Holiday Advertising Outlook: Pretty Solid Outlook

Media Life/Media Economy
By Diego Vasquez
Oct 14, 2010

Retail sales are expected to be up 2.3 percent

The past two holiday seasons there's been a lot of modest gifts under people's trees if retail spending numbers are any indication. Two years ago, when the recession took hold in earnest, consumers slashed their holiday spending by 3.9 percent, and last year saw spending rise just 0.4 percent above the dismal 2008 level. But this year there could finally be some holiday cheer at the local mall. A new forecast from the National Retail Federation predicts that holiday spending will be up 2.3 percent over 2009 this year. The NRF is notoriously upbeat, but media buyers seem to agree: They think retail advertising will be up in fourth quarter, too, with advertisers anticipating more traffic to their stores. Those shoppers will still be looking for deals, so expect much of the advertising to relate to sales of some sort. Greg Clausen, executive vice president and chief media officer at Doner, talks to Media Life about mobile advertising, how political will affect retail spending, and what the hot categories will be.


The NRF says holiday spending will be up 2 percent this year over last. Will that encourage advertisers to spend more?

I think it will. I think there will be an increase in ad spending this year.

There are a lot of factors going into that, but based on fourth quarter media pricing we've seen, I think spending will be up more than that 2.3 percent, just because media pricing is so strong right now. A lot of advertisers, I think, are holding back spending until political is done, making for a narrower window.


Overall, do you think retail ad spending will be up this year over last?

I think it will be. I think fourth quarter will secure that because I think spending in fourth quarter will be up a pretty solid clip.


Do you think advertisers will be more wary or less wary of advertising during the holidays this year after the bad economic news over the summer?

I think there's two ways to think about it.

Advertisers have been wary for some time now. So any positive economic news will fuel them because they want to be optimistic. And I also think that they may want to take advantage of any post-election consumer optimism as well.

I think there will be a lot of activity and movement in the [political] offices that are being contested, and I think some residual optimism will come out of that. If advertisers see that, I think they'll try to capitalize on it.


Which retail categories do you expect to be the most active in terms of ad spending during the holiday season and why?

I think consumer electronics is probably going to lead. I think you'll see a lot of spending and interest in tablets like the iPad, and I think the iPhone will also fuel spending. Also, the e-readers have come into that set. And there are some innovations going on in gaming industry, such as with the PlayStation 3, so I think that will be a particularly strong category.


How will retail spending differ this year from last year -- do you see more of it going to the web, to spot television, etc?

I think it will remain heavy on TV. I think you'll probably see an increase on the web and I think there will be more mobile this year than you've seen in the past. Spending will be up by consumers, but I do think retailers are still going to have to offer value, so that's an opportunity to offer mobile messaging of special offers, etc.

There won't be unbridled optimism, so value will be very important.


Which media categories will benefit the most from holiday retail ad spending this year?

I think web and mobile. I also think TV will still benefit because at the end of the day if you're trying to drive awareness, having the visual element of television is still pretty critical. I think they'll do quite well in the fourth-quarter period.


Do you think the NRF is right, or do you see spending being up or down more or less than 2 percent?

I think spending will be up at higher rate than what the retail increases will be.

The NRF numbers seem a touch conservative, because we're not coming off a robust season last year.


How much of an impact does teen spending have on the holiday season, and do retail advertisers try to target them in any particular place?

Certainly teens have more disposable income today than they did five, 10 or 20 years ago, but it depends on the product category.

That's where I think consumer electronics comes into play, it's not just for the gift purchaser, but also for the gift requester. For the appropriate category it's certainly something that can be influential.