In a year that has experienced a pandemic, political turmoil and unprecedented forest fires, it can seem that nothing is left unchanged – including the winter holidays. Consumers may be looking forward to taking a break at the end of such a difficult year, but with COVID case levels well above past highs, many states retreating back into lockdown and unemployment still significant, it’s unclear how much cheer will be found.
This deep feeling uncertainty has found its way into holiday spending forecasts. Forrester is predicting a 1.5% revenue increase over last year, while MasterCard expects a 2.4% increase – well below 2019’s increase of 4.1% but much better than the -3.5% slump seen during the height of the Great Recession in 2008. To gauge where advertising is going to shake out, Kantar has done an analysis of national TV advertising by ten leading retailers, including Amazon, Target and Walmart. Consistent with results throughout the rest of the year, spend is definitely down compared to 2019 – and also different.
Lower spending, early start
Kantar has found that that national advertising by our ten key retailers reached $538.6 million for the ten broadcast weeks that span the beginning of October through to the week of Cyber Monday – a significant 24% decline over 2019. (Previously Kantar had found that overall advertising was down by 19% for the first half of 2020). This spend roughly paralleled traditional patterns of a slow build in October followed by a peak on the week of Thanksgiving and Black Friday, with a few notable exceptions.
The first week of November usually marks the true beginning of the holiday advertising season. Advertising did increase somewhat but was a steep 44% below 2019, likely due to advertisers staying clear of the airwaves during a tumultuous Election Day week. After this, ad spend roughly followed traditional patterns by rising through to Thanksgiving week followed by a slight decline during Cyber Monday week – however, spend was consistently 20-30% below last year’s levels.
Walmart continues to invest in Walmart+
When viewed by advertiser, Amazon and the now bankrupt JCPenney cut back the most, with Amazon alone, accounting for a $62 million reduction in TV spend during this period. Amazon has been anxious to avoid a repeat of the shipping delays seen during the first wave of the pandemic and focused much of its advertising around its Prime Days in October, when there is less competition.
Macy's and Kohl's both made steep cuts in the range of 30% - not surprising since department stores have been hit by store closures and the weak economy. Meanwhile, Home Depot and Lowe’s took different paths. Both companies have seen revenue spike by double digits as consumers took on “pandecorating” in droves. Home Depot executives have stated that even though they were usually allowed to remain open, they have struggled with whether it is sensitive or safe to encourage consumers to go to stores, and this is likely reflected in their reduced budget. Meanwhile, Lowe’s has long been the #2 in the home improvement space and may be looking to maximize share of wallet by maintaining their normal levels of spend.
Walmart is the only retailer on our list that actually increased spend. However, many of these ads were not devoted to the holiday. Instead, the company was promoting its Prime competitor, Walmart+, which launched in early September. For winter holiday theme ads, Walmart cut advertising by 42% compared to 2019.
Black Friday hangs on
Retailers have increasingly been backing away from the pandemonium caused by Black Friday, and the trend accelerated this year with all of the stores on our list closed for Thanksgiving day. Still, Black Friday advertising continued to hang on. Ads specifically referencing Black Friday fell by only 14%, less than the overall decline and far less than the 35% seen for Cyber Monday. Increasingly Black Friday has become retailer shorthand for “best deals of the year,” and indeed companies like Target began running “Black Friday Now” ads in early November, promising new deals every week throughout the month.