Signs of the Times

An unlikely byproduct of a troubled economy and soaring vacancy rates is a new advertising vehicle for companies that desire direct access to mall shoppers. And mall developers have been quick to bite.

Using empty storefronts as a canvas for oversized ad messages, national and regional advertisers are hawking their wares to in-mall pedestrians via high-definition vinyl overlays called Mallways, promoting everything from beverages to electronics to apparel. The advertising adds graphic interest while simultaneously camouflaging the vacancies behind the messages.

Three large mall owners—Chicago-based General Growth Properties, Beachwood, Ohio-based Developers Diversified Realty (DDR) and Los Angeles-based Westfield Group—have struck deals with a New York City company called Inwindow Outdoor to host in-mall ad campaigns in 50-plus shopping centers around the country. The developers say they have more to gain than visual interest.

“The ads bring relevant messaging to our shoppers in a creative way,” said Marc Feldman, VP of new business development for DDR. “The medium is very eye-catching and it embraces what advertisers are looking for right now—which is interaction at the point of sale.”

The fact that the medium de-emphasizes dark stores is an attractive side benefit, added Feldman, as is the revenue generated.

According to Steve Birnhak, CEO of Inwindow Outdoor and creator of the Mallways product, advertisers agree to volume purchases. “Mallways are intended to provide blanket coverage,” said Birnhak. “An advertiser can buy five of these at a time and get instant coverage in the mall.” In fact, said Birnhak, with five storefronts in one mall, the advertiser stands to “become the largest retailer in the mall, because you’re the largest brand in the mall.”

Advertisers don’t pay by the foot; instead, the adhesive-backed vinyl overlays—which vary in size according to the dimensions of the empty store-front it will cover, but typically run floor-to-ceiling and about 25 to 30 ft. wide—are sold for a flat rate on a four-week rotation schedule. The advertiser pays Inwindow Outdoor for the space, which in turn compensates the mall owner for the use of the storefronts. Those monthly rates can vary widely, reportedly from $1,000 to $8,000 depending on the ad size, foot traffic and desirability of the mall.

“Mallways have dual benefits for the shopping center,” said Feldman, “as the ads increase the bottom-line revenue as well as improve the aesthetics of the center.”

The one challenge that Inwindow Outdoor, the advertisers and the mall owners face, however, is the obvious: If a store is leased to a new tenant before an advertiser’s four-week rotation on that storefront has been completed, what happens? “We keep an open communication line to Inwindow,” said Feldman, “alerting them at the first sign that a space will be leased. We consider it our responsibility to communicate—and Inwindow’s responsibility to find an alternative for that advertiser.”

Developers Diversified is launching Mallways in seven malls to start. One mall—1000 Van Ness in San Francisco—currently has ads in place, and the other six are coming soon.