Wall Street Journal
Wal-Mart ramped up its holiday push with its "Christmas Wish"
commercial, above, during the World Series.
Consumers will face an onslaught of elves and jolly snowmen in the coming weeks, as companies such as Target, Wal-Mart StoresKmart and Gap boost their holiday advertising spending beyond last year's levels.
Kmart began its holiday ad blitz 30 to 40 days in advance of when it started in 2008 and says it has increased what it will spend this holiday season, aiming to sway shoppers with the slogan "There's Smart and There's Kmart Smart."
"We are cautiously optimistic," says Mark Snyder, Kmart's chief marketing officer. "Last year the recession hit [the shopper] right between the eyes and she found herself scrambling. This is the year she said, 'I will do things differently,' so she is looking for deals early."
For the first two weeks of October, retailers reached 35% more viewers—their "ad weight" in industry parlance—on national cable and network television than they did in the same period a year ago, according to TNS Media Intelligence, an ad-tracking service owned by WPP.
"We are seeing increases across a large number of retail advertisers," says Jon Swallen, senior vice president of research at TNS. "Clearly they are trying to jump-start" their sales efforts.
Kmart, Wal-Mart and J.C. Penney have more their doubled their ad weight during the first two weeks of October from a year earlier, TNS says, while Home Depot and Lowe's are each up by almost 50%. J.C. Penney, Lowe's and Home Depot declined to comment on their ad spending.
Kmart began its holiday ad blitz 30 to 40 days in advance of when it started in 2008 and says it has increased what it will spend this holiday season, aiming to sway shoppers with the slogan "There's Smart and There's Kmart Smart."
"We are cautiously optimistic," says Mark Snyder, Kmart's chief marketing officer. "Last year the recession hit [the shopper] right between the eyes and she found herself scrambling. This is the year she said, 'I will do things differently,' so she is looking for deals early."
For the first two weeks of October, retailers reached 35% more viewers—their "ad weight" in industry parlance—on national cable and network television than they did in the same period a year ago, according to TNS Media Intelligence, an ad-tracking service owned by WPP.
"We are seeing increases across a large number of retail advertisers," says Jon Swallen, senior vice president of research at TNS. "Clearly they are trying to jump-start" their sales efforts.
Kmart, Wal-Mart and J.C. Penney have more their doubled their ad weight during the first two weeks of October from a year earlier, TNS says, while Home Depot and Lowe's are each up by almost 50%. J.C. Penney, Lowe's and Home Depot declined to comment on their ad spending.
Gap, which operates Old Navy and Banana Republic in addition to its namesake stores, says it will increase its marketing spending by $25 million in the third quarter and by $45 million in the fourth quarter. The namesake Gap brand is also returning to TV commercials, which it hadn't bought for two years.
The increased ad spending by retailers is a reversal. Even before last fall's economic turmoil struck, retailers had been cutting ad budgets. U.S. ad expenditures by retailers fell about 6% in 2008 to $17.2 billion, according to TNS.
But retailers are grabbing for slices of a pie that has shrunk. Holiday-season consumer spending this year is forecast to remain flat, according to both consulting firm Deloitte and research firm Retail Forward, although it's an improvement over the sales plunge in 2008. Deloitte expects holiday sales this year of $810 billion. In 2008, the research company says sales fell 2.4%, the first time sales have fallen since 1967.
Target declined to be specific about its spending plans. It said there is always a seasonal peak in its advertising and marketing during the holidays but that this year it will "exaggerate that trend."
Wal-Mart Stores, one of the few retailers that continued to increase marketing during the downturn, is also spending "significantly" more this holiday on advertising, according to a person familiar with the matter. Wal-Mart declined to comment.
The world's largest retailer by revenue put its holiday push into full gear during last week's broadcast of the World Series by airing a spot called "Christmas Wish." The commercial, crafted by Interpublic Group's Martin agency, featured U.S. servicemen in the desert, stunned as it begins to snow. The scene switches to a little boy visiting a department store Santa to ask him for a present for his dad.
Even companies that are keeping ad spending flat with last year say the consumer will see an uptick in ads nonetheless, because prices for ad time and space across all media have fallen significantly this year, giving them more bang for the buck. Wal-Mart has previously said that it has been benefiting from media price deflation.
