Commentary

Wha'ja Get For Your Ad Money? Visitor Share!

Kantar Media Ad Intelligence, and location-driven Placed, collaborated on an innovative analysis that merged their respective data on advertising expenditures and in-store visitor counts to provide an insightful metric, the “Cost Per Visitor Share,” for evaluating and comparing the results achieved by the top national retail chains over the entire four-day Thanksgiving weekend. This metric provides a new view into how well offline advertising helps drive in-store customer traffic, suggests the report.

Advertising is a critical component of retailers’ strategies for drawing customers during the competitive holiday shopping season. The battle for market share is tough enough, says the report, with brick-and-mortar stores battling online sellers who make it easy for shoppers to compare deals and avoid crowded stores. This year, there are the additional challenges of fewer shopping days in the peak Thanksgiving-to-Christmas sales periods and gloomy forecasts for consumer spending on gifts.

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Retailers spent millions on advertising in the run-up to this year’s Black Friday sales events, hoping to get shoppers to visit them first on the big holiday weekend. Relative to cost per visitor share, here’s the winners and losers in this slugfest. Major retailers got a strong return for their advertising investment in the form of customer traffic, but many lagged the pack.  

Cost Per Visitor Share (results for a select group of retailers)

Retail Segment/Retailer

TV Ad Spend in Millions: Nov 3- 27

% Share of Visitors to Top 50 Retailers: Nov 28 - Dec 1

Cost Per Visitor Share (in Millions)

Dept. Stores/Mass Merchandisers

Walmart

$57.0

34.0%

$1.7

Target

$28.0

11.9%

$2.4

Kmart

$13.0

2.8%

$4.6

Kohl’s

$19.0

3.5%

$5.4

JC Penney

$19.0

2.7%

$7.0

Macy's

$25.0

3.1%

$8.1

Sears Roebuck

$26.0

1.9%

$13.7

Home Improvement Stores

Home Depot

$16.0

5.6%

$2.9

Lowe’s

$17.0

4.2%

$4.0

Consumer Electronic Stores

Best Buy

$25.0

6.2%

$4.0

Radio Shack

$9.0

0.8%

$11.3

Sources: Kantar Media/Placed, November 2013

In the competition among department stores and mass merchandisers, Walmart invested more than twice as much in TV advertising as any of its rivals, but earned an enormous share of retail visitor traffic in return, says the report. Among the universe of people who visited a Top 50 retailer during the weekend, 34% patronized a Walmart location, the highest incidence for any retailer. As a result, Walmart had the lowest visitor acquisition cost in the survey, spending $1.7 million per share point.

However, to put Walmart’s 34% visitor rate in perspective, in the same four days from the prior week (November 21-24) it had just over a 30% share of all retail visitors nationwide. Against that benchmark, Walmart only got a 4 point share lift on Thanksgiving weekend, although against a much larger numerical base of total shoppers.

Target had the second best ratio of the retailers analyzed at $2.4 million per share point. The company spent $28.0 million on TV advertising leading up to the weekend and was a destination for 11.9% of the retail visitors. At the other end of the spectrum, Sears Roebuck spent $13.7 million per visitor share point, more than 8 times the rate that Walmart achieved.

Among the big box home improvement stores, Home Depot and Lowe’s spent nearly identical amounts on TV advertising leading up to Thanksgiving weekend, but Home Depot had a sizable advantage in visitors to its stores. As a result, it cost Home Depot $2.9 million per visitor share point (third lowest among the 11 retailers in this analysis) versus $4.0 million for Lowe’s, notes the report.

Consumer electronics are always a popular item on consumer’s shopping list for Black Friday deals, and this is reflected in the figures for Best Buy. It had a 6.2% share of visitors over the holiday weekend, third best among the Top 50 retailers. With a $25 million TV budget pre-Thanksgiving, Best Buy spent $4.0 million per share point. Radio Shack, with smaller stores and a less abundant selection of electronics products compared to Best Buy, spent $9.0 million on TV advertising and had a 0.8% share of total visitors, for an effective rate of $11.3 million per visitor share point.

Leading up to the biggest retail sales weekend of the year, the study also examined the ad messages within every network and cable TV spot aired by retailers and noted those with explicit themes tied to Black Friday. As expected, the proportion of their spending on ads with Black Friday messaging accelerated as the day drew closer. However, there were wide variations in timing and spending among individual retailers.

Black Friday Messaging As % Of All Network & Cable TV Spend

Retailer

Nov 10-16

Nov 17-23

Nov 24-27

Macy's

--

--

94%

Sears Roebuck

--

26%

93%

Walmart

3%

36%

91%

Kohl’s

--

--

74%

Radio Shack

--

--

65%

JC Penney

--

--

52%

Home Depot

32%

55%

40%

Lowes

--

--

18%

Kmart

--

1%

14%

Target

--

--

14%

Sources: Kantar Media/Placed, November 2013

Home Depot, Sears and Walmart each started Black Friday ad promotions further in advance than their competitors. By Sunday November 24, all of these retailers were promoting Black Friday sales events in their TV commercials. But in the four days preceding Thanksgiving, the proportion of TV spending mentioning Black Friday ranged from more than 90% at Macy’s, Sears and Walmart to less than 20% at Lowes, Kmart and Target.

With significant variations in how much they are spending as well as when they emphasize Black Friday in their ads, retailers are clearly using a variety of different strategies to appeal to holiday shoppers. However, the Cost per Visitor Share metric does provides one useful way to help retailers evaluate their strategies and help make their holidays profitable, concludes the report.

For this analysis, Kantar Media tabulated retailers’ ad spending on broadcast and cable TV for the period of November 3 – November 27 (the day before Thanksgiving) based on Kantar’s syndicated ad monitoring data. Meanwhile, Placed used its opt-in panel of smartphone-enabled consumers to track their locations and the retail stores they visited from Thanksgiving Day through the following Sunday. From this panel data, the Top 50 retail destinations were identified and the total number of unique visitors to these 50 stores was then used as the base for subsequent calculations.

For further information, please visit KantarMedia here.

 

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