Advertising Joins the Mix of Tenants at Shopping Malls

Shopping centers across the nation are planning to install large, showy advertising displays, uncorking a new stream of revenue for mall owners and transforming retail hubs into advertising runways.

In the Southland, four centers are adding dozens of the back-lit displays this month, including the Shops at Mission Viejo, MainPlace/Santa Ana, Brea Mall and Century City Shopping Center in Los Angeles. So far, 170 shopping centers have signed on to install the 8-foot advertising stands, said JCDecaux, the designer and manufacturer.

They’ll be hard to miss.

At the Mission Viejo mall alone, 65 structures are being set up--mostly inside the shopping center--to display the 4-by-6-foot advertisements, about the size of a bus shelter ad.

The aggressive marketing move signals a shift in attitude about mall advertising, once largely limited to ads on the backs of shopping directories, said Bill Wardell, senior vice president of sales and marketing for JCDecaux USA, the New York-based subsidiary of the parent company in France.

Previously, shopping center operators “didn’t really need this kind of distraction,” he said. But more malls now are owned by publicly held real estate investment trusts intent on boosting profits. So-called REITs own 9% of all shopping centers in the United States, including half of all centers larger than 800,000 square feet, according to a 1999 study by the International Council of Shopping Centers in New York.

With about 185 million people traipsing through America’s shopping centers every month, more companies now consider retail centers smart places to put ads, said Malachy Kavanagh spokesman for the shopping center group. Such high-profile companies as Universal Studios, Ford Motor Co. and Visa International Inc. signed up for JCDecaux’s advertising space.

JCDecaux’s mall advertising strategy received a major boost when Indianapolis-based Simon Property Group, the nation’s largest mall owner, agreed to have the structures installed in about half of its 248 properties. JCDecaux also will install displays in about half of the 77 centers operated by Urban Retail Properties, and 16 malls owned by Taubman Centers Inc., including Beverly Center in Los Angeles.

JCDecaux will get 15-year exclusive advertising rights in the centers, Wardell said. In exchange, it will install and maintain the displays and give the mall owners 40% of the take from advertisers, who will pay $1,000 per panel per month for a minimum of 10 panels at each mall.

The Taubman deal, for example, should generate more than $200 million over 15 years, JCDecaux said.

Simon Properties said its agreement with JCDecaux is just the leading edge of a planned “media network” that eventually will include televisions installed throughout the malls where advertisers can promote their products and customers can also watch programs such as news or cartoons.

But not all centers are interested in opening their malls to outside advertisers. The Southland’s dominant shopping center, privately held South Coast Plaza in Costa Mesa, said it doesn’t plan any such program. The relatively small advertising displays now scattered throughout that mall are only for the mall’s tenants.

“We’re very sensitive to keeping the common areas open and unobstructed,” marketing director Debra Gunn Downing said.

And not all shoppers and merchants are thrilled that advertising displays--however tastefully designed--will be sprouting like weeds at their favorite centers.

“They’re popping up everywhere,” said one kiosk operator at the Shops at Mission Viejo, who asked not to be identified. She and other merchants would prefer that the mall call attention to itself rather than companies that don’t rent space there, she said.

The Mission Viejo mall now has 28 displays. Ultimately, it will have 42 displays inside and 23 in parking areas.

Although the interior displays will be erected where the foot traffic is heaviest, Wardell said JCDecaux will cut back some displays if it starts “getting kind of tight.”

“It’s not that we’re into philanthropy, but we’re very, very conscious of the design element inside the mall,” he said. “The last thing in the world we want to do is create clutter and make a mall look any less inviting than it is.”