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Analysis: Walmart had best return on Black Friday weekend ad spend


by Jon Swallen, CRO, Kantar Media

Among brick-and-mortar retailers, Black Friday sales promotions remain a popular tactic for drawing customers into stores and combatting the shift toward online commerce. Retailers spent millions of dollars on advertising in the run-up to Black Friday 2014 hoping to persuade shoppers to spend money at their cash registers during the big holiday weekend. And though Thanksgiving weekend performance is an uncertain predictor of the total holiday season, it is a widely followed scoreboard. Which retail advertisers got a strong ROI this year in the form of customer traffic and which ones lagged?

To answer this question, Kantar Media and location-driven insights specialist Placed Inc. merged their respective data on advertising expenditures and in-store visitor counts to calculate a ratio of ad spend versus share of visitors. The metric has been used to evaluate and compare the results achieved by top national retail chains over the four-day Thanksgiving weekend and provide insights on how offline advertising helps drive in-store customer traffic during a critical promotional period.

In the fierce competition among department stores and mass merchandisers, Walmart effectively leveraged its enormous scale to both outspend and outdraw each of its major rivals. The company pumped $70.7 million into TV advertising and earned a 38% share of store visitor traffic, the highest incidence for any retailer. As a result Walmart had the lowest visitor acquisition cost by far in this analysis, spending $1.9 million per share point- slightly less strong than the $1.7 million per share point it spent last year, but a great result compared to the competition.

Target came close to matching Walmart’s TV ad budget by spending $61.6 million – more than double what it spent last year - but only drew about one-third as many shoppers (a 13.2% share), yielding a rate of $4.7 million per share point. This was second best in the segment but only the fifth best ratio among all twelve retailers examined, and significantly less efficient than the $2.4 million per share point it achieved in 2013.

In one regard Target had a better relative result than Walmart over Thanksgiving weekend: Compared to the same four days from the prior week (November 20-23), Target’s share of customer traffic increased from 10.8% to 13.2%. The comparable figures for Walmart were 37.4 and 38% an uptick of just 0.6 points. This may be due to Walmart’s greater focus on driving sales throughout the entire month of November, through releasing many special offers starting on November 1 and offering “Black Friday”-type deals online as of November 3.

At the other end of the scale, Macy’s spent $10.5 million per visitor share point, more than five times greater than Walmart. The mass merchandisers in our study – Walmart, Target, Kmart – each had lower costs per visitor than the full line department store brands.

Among the big box home improvement stores, Home Depot bested Lowes on each of the critical measures. It won the period on TV ad spend ($25.1 million vs. $20.2 million), foot traffic (6.9 percent vs. 5.1 percent) and acquisition cost ($3.6 million vs. $4.0 million).

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