The Minnesota Company Rupert Murdoch Couldn't Kill

The Future Looked Bright

Insignia was founded in 1990 to produce and sell a sign-making machine for use by supermarkets and pharmacies. But the product never quite took off, and Insignia sputtered along with only one year of profitability until 1998. That’s when Drill, whose previous company had originally developed Insignia’s signage equipment, was called in to do a makeover. He shifted Insignia’s focus to a different type of signage product that Insignia had had as a secondary business—point-of-purchase services signage, or what it brands POPSigns.

Insignia’s POPSign system doesn’t require supermarkets to purchase any machinery. Instead, Insignia does the printing—using sophisticated software to create in-store signs that feature store-specific advertising along with information from product manufacturers. The system gives Insignia the distinctive capability to create custom signs for each store. A lot of signs: Each week, the company prints and sends out 60,000 signs for about 9,000 stores throughout North America, with as many as 12,000 different combinations of product and price.

To oversee the POPSigns business, Insignia’s new CEO hired Gary Vars, the consultant who developed the system for Insignia in the mid-’90s, to be the company’s general manager. (Vars later became its chairman.) “The tough decision Scott had to make was, was it worth investing in for a company that was burning up money as fast as it could find it?” Vars said in a 2001 Twin Cities Business story on Insignia. “Fortunately, he saw the merits of the [POPSign] program and endorsed it.”

POPSigns turned out to be a hit. Up to that point, there was nothing quite like it on the market. Rather than simply pointing out a product’s availability and price, POPSigns provide information that both retailers and manufacturers believe is crucial to make a sale at the shelf. In essence, the POPSign system helps propel impulse buying of a product in a variety of ways—providing recipes, touting ease of preparation, or announcing new attributes. In short, POPSigns are what Insignia terms “a call to action.” According to the company, POPSigns has proven to produce a sales “lift” of more than 50 percent on almost all products compared to single-digit lifts for competitive in-store signage. In the first quarter of 1998, Insignia sold $10,000 worth of POPSigns. Last March, the company printed its 19-millionth sign, a promotion for Nestlé’s Nesquik Ready-to-Drink that was displayed in Safeway supermarkets.

Insignia makes its money from product manufacturers. They pay the company to place their promotional signs in grocery stores. But in order to attract manufacturers’ business, Insignia needs hundreds of grocery stores under contract to gain access to that important in-store real estate. In a typical deal, the manufacturer pays Insignia about $13 for each sign placed; Insignia pays the retailer about $4.25 and pockets the profit.

By the end of 2001, Insignia had signed a number of major supermarket chains, and everything pointed toward smooth sailing and sustained profitability. “I am enthusiastic about their performance,” one senior stock analyst said in that same 2001 story. Insignia’s stock was selling for around $8.50 at the time. The analyst issued a report on the company with a $20 target price, soon upping that to $25.

The 2001 TCB article noted only one dark cloud on Insignia’s horizon: a lawsuit against the company filed by News America Marketing.