Newspapers Still #1 But Supermarkets Are Shifting Ad Budgets
By Aptaris / December 2015Insights
Getting the attention of the elusive consumer is a priority for supermarket retailers. But making advertising decisions is more complex than ever before because of the continuously evolving media landscape.
Should grocers increase advertising budgets? How about shifting ad dollars from newspaper, direct mail or TV to email, mobile and social? What are other food retailers doing?
Advertising Budget Allocation
When it comes to advertising budget and allocation, most supermarkets run multifaceted advertising programs using both traditional and digital media. Comparing 2015 with 2014 ad budgets, 62 percent of grocers said their ad spending will remain the same, while 24 percent will increase and 14 percent will decrease.
According to eMarketer, U.S. retail industry ad spending on paid digital media will reach $12.91 billion in 2015 and grow to $19.98 billion by 2019. In addition, retail is expected to remain the leader among industries when it comes to digital ad spending during this timeframe.
Supermarkets Spending More on Digital Ads
Supermarket retailers are following the same trend. Although newspaper ads have the largest share of total spending, there have been significant declines over the years. The same is true for direct and shared mail. Meanwhile, grocers are increasing budgets for websites and emails, social media and mobile ads.
Real Results from Digital Advertising
Since U.S. grocery sales are typically promotion-driven, digital marketing programs such as loyalty cards, e-coupons, social media, and mobile ads have had a major impact on brand loyalty and store sales.
Big Data analytics firm, Retail Solutions Inc. (RSI), advises when crafting a digital strategy to drive sales, it’s important to create content that spurs action from local shoppers.
In a Progressive Grocer article, RSI gives an example of the collaborations necessary for a successful new product launch. Manufacturers and grocers must use inventory, point-of-sale (POS) and product management systems to gain efficiencies across operations and the entire supply chain. Integrating the Big Data from the systems with marketing programs, supermarket retailers and the agencies supporting them are seeing new product sales increases of more than 10 percent.
The key is connecting store-level supply data – such as daily sales and inventory – to digital advertising strategy. Grocers will be better able to quantify the ROI of digital ad programs and achieve key business metrics, including:
- Raising sales levels while decreasing out-of-stocks and wasted ad spend
- Delivering ads to drive traffic to store locations and get the product on their shelves at the same time
- Gaining real time data to focus ads in neighborhoods around high-performing, shelf-ready stores
- Accessing valuable product launch insights such as halo effect, product cannibalization, and category lift
This valuable data informs new product launches, promotions and seasonal programs.
* The information in this article was gathered and analyzed as part of a study sponsored by Aptaris and Topco. You can obtain the full report at: GoAptaris.com/AdStudy2015