Retailer Ad Spends Near Flat for Holiday

A BDO USA study found that chief marketing officers at leading U.S. retailers held their holiday and advertising budgets steady this year.

View Slideshow

’Tis the season for advertising spending.

For the crucial holiday selling season, retailers appear to be armed with advertising budgets equal to, or slightly larger than, last year. According to a spot check of ad agencies, consulting firms and retailers, stores are employing a combination of digital, print, TV and outdoor advertising to drum up holiday business. While gift-giving appears to be the dominant trend, many are using newspapers, inserts and online ads for promotional purposes and to encourage self-purchases.

A BDO USA study found that chief marketing officers at leading U.S. retailers held their holiday and advertising budgets steady this year. In a survey of 100 retail CMOs from the end of September to the end of October, 65 percent said their 2011 holiday marketing and advertising budget remained the same compared with last year. Twenty percent said their budgets increased, although the increase was less than one percent. Only 36 percent of CMOs said they included mobile in their holiday marketing strategy this year. Of those that did, 84 percent said mobile accounted for less than 10 percent of their holiday marketing efforts.

BDO retail partner Steve Ferrara observed that with mobile marketing still in the experimental stage, flat holiday advertising budgets didn’t leave much room for testing “new waters.”

According to Ferrara, the budgets were spent in three key areas: print, broadcast and online.

Forty-four percent of CMOs said they spent most of their budgets on print advertising, up from 42 percent in 2010 but way down from 64 percent in 2009, Ferrara said.

As for other media, 27 percent said the bulk of their ad spend was in broadcast, up slightly from 25 percent last year. In 2009, only 13 percent said the bulk of their budget was in their broadcast ad spend.

Twenty-three percent of the CMOs said the bulk of their budgets was spent on online ads, which dipped slightly from 27 percent last year. In 2009, only 18 percent said the bulk of their ad spend was online.

Of those 23 percent whose budgets were primarily for online ads, “Eighty-four percent said they focused less than 10 percent on mobile marketing. Ninety-three percent said less than 20 percent was on mobile for marketing efforts,” Ferrara said.

According to Ferrara, the survey also showed that social networking sites are becoming a bigger component of the retailers’ marketing strategies, in part because it doesn’t cost much to send out e-mails. Eighty-two percent said social media was a part of their strategy this year, up from 75 percent in 2010 and just 51 percent in 2009. In 2007, only 4 percent included social media in their marketing efforts.

One fact gleaned from the survey is that Facebook still dominated social media marketing, with 94 percent of CMOs surveyed saying their efforts were focused on the social networking site. Forty-seven percent included Twitter, but that’s down from 61 percent in 2010. Twelve percent of the executives surveyed also used LinkedIn for their social marketing, with 11 percent using YouTube and 8 percent focusing on Foursquare.

A separate survey of media buyers conducted by STRATA, a Chicago-based provider of media buying and selling software, found most advertisers plan to spend at least as much this holiday season as they did a year ago, and a few are increasing their ad budgets.

John Shelton, chief executive officer of STRATA, said that based on its Holiday Flash Survey of 43 high-level media buyers, ad budgets have either stayed the same or increased this holiday season, and very few reported a drop in advertising compared to last year. “As a matter of fact, we had some agencies say that they witnessed ad budgets increase more than 20 percent compared to the 2010 holiday season. This does make sense as many advertisers focus on the holiday season to ‘save their year,’” said Shelton.

View Slideshow
  • 1
  • 2
Next »
load comments


Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
News from WWD

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

getIsArchiveOnly= hasAccess=false hasArchiveAccess=false