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Winter Holiday Halftime: A Shifting Media Mix
Shoppers spend big during the winter holiday season – and advertisers do too. In particular,
retailers focus a significant amount of spend during the critical holiday shopping period that
extends from Black Friday to Christmas, hoping to drive more foot traffic and clicks their way
so they can maximize their share of shoppers’ wallets. Accordingly, Kantar Media has
analysed results from the first three weeks of the 2016 shopping season, from Thanksgiving
week through to December 11. Looking across traditional and digital media, earned social
and paid search, we have found further continued shifts in media strategies that have led to
a significant decline in measured media spend.
From print to mobile
During the Nov. 21-Dec. 11 period, retailers spent $1.076 billion on TV, newspapers, radio
and digital display ads – a significant 13% decline over last year. (This data is based on a
limited number of media where preliminary spend is available, and when all media are
subsequently included the year-over-year comparison will likely be more favorable.) Home
retailers were the only group that spent more. This category includes a large number of
home furnishing stores who are increasingly important gift providers, and may also be trying
to capitalize on some upticks in home sales seen this year.
Meanwhile, the electronics and discount and department store categories have seen the
steepest decline, falling by 32% and 25% compared to 2015 respectively. This is due in part
to these groups shifting away spend from newspaper print ads. (Newspaper brands do of
course maintain websites as well; those ads would be tracked in our display ad channel.)
While circulars and printed ads had traditionally played a large role in retailers’ holiday
marketing efforts, that approach is clearly less popular. Indeed, when excluding newspapers,
overall retailer ad spend actually only fell by 3%. Still, the electronics category still saw a
steep 26% drop, due to significantly less spending by Best Buy.
Retail Media Spend by Category, Nov. 21-Dec. 11
Including Newspapers Excluding Newspapers
Retail Segment
Nov 21-Dec 11, 2016 (millions)
% Change: '16 vs '15
Nov 21-Dec 11, 2016 (millions)
% Change: '16 vs '15
Total Retail Category $1,076 -13% $945 -3%
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Discount & Dept. Stores $283 -25% $262 -12% Home & Building $258 4% $213 10% Apparel $219 -7% $204 -5% Food & Drug $86 -16% $70 -1% Electronics $33 -32% $22 -26% Sporting Goods $39 -8% $33 12% Toys/Hobbies/Crafts $28 -8% $23 8% All Other $130 -10% $118 -2%
Source: Kantar MediaPreliminary spend figures for TV, Local Radio, Newspapers, Internet Display
So what is replacing print in the winter holiday media mix? Product listing ads (PLAs) – the
paid search ads that feature product photos and pricing – are clearly one factor. According to
our paid search intelligence expert AdGooroo, spend on PLAs regarding the top 2,500 retail
keywords more than doubled year-over year during the Nov. 21-Dec. 11 period. However,
overall desktop paid search (including text ads as well as PLAs) fell by approximately 16%,
likely due to greater use of mobile search.
Mobile search and the use of shopping and couponing apps like Target’s Cartwheel do seem
to be gaining significant traction, and impacting ad spend through more traditional channels.
These tools fit well with on-the-go consumers’ shopping behavior, and provide the same
ability to highlight local offers and focus in on specific products that local print advertising
delivers. Meanwhile, retailers have a strong incentive to get shoppers to depend on their
proprietary shopping apps. Target, for one, offered special savings on top of the retailer FSI
promotions it offered with brands like P&G and Nestle Purina.
Social media is also an important part of the mix, with leading retailers using a mix of
platforms to build deeper relationships with consumers. During the three-week period we
studied, Unmetric found that a selection of the nine largest retailers posted thousands of
times on Twitter, Instagram and Facebook, with the bulk of activity occurring on Twitter
(which is best suited to rapid-fire posts, often on a one-to-one basis with consumers). While
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volumes were lowest on Instagram, this highly visual platform led by far in engagement. (The
engagement metric weights user interactions based on their importance. The weighted sum
of interactions is then divided by the estimated number of brand fans or followers who
received the content. This value is fit to an index scale of 0 to 1000 where a higher number
indicates higher engagement.)
Social media activity for leading retailers - 11/21/16-12/11/16
Instagram # posts
Instagram Engagement
Twitter # posts
Twitter Engagement
Facebook # posts
Facebook Engagement
Total 170 211 14,831
17 240 117Source: Unmetric; retailers include Amazon, Best Buy, JC Penney, Kmart, Kohl’s Macy’s, Sears, Target and
Walmart
Leading retailers shift their strategies
So how are these trends impacting leading retail advertisers? Consistent with overall trends,
spend is down overall – but individual advertisers are clearly taking different paths. JC
Penney was the only retailer to actually spend more than last year, perhaps taking
advantage of a less cluttered environment to try to make a bigger splash. Meanwhile,
Amazon’s spend was flat, due in part to some aggressive marketing efforts for its new
Amazon Echo products.
