Supermarket shopping carts: To Bruce Failing Sr., a veteran wholesale-food marketer, every one was a four-wheeled billboard just waiting for an advertiser's message. The year was 1972. The American woman, the traditional target for food advertising, was as likely to be spending her days at the office as at home humming the jingles of soap-opera commercials. When she or her newly indoctrinated shopper-husband went to the supermarket, they were confronted with ever-bigger stores, an ever-larger array of products and brand names, and less time to make their selections. What better way to help them compose their shopping lists than in-store advertising -- especially since two thirds of buying decisions are made at the store anyway?
"Bruce Senior thought it was an original idea," says Filing's son and business partner, Bruce Failing Jr. "But of course, it wasn't," adds the elder Failing.
Around 20 other companies had tried tacking ads on shopping carts before the Failings founded Actmedia Inc., but they had little success. After two years of research, aided by Cornell University students, the Failings came up with a plan to avoid the pitfalls of the earlier entrants -- a plan that is largely responsible for making the Westhampton Beach, N.Y., company the $25-million in-store advertising and promotion leader that it has become.
First, the Failings eschewed the "Christmas-tree approach," as Bruce Jr. puts it -- throwing the switch on a nationwide operation all at once -- in favor of slower regional growth. They also resigned themselves to heavy sacrifices in both profits (there were none until 1980) and equity (thanks to venture capital and a pair of public offerings, the Failings share of the company, once as high as 52%, is now 25%). These were survival tactics, says Bruce Jr. Until Actmedia proved itself, "it took months of test marketing to convince an advertiser that we could deliver the number of households we said we could." The company delivers more households per week than any one television network, or even the Super Bowl broad-cast. "Then it was another year to actually get in the [advertising] budget," he says. In the meantime, "the cash burn was incredible."
But the key factor in attracting and retaining both the 60 advertisers and the 164 supermarket chains Actmedia now serves is its field force of 5,000 trained, part-time employees. These are the troops that are in the A&P, the Safeway, and the Winn-Dixie supermarkets each week, talking with managers and replacing the occasional broken display unit. In the last three days of each four-week advertising period, queues of shopping carts are pulled apart, and each old ad is replaced with a new one.
"That's where a number of our predecessors made their mistakes," says Bruce Sr. "They relied on store managers to place the ads." Although the chains earn a 25% commission on all Actmedia ad sales, store managers have nowhere near the incentive Actmedia employees have to be sure the ads are in the right spot at the right time.
Having earned its place in the market -- literally -- Actmedia is expanding into related activities. Its ads are now on overhead aisle directories, and the company has started in-store coupon distribution. "The shopper doesn't have to clip the coupon and remember to bring it to the store," says Bruce Jr. And advertisers don't have to worry about competing with other coupons, since Actmedia promotes only one company per product category at a time. Its in-store redemption rate is triple that of newspaper coupons -- and its coupon-users are twice as likely to be the first-time buyers that manufacturers seek.
The newest of Actmedia's promotional activities is in-store product sampling and demonstrations. The company is booked through 1986 to cook pizzas, pour orange juice, and even clean dirty bathroom tiles. It is a labor-intensive operation with potential scheduling and quality-control snafus, but at $1.5 million per program, it pays.
"Again, we haven't invented anything," Bruce Jr. says with a laugh. "It's just another simple idea that's hard to execute on a national level. And that's what Actmedia does best."