Retailers spend as big brands cut back

MEDIA & MARKETING:Television and radio suffered the biggest falls in rate card advertising spending, writes SIOBHÁN O'CONNELL

CONSUMER BRANDS reined in their advertising spend in 2009 but retailers ramped it up considerably, with SuperValu leading the charge.

According to data from Nielsen Media Research covering January to October 2009, rate card advertising spend by Ireland’s top 25 advertisers declined by 5.6 per cent to €284 million. The data ignores the discounts that different media offer.

SuperValu increased its spend by 19 per cent to €18 million. Dunnes Stores increased its spend by 10 per cent to €12 million while Tesco cut its spend by 22 per cent to €16 million. Lidl maintained its advertising spend at €7 million.

SuperValu marketing director Ray Kelly said: “Last year was very tough for all retailers. We spent more money on advertising and got better value and we will increase our ad spend again in 2010. History shows that companies which invest in marketing in downtimes benefit more when the upturn comes.”

The increased advertising spend last year delivered a market share of 20 per cent for SuperValu for the period November 2008 to November 2009, the same as a year before, according to research company TNS. The same report shows that Dunnes Stores’ and Tesco’s market share declined.

By far the largest decline was at Unilever, the consumer products giant, which cut its advertising spend from €28 million in 2008 to €19 million in 2009.

Procter Gamble reduced its spend in Ireland by 23 per cent to €16 million, Kelloggs cut by 20 per cent to €9 million and Reckitt Benckiser, whose brands include Dettol and Vanish, spent 22 per cent less. However, Johnson Johnson raised its spend marginally to €7.6 million.

The biggest cut was at Coca Cola, with its advertising spend falling 37 per cent to €7.6 million in 2009. Also cutting was L’Oreal, whose spend was down to €8 million from €11 million in 2008.

The other mainstay of Ireland’s advertising market is telecom companies. Ahead of the annual splurge at Christmas, Vodafone’s advertising spend was down 5 per cent, O2 was down 16 per cent and Meteor was down 24 per cent.

Bucking the trend was Eircom, up 9 per cent, and mobile network operator 3, up 8 per cent. BSkyB increased its spend by 18 per cent to €11 million. Ireland’s most aggressive advertiser in 2009 was Harvey Norman. The electrical goods and furniture retailer responded to substantial trading losses incurred in 2008 by increasing its spend from €6 million to €16.5 million.

Cuts in advertising budgets for consumer goods impacted on television and radio the most, as that is where most fast-moving consumer goods ad spend is directed. The rate card advertising spend on TV was down 29 per cent to €220 million while the spend on radio fell by 20 per cent to €100 million. Outdoor suffered a 13 per cent reversal to €95 million while the slippage in press media was limited to 10 per cent at €614 million. It’s harder to get a fix on how digital media performed as Nielsen did not report for digital in 2008. But notes Steve Baker, broadcast director in Initiative: “We would suspect that digital is the only medium in growth in 2009.”