An Ad Network in Times Square

By STUART ELLIOTT

THE medium, Marshall McLuhan once said, is the message. On a familiar building in Times Square, the messages are becoming a medium.

As the Walgreen Company — the largest American drugstore chain in sales — formally opens at 1 Times Square on Thursday, executives are describing plans for the giant signs that will festoon the building on three sides. The signs include some diagonal displays resembling wings as tall as 17 stories. It will also serve as an advertising network of sorts as Walgreen and its sales representative, a unit of ABC, peddle commercial time to other marketers.

The new one-building network — WALG, if you will — is to display ads each day for 20 hours, ceasing their pitches from 2 a.m. to 6 a.m. In addition to ads and other promotions for Walgreen, there will be messages from advertisers that produce the kinds of health and beauty items, food products and other merchandise sold in the drugstore.

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Four advertisers have signed multiyear, multimillion-dollar deals to be charter sponsors of the signs: Colgate-Palmolive, Kraft Foods, Johnson & Johnson and L’Oréal. Ads for Colgate Total toothpaste and several L’Oréal makeup products were visible on Wednesday morning as the signs were being tested.

In selling ad space on its signs to companies, Walgreen joins a list of Times Square denizens that includes Thomson Reuters and ABC, part of the Walt Disney Company, whose ABC New Media Services unit is handling ad sales for Walgreen.

The Walgreen signs are indicative of the growing presence in the lives of consumers of new types of advertising outside the home. Media types count the influences on consumers by screens: the TV set is the first screen, the PC is the second and the cellphone or other mobile device the third.

By that token, a big digital sign chockablock with light-emitting diodes, affixed to a building, bus shelter, mall kiosk, supermarket checkout or gasoline pump, is becoming the fourth screen.

“It’s about saying ‘We’re here,’ ” said Kim L. Feil, who was recently named the first chief marketing officer at Walgreen, which is based in Deerfield, Ill. The store at 1 Times Square, occupying 16,200 square feet on three levels, replaces one that Walgreen operated at the site from the 1920s until 1970.

The ad revenue that ABC New Media Services is to collect for Walgreen from other marketers will help defray the costs of the store. Walgreen is paying more than $4 million a year to lease the building from Sherwood Equities, which is a minority owner in and the manager of 1 Times Square.

Plans for the store — the 11th in Manhattan for Walgreen and the 53rd in New York City — began well before the financial crisis that is slowing sales for just about every retailer in the United States not named Wal-Mart.

“We wouldn’t be doing it if we didn’t think it was a business-wise proposition and a marketing-wise proposition,” said Ms. Feil, who is also a vice president of Walgreen, which she joined in September from the Sara Lee Company.

“It isn’t inexpensive,” she added, declining to discuss specific figures, but it is about opening “a flagship store” in “one of the busiest neighborhoods in America.”

The store and its gaudy signs, which have 12 million LEDs, are meant to raise the profile of Walgreen, a company that for decades has preferred to operate without public attention.

“Walgreen wants to put its flag back into the ground” at Broadway and 42nd Street, said Arthur Gilmore, president and chief executive at the Gilmore Group in New York, a design and branding agency that devised the signs. The GG Media unit of Gilmore will produce the ads, promotions, video clips and other sign content being sponsored by Walgreen.

“We’re talking to Wall Street, to shareholders, to customers, that Walgreen is up to something,” Mr. Gilmore said, “and moving the company ahead from a brand standpoint.”

That is why the Walgreen presence on the building is so dominant, he added, joking that when “you turn that corner” on the way to 1 Times Square, “you’re going to get a suntan” from the signs’ light.

Ms. Feil agreed with that approach.

“You go to Times Square to be overwhelmed,” she said. As for the increasing difficulty in standing out in the neighborhood as more signs go up on more buildings, her philosophy is that more is, well, more.

“If we’re going to go in,” Ms. Feil said, “we might as well go big.” A New Jersey company, D3 LED, is building the signs for Walgreen.

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Other new signs in Times Square — long known as spectaculars, for their larger-than-life elements — include a billboard for the Ricoh Americas Corporation at 3 Times Square, designed to be ecologically friendly, and a redesigned LED sign for JVC at 1501 Broadway, to be introduced on Dec. 2.

The Walgreen signs, which include 13 60-inch plasma screens facing 42nd Street, 7th Avenue and Broadway, will not only burnish the images of the brands advertised on them, said Teresa Rix, vice president for ABC New Media Sales, but “pull people off the street to purchase products as they walk by.”

Walgreen will also “be involved in the ‘Good Morning America’ concert series in 2009,” Ms. Rix said. Her division sells the ad space on the giant sign that ABC operates above that show’s studio as well as commercials on TaxiTV in New York City taxi cabs and spots on plasma screens in college bookstores as part of the Digital College Network.

Ads on the Walgreen signs and other Times Square signs are typically sold by the minute, at rates that range from $50 to $75, and scheduled in blocks like two minutes an hour for eight hours a day for eight weeks. The sums can add up to hundreds of thousands of dollars for major ad buys.

The Walgreen signs are above and below the famous news ticker on 1 Times Square, known as the zipper, which was previously sponsored by The New York Times and New York Newsday and is now sponsored by the Dow Jones & Company division of the News Corporation.

Executives of Walgreen, Gilmore and D3 LED plan to attend a news conference at the store on Thursday morning; the signs are to be officially lighted at 8 p.m.

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