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High street retailers cut back on Christmas advert spending

Published on: November 8th, 2018

“Uncertain economic environment” has lead to decrease in TV advertising, reports The Guardian. 

High street retailers are rolling back on the traditional festive season TV advertising bonanza, with ITV saying it is braced for a fall in advertising spending of up to 8% in December.

Shares in the UK’s biggest commercial free-to-air broadcaster, which accounts for about half the £4.5bn UK TV ad market, tumbled more than 5% as investors were chagrined by the surprise announcement of a bleak Christmas.

ITV said that total advertising – which includes TV advertising and sponsorship on ITV, ITV2, ITV3 and ITV4 as well as from its online service ITV Hub – is forecast to fall by about 3% in the fourth quarter.

The broadcaster said ad income fell 3% in October but will rise 2% in November, thanks to advertisers spending big to lure consumers to take part in the annual Black Friday sales. However, December will see a significant fall in spending, down a predicted 6% to 8%, indicative of a pull back in how heavily advertisers are spending on traditional Christmas TV campaigns.

Christmas stalwarts including Marks & Spencer and John Lewis are yet to launch their traditionally heartwarming campaigns. However, brands including Aldi, Tesco and Argos have already kicked-off the festive battle.

Carolyn McCall, ITV’s chief executive, pointed the finger at the uncertainty of Brexit. “We are seeing some softening in [TV advertising] due to the increasingly uncertain economic environment and as a result we expect total advertising to be down,” she said.

While ITV would not comment on the specific brands or categories that are rolling back their Christmas ad spend, media sources say that it is a mixed picture.

For example, while many traditional high street retailers are understood to be reducing advertising spend, online retailers continue to increase TV budgets. So too with supermarkets, where market challengers such as Aldi and Lidl are increasing spend while more established players such as Sainsbury’s have cut budgets.

There has also been a reduction in spend in what is known as the fast-moving consumer good category, dominated by players such as Pampers and Gillette owner Procter & Gamble and Marmite and PG Tips owner Unilever.

ITV said that while traditional TV advertising had softened its online business, ads running on the ITV Hub streaming service have grown 43% in the first nine months this year. ITV said that it expects its total advertising income for the full year to be flat compared to 2017.

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