Holiday outlook:
A boost in ad spending
Strong retail spending will lift the ad economy
By Bill Cromwell
Nov 8, 2011
After a big slowdown in ad spending during second quarter of this year, it looks as though the media economy will be getting a retail-fueled bump to finish out the year.
Several ad categories stand to gain from what's expected to be a good, though not great, holiday spending season.
Those categories include spot television, which lagged during the first half of the year following a decline in automotive spending, as well as spot radio and internet, which has been strong all year long.
"I'd definitely say holiday spending is up," says Scott Kushner, vice president and associate media director for local broadcast and network radio at RJ Palmer in New York.
"I think it will be stronger than last year."
Advertisers tend to spend more in years when consumers are expected to spend more. The reasoning is that you don't want to spend on advertising unless you're convinced people will walk through your doors and buy your wares.
While this year won't match last year's 5.5 percent gain in holiday sales, it is expected to see moderately healthy gains.
The National Retail Federation projects that holiday sales will be up 2.8 percent, while Deloitte, the accounting and consulting firm, says that sales will rise 2.5 to 3 percent.
"We think it's basically keeping pace with inflation, so it's not a great increase over last year," says Jackie Fernandez, partner in the retail and distribution practice at Deloitte.
"The economy is tough and erratic, so as we head into holiday you look at the overall economic news."
Retailers are already spreading their Christmas messages. Kushner says that fourth quarter spot television sales are brisk, paced by retailers as well as some political ahead of the early 2012 presidential primaries.
Spot radio is also seeing some gains from retailers looking to hype their holiday sales, including a new phenomenon that's gaining popularity.
A number of stores, including Best Buy, Target and Macy's, are opening at midnight on Black Friday instead of early the next morning, hoping to lure in eager shoppers who traditionally line up for 5 a.m. Black Friday opening deals.
In fact, this year retailers have even offered Black Friday warm-up sales, like Wal-Mart's Super Saturday last weekend, which it heavily promoted on Facebook. It invited shoppers to enjoy free cupcakes while checking out discounted toys ahead of the traditional holiday shopping season.
Online spending will see the biggest spike this holiday, up double-digit percentages over last year, which should send ad web spending soaring as well, says Fernandez.
"If you look at retailers, a number of them now offer apps," Fernandez says.
"Even a catalog will come in the mail and it allows you to scan it with a cell phone. So retailers have had a brick and mortar and have had online, but they never really connected the two, but they're realizing it's a great new channel."
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