A total of $18.2 billion will be spent by retailers on holiday advertising this year, according to BIA’s U.S. Local Advertising Forecast. That includes $8.7 billion invested by larger retail outlets, such as clothing stores, department stores, and home centers, and an additional $9.5 billion by specialty stores, including electronics, furniture, jewelry and sporting goods retailers.
Radio will capture 6.5% of the holiday retail ad pie, putting its share of wallet close to that of television (6.8%).
“Radio’s over the air share is consistent for both the larger retail stores and the specialty stores,” said Mark Dugan, Director of Data Insights, and Client Relations at BIA. “TV is used much more heavily by the specialty stores,” garnering a 9.9% share of ad spending among those retailers compared to 3.5% for the larger retail outlets, he added.
Speaking with BIA Senior Media Analyst Leyla Chatti on the Leading Local Insights Podcast, Dugan said radio and TV’s digital shares are “relatively small” in the holiday retail category but are on track to grow in the future. Together, radio and TV’s digital assets now account for over $200 million of holiday retail ad budgets.
With the holiday shopping season starting earlier than ever, all eyes are on retail stores and their outlook for ad spending. Among specific retail categories, clothing stores are expected to reduce their ad spend by about 1%. That follows a big boost for the clothing sector in 2021, when consumers began getting out more after the 2020 lockdowns and needed to update their wardrobes. “We may see a little larger decline with our next forecast,” Dugan said of the clothing vertical. Over the air TV is expected to see the biggest boost in clothing ad spend this year, on track to jump 5.5%. Other channels poised to see a more modest boost from clothing retailers are mostly digital, including mobile, PC or laptop, OTT and digital radio.
“Although spending for the year is down, there is reason for clothing stores to pick up their advertising this holiday season,” Dugan explained. “In times of economic uncertainty, clothing can become a gift that parents give to their kids during the holidays, when the non-essentials may be a little bit less affordable, or they cannot find them in the stores.”
Shoppers will also be looking for bargains during the holidays at warehouse clubs and super centers. Ad spending by warehouse clubs surged 35% year-over-year in 2022. That’s the largest increase of any of the categories included in BIA’s report. “These warehouse clubs have increased spending in almost every media channel we cover over last year,” Dugan said. Retail Advertising Spend for the 2022 Holiday: BIA’s Forecast shows over the air radio in line with the overall warehouse clubs trend, up 34% in 2022. “With these forecast increases, TV and radio could also be in an opportunity to see an increase in advertising spend this holiday season,” Dugan noted.
The local media financial firm is bullish on the jewelry category, which is a top five among gifts that consumers have on their holiday shopping lists. BIA forecasts a 5% ad spending increase in the vertical, which also includes luggage and leather goods stores. Radio ranks fourth among media channels for jeweler advertising and has increased slightly from last year. “With these increases, there's still an opportunity for TV and radio to target jewelry stores this holiday season,” Dugan suggests. “By incorporating the digital offers with their over the air, they can either find new dollars or prospective increases over last year.”
The report also underscores the appeal to advertisers of cross-platform ad campaigns. “Over the air has been bringing in incremental dollars for local and radio and TV sellers over the years,” Dugan points out. But by using radio and TVs digital offerings with their over the air, it's a great way for the local sellers to increase their shares not only this holiday season, but in the upcoming years.”