Media Analysis: Tesco TV flaws show through

instantly transformed it into a media owner in its own right, with the
might - and audience - to take on the traditional TV broadcasters.

The company envisaged that it would be able to transfer its unassailable
position on the high street into the media environment, emulating the
experience of Wal-Mart, which has made a success of selling screen space
in the US. Apparently convinced of its ability to lure advertising
budgets away from traditional advertising media, Tesco hired JCDecaux to
oversee sales on the channel.

Less than two years later, the reality has proved rather different, with
some agencies and advertisers refusing to buy into Tesco TV. Even the
supermarket itself is giving it only qualified support. 'Tesco TV is
still in development, having been in-store for only 18 months,' says a
Tesco spokesman. 'It is popular with customers and many of our smaller
suppliers, who could not normally afford to reach so many consumers
through traditional advertising.'

The mention of 'smaller suppliers' is significant, suggesting that
bigger clients have largely turned their backs on the format. Indeed,
JCDecaux insiders claim the bulk of its revenue comes from direct deals
with advertisers, rather than agencies or outdoor specialists.

Stunted development

Tesco, which orginally said it would install plasma screens in 300 of
its biggest stores, has long since halted the planned roll-out at just
100. JCDecaux, meanwhile, has been forced to slash its rate-card prices,
after advertiser response proved less than overwhelming.

So what has gone wrong? According to Chris O'Donnell, managing director
of OneZeroOne, the digital division of outdoor specialist Kinetic, the
answer lies in a range of areas, not least Tesco's arrogance. What he
finds of most concern is that some of the inevitable teething problems
surrounding Tesco TV's launch are yet to be resolved.

O'Donnell claims the first, and most fundamental problem, was that Tesco
and JCDecaux treated the in-store screens as if they were a TV medium in
their own right.

There was a propensity to encourage advertisers to use Tesco TV to run
broadcast-style ads. These did not work because of the location of the
screens, which are suspended from the ceiling. It has subsequently been
shown that simpler advertising messages with static branding have proved
more successful.

'The frequency was wrong; it is not TV. People don't stand in front of
the screens, they absorb it like any other outdoor medium', says
O'Donnell.

Tesco's attempts at airing content specific to the aisles in which the
screens were placed have also failed to ignite advertisers' passion.
They have been scrapped in favour of ads being given 'run-of-camp'
around the screens.

Worryingly, these problems could have been ironed out before the format
was launched. 'Tesco didn't do enough research into how people look at
the screens,' says O'Donnell. 'You would have thought a company that
sophisticated would have researched it properly.'

This was an issue that also faced media agency Starcom UK. When the
format was first introduced, the agency trialled it for some of its
clients, but based on its experiences, decided not to continue using
it.

'The results were a mixed bag; some were successful and some a real
flop,' says group media director Erica Taylor, who adds that she would
use the medium again only if she were provided with more comprehensive
research.

Agency agendas

There are other factors at play that may have stymied Tesco TV. One of
these is the vested interest of agencies, which Tesco banked on being
the main source of its advertising revenue.

Neil Spencer, partner at media auditing firm Slik, says agencies have
found it cheaper and less labour-intensive to gain the same level of
reach offered by Tesco TV on traditional TV channels.

So far, Tesco TV has not been the success originally promised, failing
to revolutionise in-store screen media by moving it on from the
video-loop ads so beloved of DIY and hardware stores.

However, there are finally signs that Tesco and JCDecaux are grasping
how best to sell the channel to advertisers. Rather than sell it in
isolation, they have started to package it with other in-store marketing
opportunities, such as six-sheet posters, gondola-ends and floor media -
a decision welcomed by both Spencer and O'Donnell.

'Brands are buying Tesco as a destination; they don't want Tesco TV in
isolation. If Tesco gets the formula right with enough fact-based
evidence behind it, potentially, it is a great medium,' concludes
O'Donnell.