Retailers behind increase in online advertising

Filed under: Retail |

U.S. Internet advertising revenue reached $12.5 billion in 2005, a 30 percent increase compared to 2004, according to The Interactive Advertising Bureau and PricewaterhouseCoopers.

The organizations’ Internet Advertising Revenue Report tracks spending on search, classifieds, display and rich media ads.

Internet advertising revenue for the fourth quarter of 2005 totaled $3.6 billion, up 34 percent compared to the same quarter a year earlier.

Consumer advertisers drive online advertising, with retailers the largest spenders, the report says.

Consumer advertisers accounted for 51 percent of 2005 online spending, up from 49 percent in 2004. Retailers accounted for 49 percent of consumer advertising spending, up from 47 percent a year earlier. Other significant components of consumer advertising were automotive (20 percent), leisure (14 percent) and entertainment (10 percent).

Online advertising ranks seventh among advertising media.

The top media are: Direct mail, $56.6 billion; newspapers, $47.9 billion; broadcast and syndicated television, $35 billion; radio, $21.7 billion; cable television, $18.7 billion; consumer magazines, $12.9 billion; online, $12.4 billion; business magazines, $7.8 billion; and outdoor, $6.2 billion.

Redbox DVD rental machines appearing in more stores

Redbox Automated Retail has placed hundreds of the DVD Kiosks in McDonald’s restaurants in six cities.

Movie Gallery also is experimenting with the DVD rental machines – hoping to make transactions easier for customers and thus making its stores more efficient.

The rental business has been struggling to move away from the mom-and-pop video stores of 20 years ago. The rental business has suffered from the sale of cheap DVDs, rent-by-mail services like Netflix Inc. and expanding video-on-demand from cable television companies.

Papa John’s rolls out with its 10-minute pizzas

Papa John’s has announced plans for what it claims will be the fastest made-to-order pizza in America.

If all goes as planned, the No. 3 pizza chain would become the first national retailer to provide fresh pizzas in 10 minutes – or less.

During the next two years, Papa John’s will spend $20 million to roll out 1,500 ovens with higher air velocity and higher-speed burners in about 750 stores. That will cut pizza cooking time from six minutes to four minutes at one-third of the chain’s 2,500 stores.

The “10-minutes or less or it’s free” guarantee will apply only to carry-out orders during lunch. That’s when the clock is ticking loudest for many consumers, and it’s when business is typically slowest for pizza sellers.

Little Caesar’s sells Hot-N-Ready pizzas that are immediately available, but are not made-to-order.

Papa John’s has ranked No. 1 in customer satisfaction among fast-food chains in the American Customer Satisfaction Index for the past six years.

Speed hasn’t always been the pizza industry’s friend. In late 1993, Domino’s dropped its highly publicized 30-minute delivery guarantee. The move followed lawsuits and settlements that cost the company millions of dollars because of automobile accidents involving Domino’s drivers.

Arby’s to use Visa Contactless payments

Arby’s Restaurant Group Inc. is partnering with Visa to accept Visa Contactless payments at its corporate restaurants nationwide.

Visa Contactless technology makes the purchasing process faster and more convenient. Customers can make a purchase by simply holding their Visa Contactless card near a secure reader at checkout instead of swiping it.

Arby’s plans to install contactless card readers inside its restaurants and drive-thru windows during the third quarter of 2006.

Visa Contactless is a feature found on a growing number of Visa cards. It uses radio-frequency technology to send payment information over an extremely short distance to the point of sale terminal. All other aspects of the contactless transaction are handled in the same way as a traditional Visa payment transaction.

Visa Contactless eliminates the need for a signature for payments under $25, while maintaining the security protections. Also, cardholders making purchases at Arby’s with Visa Contactless will have additional layers of security because the card never leaves a customer’s hand, can only be read at extremely close proximity to a contactless reader and uses data that is unique to each contactless transaction.

More than 30,000 merchant locations in the United States accept contactless payments, and nationwide millions of contactless cards have been issued during the last 12 months.

Visa is conducting a mobile payment trial at the Philips Arena in Atlanta, extending the speed and convenience of contactless payments to mobile phones. Trial participants are able to initiate a contactless payment by holding their phone in front of a contactless reader at concession stands.

Joan Johnson covers retail for the Colorado Springs Business Journal.