It’s no coincidence that several of Britain’s biggest supermarkets have significantly reduced media advertising expenditure in recent months. According to figures from Nielson, Morrisons' media spend is down -33% for the first half of the year, closely followed by Tesco's at -31%, Asda's at -15% and Sainsbury’s at -4%. The downturn in media spend of some of the UK’s biggest retailers is a reflection of wider changes in the way that consumers are choosing to receive information.
The phenomenon isn't just confined to the UK. As a report by eMarketer suggests, average total ad spend growth has slowed across the world, largely due to lower-than-expected spending on advertising in North America, Latin America and Western Europe. The total global ad spend is forecast to reach $569.65 billion in 2015, significantly less than the $577.79 billion forecast in March this year.
The downturn in spending on traditional advertising media, such as TV and newspapers, has of course been widely attributed to the rise of digital marketing. Not only are increasing numbers of people turning to digital and mobile platforms to consume media, but the innovations in tracking, measurement and targeting that recent years have brought now enable brands to capture data about campaign performance and customer behavior much more easily.
As Nathalie Tadena, advertising and marketing reporter for the Wall Street Journal, writes: "Whilst television offers brands massive reach, online media promises to help marketers reach target audiences more cost-efficiently."
Attempting to recover from a disastrous first half of 2015, which saw Morrisons' profits fall by 47%, the supermarket is trying to sideline high-profile advertising campaigns in favor of concentrating on in-store improvements. As David Potts, Morrisons' new Chief Executive, told Marketing Week: "Improving the shopping experience is more important than advertising."
This approach echoes Tesco’s new CMO Michelle McEttrick’s insight that: "You can’t advertise your way out of problems you’ve behaved your way into". Subsequently Tesco, like Morrisons, is adopting a "back to basics" approach to getting the in-store experience right.
The lesson is clear: structural change within the retail market, the rise of targeted digital marketing, and the decline of newspaper readership and TV cut-through is meaning that retailers are being forced to focus on improving the in-store experience (and optimizing their ecommerce offering) to remain competitive. To find out how censhare is helping big brands to deliver an exceptional customer experience across multiple channels and touch points, explore our range of optimization solutions, including Multichannel Campaign Management.