Retailers Allocating More Ad Money to TV

Forecasters have been predicting a strong year for TV. Consumers plan to watch the Olympics and the political debates and elections in large numbers and ad increases in those sectors have long been expected. But there’s another sector planning to increase TV ad spending this year – big retailers.

"TV is the king of media categories when it comes to branding," said Vincent Letang, global head of forecasts for Magnaglobal, a division of IPG Mediabrands. And retailers are determined to focus on branding and image as the economy improves. Part of the projected 6.8% rise in U.S. TV ad revenues will come from retailers this year. And, as media companies, know, retailers account for about 11% of ad spending so they'll be pursuing these clients.

Magnaglobal analysts say the following retailers have announced bigger TV campaigns:

  •  Estee Lauder: a 65% planned increase in TV ad spending to attract middle-​income shoppers to Clinique and Mac product lines
  •  Pepsico: The company will continue its battle to win market share from Coca-Cola
  •  J.C. Penney: The retailer is seeking to regain momentum as it remakes itself
  •  Barnes & Noble: The company hopes the expense of TV advertising will increase the number of consumers using the Nook and improve its position in the fight against Amazon

TV remains the largest element in the media mix for big retailers surveyed by KMPG and the National Retail Federation recently. These businesses may be feeling that TV is key to a quick rebranding. And what about all the focus on newer media formats? One industry expert,  Columbia University professor Michelle Greenwald, notes, “Social media is better for deals and promotions."

If that sentiment holds true, TV media companies may have a strong outlook for years to come.

[Source: Retail, consumer boosting U.S. TV ad spending in 2012. MagnaGlobal​.com. 13 Feb. 2012. Web. 2 Mar. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.