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AT&T, Mall Giant Join Forces

March 28, 1999

NEW YORK (AP) _ AT&T Corp. will advertise and sell its phone service throughout much of the nation’s largest shopping mall empire under a marketing deal with Simon Property Group.

AT&T joins companies such as PepsiCo Inc. and Visa International that see an alliance with Simon as an easy way to get their products exposed to more than 100 million shoppers a year.

``The mall environment is a new and innovative way for AT&T to reach and reward consumers,″ said Jim McFarland, vice president of AT&T consumer services.

Under a deal expected to be announced Monday, Simon will advertise AT&T’s services at 135 of its more than 200 malls and also allow customers to switch their services over to the nation’s largest phone company.

The companies declined to disclose financial details of their agreement.

In addition, AT&T residential customers can participate in Simon’s MALLPeRKS loyalty program, which rewards shoppers with discounts and other offers for every $1 they spend in any Simon mall.

AT&T users can redeem one MALLPeRKS point for every $1 that they spend in monthly long-distance, calling card and local toll charges. They must bring their bill to the mall to get the points.

``The vast majority of the incentive programs that exist in the market today really relate to the top end of the market and the business consumer,″ said Karen Corsaro, president of Simon Brand Ventures, the marketing arm of Simon Property Group. ``But this program is really targeted at the average American who is a mall shopper.″

The AT&T deal is the latest move in Simon’s aggressive branding effort. Simon is facing increasing competition for shoppers as consumers are more pressed for time and have other resources by which to buy, such as catalogs and the Internet.

Simon wants shoppers to know they are at a Simon mall, and get benefits at Simon’s malls that they can’t find anywhere else.

Last month, the Indianapolis-based company announced that it would plaster the Simon name throughout its malls, a move intended to differentiate Simon’s malls from others.

Simon also has been aligning with companies not traditionally marketed at the mall, but see shopping centers as an outlet to reach new customers. PepsiCo has the exclusive rights to sell drinks at vending machines in Simon malls, Visa offers a Simon credit card, and Simon partnered with Time Inc. to create S magazine that will be distributed at all Simon malls.

``The mall is a perfect venue because people are already there primed to shop and are ready to receive commercial messages,″ Corsaro said.

Analysts, however, question whether all of its branding efforts means anything to the consumer.

``Yes, they will be able to attract a few people with all this new marketing,″ said Al Ries, who runs the Atlanta-based marketing consulting firm Ries & Ries. ``But it is a dubious conclusion to think most will care.″

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