NEW YORK CITY—Malls have long sported small advertisements and held special events to draw and keep shoppers around longer. Typically these efforts are very localized, with each mall handing the process.

That’s on the verge of changing. In September, the New York-based media research firm Arbitron Inc. and Scarborough Research, a shopping-pattern research firm that’s a joint venture of Arbitron and VNU Inc., unveiled plans to develop “reach and frequency” metrics for malls, a set of methodologies for measuring who sees what in mall-based advertising and marketing. Universally accepted metrics for malls do not currently exist, and their creation would help facilitate the acceptance of malls as marketing platforms among the media-buying industry. It could also mean millions in additional revenue for shopping mall owners.

“There are millions of Americans who shop at malls on a regular basis, so it’s a large-reach opportunity for advertisers,” Bill Rose, VP and general manager of Arbitron New Ventures, tells GSR. “More importantly, it reaches people when they have their shopping hat on, when they’re making their buying decisions. Conceptually it makes a lot of sense. The closer to the purchasing decision, the more effective the advertising is going to be. That’s a value proposition for advertisers.

“Still, more work needs to be done to promote the value of the medium,” he continues. “Simon Properties has begun this, but more remains to be done. You want advertisers to understand malls as media. We need to promote the idea aggressively, because there are a lot of other advertising propositions out there.”

Indianapolis-based Simon Properties—which is a client of Arbitron’s and which commissioned the creation of mall metrics (along with other mall owners)—has been leading the charge to make malls a standard marketing medium. With interest or ownership of over 240 malls in the United States alone, Simon stands to gain more than any other owner.

“If you look at quantifying the traffic, it was historically left to the mall owners to make the counts,” says Stewart Stockdale, chief marketing officer of Simon and president of Simon. “But to get credibility in the media-buying community, among the big players, we need to be ratified by companies like Arbitron. In four to six months there will be metrics of reach and frequency for the shopping center industry, just as there are for TV, outdoor, Internet and other media.”

Simon has already struck a number of deals with major advertisers— such as Coca-Cola, Visa and Cingular Wireless—for advertising placement in its malls, both interior and exterior, static and digital. But a true mall-based marketing platform goes beyond that. “Part of the mall as media isn’t just the advertising, but also marketing activity, whether it’s trying to sell the product in person or give away samples of it, or provide shoppers with an experience,” Stockdale tells GSR.

Along those lines, Simon has rolled out a number of events at its malls recently, typically aimed at certain demographics and usually sponsored by a high-profile consumer item. Simon DTour Live, for instance, targets teens by showcasing live performance at malls by singers of interest to that age group, with Coke as the main sponsor. In a related effort, Simon has created Visa-based prepaid gift cards with its name on them, and in some cases with a sponsor’s name on them, good for purchases at Simon Malls. In its first year, 2003, Simon sold about $340 million worth of the gift cards.

This week Simon unveiled a marketing plan with Austin-based Digital Lifestyles Group to set up advertising and display stations in 17 of its malls featuring “hip-e,” a “lifestyle computer” whose target demographic is teenagers. The mall-based stations will be a public version of equipment that DLG sells that allows teens to talk to friends, surf the Internet, get news, watch TV and movies, listen to music, shop, and play games all in one place. “During our initial research, we asked teens where they would like to see more about hip-e, and they responded ‘the mall,’ ” says Annie Bacon, DLG’s VP of marketing.

Simon isn’t the only mall owner looking to extract marketing revenue from its properties. “It’s an industrywide trend,” says Wally Brewster, SVP of marketing at Chicago-based General Growth Properties, the second-largest owner of American malls after Simon. “It’s a scalable phenomenon, so that even some smaller owners ought to be able to figure out how to benefit from the establishment of metrics.”

General Growth is currently developing its own strategies for mall-based marketing. Earlier this year, the REIT inked a deal with Twentieth Century Fox to promote movies at GGP malls. Brewster expects other marketing tie-ins and events at GGP in the future.

“It’s a very flexible way to market some kinds of products,” he tells GSR. “It benefits the malls, through revenue streams of course, but also by educating consumers—mallgoers—and ehancing the experience of going to a mall, making it more interesting.”

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