By comparison, the deepest cuts were made by Macy’s and Best Buy. Macy’s had been one
of the largest spenders on print and cutbacks in that channel definitely impacted its overall
spend. Indeed, its 37% reduction in spend roughly correlated to the amount it spent in print
in 2015. Meanwhile, Best Buy is now deep into its “Renew Blue” campaign which has
included extensive cost cutting as well as a major focus on mobile marketing as a more
efficient channel for driving sales.
AdvertiserNov 21-Dec 11, 2016 (millions)
% Change: '16 vs '15
Walmart $71 -27% Amazon* $60 -1% Target $53 -5% Macys $45 -37% JC Penney $29 5% Kohl’s $28 -28% Home Depot $17 -23%
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Lowes $17 -21% Kmart $12 -14% Sears $13 -26% Best Buy $8 -56%
Source: Kantar Media
Preliminary spend figures for TV, Local Radio, Newspapers, Internet Display
Walmart and Amazon exclude self-promotion
From a paid search perspective, Amazon is clearly prioritizing text ads, with a leading 8.2%
click share in U.S. Google desktop text ads for 2500 popular retail product keywords during
our studied period. Macy’s and JC Penney ranked second and third for click share with 5.8%
and 4.3% respectively, again demonstrating JC Penney’s strong competitive push this
holiday season.
Meanwhile, Walmart and Best Buy clearly chose to concentrate their efforts on PLAs, where
Walmart led the pack with an 8.1% click share with Best Buy in second place at 6.1%. While
Macys and JC Penney still placed in the top 10 for click share, their click shares were
noticeably less than for text ads.
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On the social front, leading retailers again focused on different channels. Walmart posted an
astounding 7,457 times during our studied period, but this activity was due in part to
customer service responses to its large volume of shoppers. Amazon led Facebook with 100
posts over three weeks and also was quite active on Twitter, although it was surpassed in
both this channel and Instagram by Macy’s. Meanwhile, JC Penney and Best Buy had
surprisingly low levels of activity. Given JC Penney’s aggressive push this year social media
would seem to be an ideal way to reinforce its efforts, while Twitter would seem to be an
important way for Best Buy to connect with its tech-savvy, highly mobile audience.
Social media activity - 11/21/16-12/11/16
Instagram Volume
Instagram Engagement
Twitter Volume
Twitter Engagement
Facebook Volume
Facebook Engagement
Amazon.com 38 174 1148 15 100 69Best Buy 5 177 172 64 19 38JC Penney 14 235 534 18 24 232Kmart 9 129 104 14 8 40Kohl's 24 393 2359 5 11 239Macy's 55 280 1981 12 50 178Sears 10 126 39 19 3 160Target 4 310 1037 3 10 71Walmart 11 71 7457 1 15 26
Total: 170 Average: 211Total: 14831
Average: 17 Total: 240
Average: 117
Source: Unmetric
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Some of these differences are likely due to the individual strengths of the different social
channels. For example, Instagram was well suited to the softer branding approach used by
Macy’s, which offers a higher-end product mix than JC Penney. It posted 55 times using a
mix of festive photos and videos, receiving a peak engagement score of 741 for an image of
the iconic Rockefeller Center Christmas tree in NYC.
JC Penney: Getting their Penney’s worth
So what’s motivating JC Penney’s increase in ad spend – in marked contrast to the
competition? Last year, JC Penney reported a 3.9% increase in sales during the crucial
holiday season. In contrast, holiday sales from Macy’s fell 5.2% during the same time period.
Falling sales were partially blamed on an unseasonably warm winter, however JC Penney
faced the same conditions suggesting the retailer was starting to make a comeback with
increased market share after a failed attempt at trying to reinvent itself with a new strategy in
2011.
This year JC Penney is trying to keep the momentum going with some small but noticeable
increases in media buys. While its ad spending still doesn’t compare to that of some of the
bigger players like Walmart or Target, JC Penney is coming one step closer to closing the
gap in expenditures – particularly given the fairly significant cuts from some of those
retailers.
With competitors pulling back on spend, JC Penney is taking the opportunity to stand out
from the clutter. The retailer has used dedicated Black Friday and Cyber Monday campaigns
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to hammer home the “on sale” message theme, letting consumers know that it is the retail
destination for the best deals and biggest sales.
TV Online Display Facebook
TV Online Display Facebook
Winter holiday promotion continued heavily after the Black Friday weekend, however JC
Penney has been withdrawing some of its “sales” messages. Instead the retailer has been
marketing its price match offers on television, while using internet display to promote specific
brands like IZOD, Dockers and Ashley Nell Tipton a collection carried exclusively at JC
Penney.
Don’t let the declines in spend fool you: Winter Holiday remains a highly competitive period,
and one that all retailers are desperate to win. However, the growth of new channels for
shopping and marketing is giving them the opportunity to experiment with new approaches –
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