Microsoft Takes Digital Ads to Grocery Aisles

NEW YORK Microsoft is expanding its reach into emerging digital channels with a deal to show grocery store customers video ads tied to their past shopping history and location in the store.

Microsoft has begun a pilot program with MediaCart Holdings, a maker of shopping cart computers, and Wakefern ShopRite to show point-of-purchase ads in 220 grocery stores in New Jersey, New York, Connecticut, Pennsylvania and Delaware. The pilot will run nine months.

The system uses location technology to identify where the cart is in the store. It then directs 7- to 15-second ads and product offers to consumers based on items nearby. Nabisco, for instance, could target shoppers in the bakery aisle with an ad and coupon for Oreo cookies.

“If you think about the challenge an advertiser has in the purchase funnel, the ultimate end point is the impulse buy,” said Scott Ferris, general manager of Microsoft Advertiser and Publisher Solutions.

What’s more, Microsoft is serving ads based on prior shopping history stored on ShopRite loyalty cards. The MediaCart shopping carts come equipped with a card swipe, which can be used to display shopping lists. Microsoft will use the non-personally identifiable information to make ad-serving decisions. For instance, a frequent Coca-Cola buyer could get an ad offer for Coke Zero when approaching the soft drink aisle.

The system could eventually close the loop between the Web ads customers see and the purchases they actually make, said Ferris. Since customers go online to create shopping lists, their loyalty cards would then be tied to their Atlas cookie, which tracks what ads they’ve seen. In this way, Nabisco would know how effective their Oreos ads have been in actually driving sales.

Ferris said Microsoft would work with agencies to determine the best creative for the shopping cart. For now, the ads will play automatically. He said the frequency of the spots has yet to be determined.

MediaCart hopes to make the system attractive to customers by adding services to improve the shopping experience. Its carts can provide directions of where to find certain products, for example, and using the ShopRite loyalty card will call up a user’s shopping list and past purchases, as well as electronic coupons that match. It also tabulates the cost of items prior to checkout.

While Microsoft has trailed large rivals like Google and Yahoo! in selling Web ads, it is moving to extend beyond the computer with its digital ad platform. It bought Massive, a provider of advertising on video game platforms. Last May, it bought ScreenTonic, a tech company that serves ads on mobile phones. It acquired the Atlas ad-serving technology in its $6 billion deal for aQuantive. Atlas had already begun serving dynamic ads in video-on-demand programming.

“When you step back, we have a pretty impressive list of technology platforms that cover the gamut of emerging media channels,” Ferris said.

Microsoft is not alone in branching beyond the computer with Internet-like ad targeting. Google has begun a test of showing maps and coupon offers at gas pumps. Start-ups like Ecast are bringing video and banner ads to Internet-enabled jukeboxes.

“When you think of consumer experience, they’re not all gong to be in front of the TV or PC,” Ferris said. “Consumers are mobile and active.”