Best Buy's chief marketing officer, Barry Judge, says, "there are many low-cost advertising alternatives." Best Buy, whose ads begin Dec. 12, will use its blue-shirted store employees as Christmas carolers in TV ads. featuring such items as electronic chess games. But the electronics retailer's "Twelpforce"—a Twitter-based tech-support service—will also make use of 'tweets" and Facebook for marketing.
While each company will have a different marketing approach, they all have one thing in common: touting value. Consumers have gotten used to the deep discounts stores resorted to during the recession.
"Frugal is the new cool," says Bob Thacker, the senior vice president for advertising and marketing at OfficeMax. "Consumers may see as many Ebenezer Scrooges in ads this year as they see Santa Clauses."
OfficeMax's holiday push begins Tuesday with a plug for "Dazzling Deals" and includes the company's popular holiday gimmick "Elf Yourself," an online stunt that allows consumers to turn themselves or someone else into an animated elf that can then be sent to friends.
Sears is hawking "More Value, More Christmas" in its ads. One commercial, which begins airing this week, features Santa and his reindeer shopping in Sears and using the Sears Research Center to find the best prices on big-screen TVs.
Pushing value is "critical" this year, says Don Hamblen, Sears's chief marketing officer. "Consumers are doing their homework, now more than ever."
The increased ad spending by retailers is a reversal. Even before last fall's economic turmoil struck, retailers had been cutting ad budgets. U.S. ad expenditures by retailers fell about 6% in 2008 to $17.2 billion, according to TNS.
But retailers are grabbing for slices of a pie that has shrunk. Holiday-season consumer spending this year is forecast to remain flat, according to both consulting firm Deloitte and research firm Retail Forward, although it's an improvement over the sales plunge in 2008. Deloitte expects holiday sales this year of $810 billion. In 2008, the research company says sales fell 2.4%, the first time sales have fallen since 1967.
Target declined to be specific about its spending plans. It said there is always a seasonal peak in its advertising and marketing during the holidays but that this year it will "exaggerate that trend."
Wal-Mart Stores, one of the few retailers that continued to increase marketing during the downturn, is also spending "significantly" more this holiday on advertising, according to a person familiar with the matter. Wal-Mart declined to comment.
The world's largest retailer by revenue put its holiday push into full gear during last week's broadcast of the World Series by airing a spot called "Christmas Wish." The commercial, crafted by Interpublic Group's Martin agency, featured U.S. servicemen in the desert, stunned as it begins to snow. The scene switches to a little boy visiting a department store Santa to ask him for a present for his dad.
Even companies that are keeping ad spending flat with last year say the consumer will see an uptick in ads nonetheless, because prices for ad time and space across all media have fallen significantly this year, giving them more bang for the buck. Wal-Mart has previously said that it has been benefiting from media price deflation.
Best Buy's chief marketing officer, Barry Judge, says, "there are many low-cost advertising alternatives." Best Buy, whose ads begin Dec. 12, will use its blue-shirted store employees as Christmas carolers in TV ads. featuring such items as electronic chess games. But the electronics retailer's "Twelpforce"—a Twitter-based tech-support service—will also make use of 'tweets" and Facebook for marketing.
While each company will have a different marketing approach, they all have one thing in common: touting value. Consumers have gotten used to the deep discounts stores resorted to during the recession.
"Frugal is the new cool," says Bob Thacker, the senior vice president for advertising and marketing at OfficeMax. "Consumers may see as many Ebenezer Scrooges in ads this year as they see Santa Clauses."
OfficeMax's holiday push begins Tuesday with a plug for "Dazzling Deals" and includes the company's popular holiday gimmick "Elf Yourself," an online stunt that allows consumers to turn themselves or someone else into an animated elf that can then be sent to friends.
Sears is hawking "More Value, More Christmas" in its ads. One commercial, which begins airing this week, features Santa and his reindeer shopping in Sears and using the Sears Research Center to find the best prices on big-screen TVs.
Pushing value is "critical" this year, says Don Hamblen, Sears's chief marketing officer. "Consumers are doing their homework, now more than ever."
