-By Katy Bachman

Walmart, the nation's largest retailer, is taking its in-store network digital, a move that promises to redefine the nascent out-of-home video network medium. Rolling out in time for the holiday season to about 300 stores, the Walmart Smart Network will be powered by Internet Protocol Television, allowing content and advertising to be monitored and controlled down to a single screen. By 2010, Walmart anticipates chain-wide deployment of 27,000 screens by early 2010.

Initially, advertisers (limited to those companies with products in the store), will be required to buy across the entire network of stores. As the network rolls out, advertisers will be able to target more precisely by store, by screen, by day and by time-of-day, as well as change messages daily.    

"This represents the wave of the future, a new paradigm for out-of-home [video networks] when marketers can cherry pick by stores, day, time of day and change messages daily," said Steve Faso, vp and director of new media for Outdoor Services, part of the Interpublic Group.

There are hundreds, if not thousands of video networks bursting onto the scene, but most still rely on analog methods to distribute content and advertising. The Walmart Smart Network is the result of two years and $10 million in research and development to find the optimal placement of screens and customized programming to engage consumers at the point of purchase. It will replace in part Walmart's current satellite-delivered network operating in 3,000 stores.

"We've built a network tailored to the way consumers shop our stores, delivering helpful, custom, content closest to the point of decision, that helps them shop smarter," said Stephen Quinn, chief marketing officer for Walmart Stores, U.S. "The Smart Network is intelligent too, because every screen and every message has a purpose and we will be analyzing point of sale data on an ongoing basis to deliver a shopper-centric communications platform."

"This is a very exciting step in retailers recognizing the importance of relevant content on these digital, place-based networks beyond simply the weather and a news ticker. WalMart is raising the bar in this space in all areas, not just the content," said Daniel Wilkins, chief operating officer for Wilkins Media.
  
For the Smart Network, Walmart partnered with three companies: Studio2, which will provide custom programming; Thomson's Premier Retail Networks (PRN), which will provide network operations, implementation and ad sales; and DS-IQ, a company that provided analytical insights for the new network's pilot last year. DS-IQ will also provide advertisers with proof of performance tied to sales reports.
   
Spots on the network will be shorter than 30-seconds in a even mix of ads and content.    
   
"This is a network about brands. All of the content could be classified as advertising, but hopefully, it won't be perceived that way by the consumer. We have the ability to offer clients as little or as much exposure as they want, as long as it meets the needs of the shopper. These won't be like the ads you see at home," said Bill Lynch, executive vp of sales for PRN.