US Insights

Retailers slash early holiday advertising

Ross Tucker

Executive Editor Kantar US Insights

Retail 12.19.2016 / 13:00


The nation's biggest retailers drastically pulled back on advertising during the first half of the holiday season.

The biggest retailers in America made massive cutbacks in advertising during the first half of the holiday season.

Retailers spent $1.08 billion on TV, newspapers, radio and digital display ads between Nov. 21 and Dec. 11, according the latest data from Kantar Media. This represented a 13% decline over the same period a year ago, with the steepest declines coming from electronics, discount and department stores.

However, much of the decline is attributable to retailers shifting away from newspaper print ads. When excluding newspaper, overall retail ad spending only fell by 3% to $945 million.

The shift away from newspaper ads has grown as retailers increasingly focus on mobile search and development of proprietary shopping apps. Retailers are also increasingly tapping social media channels in order to form stronger, more direct bonds with consumers.

“These tools fit well with the 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,” noted Kantar Media’s report.

JCPenney was the only retailer that spent more on advertising this year as it tried to keep its holiday sales streak alive. During the 2015-2016 holiday season Penney managed to report a 3.9% increase in comparable-store sales, while Macy’s fell 5.2% during the same period. This year Penney launched dedicated Black Friday and Cyber Monday campaigns to tout their deals. The promotions continued beyond the Black Friday weekend, and have included a shift towards price matching.

Amazon’s spending was flat, buoyed by increased marketing around its Amazon Echo products. The biggest cuts came from Macy’s and Best Buy.

The sporting goods, home and building, and toys retail segments were the only segments that had increased advertising during the period (excluding newspapers). Electronics showed the greatest pullback, with a 26% decline to $22 million excluding newspapers.

Source: Kantar Media

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