Retailers: Holiday Advertising And Marketing Budgets Are Flat

CHICAGO–(BUSINESS WIRE)–According to a study conducted by BDO Seidman, LLP, one of the nations leading accounting and consulting organizations, more than half (55%) of retailers say that their 2009 advertising budget is flat this holiday season, up from 43 percent in 2008. Only 19 percent of retailers have increased their advertising budgets this year, while one-quarter (26%) of retailers cite budget reductions. Of the retailers who do not expect a turnaround until the third quarter of 2010 or later, 50 percent say their holiday marketing and advertising budget in 2009 is lower. The retailers who expect the turnaround to happen sooner, (second quarter of 2010 or earlier) 62 percent plan to keep those budgets about the same.

When it comes to advertising expenditures, a strong majority (64%) of the retailers will spend most of their holiday advertising and marketing budgets on print advertising, which is up from 57 percent in 2008. Interestingly, more than half (51%) of retailers are including social media in their marketing strategy this year a severe increase from only four percent in 2007.

Holiday advertising budgets are flat, but retailers are getting more bang for their buck due to significant price reductions for ad space across all media. said Steve Ferrara, a Partner in the Retail and Consumer Product Practice of BDO Seidman. With the recession still top-of-mind, we can expect advertisements that emphasize tradition and cheer, while also promoting discounts and value. Further, social media will play a bigger role this season as more retailers embrace online venues as a marketing platform. Considering the big jump in social media marketing from just two years ago, we can expect this trend to continue indefinitely.

These findings are from the most recent edition of The BDO Seidman Retail Compass Survey which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country regarding their expectations of the 2009 holiday shopping season. The retailers in the study were among the largest in the country, excluding automotive dealers and restaurants, with revenues of more than $100 million, including 20 percent of the top 100 based on annual sales revenue. The survey was conducted in October of 2009.

Some of the major findings of The BDO Seidman Retail Compass Survey of CMOs:

Retailers Friend Facebook. When it comes to social media, retailers are split. Fifty-one percent of retailers are including social networking in their market strategy. Of those who are taking their marketing online, a vast majority (76%) of retailers will focus on Facebook. Other social media outlets that retailers are focusing on include Twitter (50%), MySpace (14%) and YouTube (14%). Ten percent of the retailers will market on all of the outlets listed.

Green Marketing Slows for the Season. When it comes to eco-friendly initiatives, only 35 percent of retailers will increase their marketing push on green products this season, which is down from 43 percent last year and on par with 37 percent from 2007. More than half (65%) of the retailers will not be increasing their marketing investment on green products this holiday season.

Print Advertising is Greatest Investment. When asked which outlet they will invest in most heavily, a strong majority (64%) of the CMOs say print advertising. The remaining retailers will spend their dollars online (18%), broadcast (14%) and outdoor advertising (5%). Further, seventy-three percent of the retailers who expect comp store sales to increase are investing most heavily in print advertising.

The BDO Seidman Retail Compass Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation’s largest retailers (with revenues ranging from over $100 million to billions of dollars).

BDO Seidman, LLP has been a valued business advisor to retail and consumer products companies for almost 100 years. The firm works with a wide variety of retail clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on a myriad of accounting, tax and other financial issues.

Source: BDO Seidman, LLP