnell. Call 800-621-5463.

PUBLICATIONS

P-O-P Times is a leading publication for the industry. In addition to its monthly coverage of trends and technology, it publishes supplements about various aspects of POP. Free to qualified readers, otherwise $55/year. Call 847-675-7400.

Point of Purchase Magazine, another leading publication, covers POP news, trends, and strategies from the perspective of both the brand marketer and the retailer. 9 times/year. Free to qualified subscribers, otherwise $60/year. Call 800-241-9034.

Potentials in Marketing regularly runs stories on various aspects of POP design and strategy. Free to qualified readers, otherwise $24/year. Call 612-333-0471.

Promo is a monthly magazine for people who make promotion marketing part of their job. Heavy packaged-goods emphasis. Free to qualified readers, otherwise $65/year. Call 203-358-4351, 800-463-4054 (subscriptions).

The Creative Magazine of Promotion and Marketing regularly covers sales promotions, displays, inflatables, and exhibits. Free to qualified readers, otherwise $30/year. Call 212-840-0160.

TERMINOLOGY

The following definitions are based on those found in the P.O.P. Desktop Reference, published by POPAI, with additional terms from the Wall Street Journal:

aisle interrupter: a cardboard sign that juts into the middle of the aisle;
assortment display: a display designed to offer the customer a choice of sizes, colors, or types of merchandise;
back card: a card unit, attached to the back of a dump bin, floor bin, or counter merchandiser, that presents the advertising message at eye level;
bottle-topper: a small cardboard display designed to circle the neck of a bottle and carry an advertising message;
cart wrap: a printed advertising message designed to wrap around a shopping cart;
change-maker: any small counter display or device that holds products near a checkout to generate an impulse purchase from small change after another purchase has been made;
continuity program: a promotion that encourages regular shopping visits by consumers;
counter card: a card with a brand name and product information, designed for use on the checkout or service counter;
dangler: a display panel, suspended either from the ceiling or from shelving, that moves with air circulation;
demonstrator display: a display that shows the function of a product;
department-maker: a display and/or collateral material used to dominate a specific department of a store;
dispenser: 1. a sign or display containing a literature pocket or a tear-off pad (see take-one); 2. a display containing merchandise for sale;
display card: a piece of display advertising, printed or mounted on cardboard, for attachment to a display of merchandise;
dump bin: a bin containing merchandise in random order that's designed to stand on the floor;
end-aisle display or end-cap display: a display accommodating a large group of products, designed for placement at the end of a store aisle;
facings: the number of packages of an item on the front line of the store shelf or in the front of a merchandising display;
floor standee: a boxboard display that stands on the floor, often bearing a life-size image of a celebrity;
gondola: island shelving, open on two sides (common to self-service stores);
glorifier: a small plastic "stage" that elevates one product above the rest;
header: a message board projecting above the display, giving the headline or the advertising message;
light box: a box-shaped display unit in which a back-lighted transparency forms one face of the box;
lipstick board: a plastic susrface on which messages are written with crayons;
merchandiser: a display containing merchandise for immediate sale;
necker: a coupon hanging on a bottle neck;
pallet display: a mass display of product built on a pallet and contained in corrugated boxes or other structural components;
pre-pack: a display designed to be packed with merchandise by the advertiser and shipped as a unit;
shelf-extender: a small tray, designed to fasten to the shelf and project from it, extending the space of the shelf;
shelf strip: a device of tag stock, plastic, or other material, pressure-fit into the price railing under a product as an attention-getting device;
shelf-talker: a printed card designed to lie on the shelf under the product and project downward to carry an advertising message that will call attention to the product;
take-one dispenser: a small countertop device containing promotional literature;
tent card: a single-fold card for use on counters, bars, or tables;
ticky-tack: a rough model of a permanent display, built to judge size and appearance;
traveling display: a display designed to be shipped, so it can be reused in various retail outlets;
video merchandiser: a custom merchandising unit using electronic images and text to convey promotional messages;
Y.E.S. unit: "Your Extra Salesperson," a fact sheet that pulls down like a shade;
wobbler: a lightweight display that hangs, say, over a frozen food case and bobs and turns with the air currents emitted by the case.

ACKNOWLEDGMENTS

The following people helped with the development of this article:

• Tracy Butzko, group director-sales, The Dartnell Corp. Call 800-621-5463, ext. 3150.
• Clint Oberst, vice president, sales and marketing, Clinton Associates. Call 606-647-9910.
• John Roche, marketing manager, Frank Mayer & Associates Inc. Call 414-377-4700.