Students are ardently working on homework assignments and parents are still getting used to packing lunches. Which also means no more back to school ads — at least until next July.
Every year, back to school advertising takes over the retail advertising market — the campaigns make up over a third of retail advertising in July. It is also typically dominated by just a handful of key players. Just eight companies make up most ad spend for back to school campaigns. In order, they are: Target, Walmart, Amazon, Macy’s, Kohl’s, JCPenney, Best Buy and Ikea.
This year was no exception to the domination in the market, but back to school advertising saw an overall reduction in spend across digital, print and TV media.
Taken altogether, these eight companies reduced their 2019 ad spend by almost 20 percent when compared to 2018. The more detailed picture is slightly more complicated:
- Three of the eight companies actually increased their spend across digital, print and TV formats: Best Buy, Amazon, and JCPenney.
- Macy’s and Kohl’s accounted for most of the reduction in ad spend, as they have taken hits on the financial markets in recent months. Both retail brands cut their ad spend by almost half year-over-year.
- When removing Macy’s and Kohl’s from the equation, overall ad spend for back to school campaigns was down just 8 percent.
There was one ad format that saw a YoY increase in spending for 2019: television. Taken as a whole, the top eight companies increased TV ad spend by 6 percent in July. Unsurprisingly, Amazon increased its TV ad investment the most (with a 44 percent increase) while Walmart decreased their spend the most (with a 21 percent decrease).
Placing back to school advertising in July is no accident. These campaigns are “well-timed,” writes Adrianne Pasquarelli at AdAge. “With 48 hours of Amazon Prime Day, the Seattle e-commerce giant’s annual shopping holiday, starting Monday, bargain-hungry consumers may be poised to start spending—whether on school products and apparel or other promotions.”
Such is the cycle, priming consumers for live sports events and TV debuts in the Fall.
The overall decrease in ad spend may be due to brick and mortar retail’s clunky conversion to eCommerce and a focus on digital campaigns (which require less capital to begin with). Macy’s, for example, may be facing some challenges but could also be shifting its spend to digital channels. Referring to MediaRadar’s report, Robert Williams at Marketing Dive points out that Macy’s both debuted Snapchat’s first shoppable ads and ran a viral campaign on TikTok.
Supporting this notion is the fact that Macy’s spending on digital native ads more than quadrupled in the first half of 2019, accounting for nearly 10 percent of total spend. Since native ads are known for their efficacy (and generally less expensive than TV spots), the retailer could be shifting to what it sees as a more efficient model.
The retailer may have been able to “optimize its spend by shifting more of its exposure to digital, where there are typically greater cost efficiencies compared to TV and where younger consumers are spending more of their viewing time,” Williams concludes.
No matter why the numbers are down across the board, back to school will undoubtedly remain an important advertising season. The bigger question is which retailers will be able to dominate next year.