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 analyzed 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.

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.

Target Cartwheel 

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 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.)

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.

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.

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.

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.

Macys IG 

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 to hammer home the “on sale” message theme, letting consumers know that it is the retail destination for the best deals and biggest sales.

JCP BF

JCP CM

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.

JCP Products 

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 – and find new ways to stand out from the pack. Kantar Media will continue to monitor Winter Holiday advertising throughout the end of the year, so keep visiting kantarmedia.com to see our latest insights.



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