No Miracles on 34th Street | Adweek No Miracles on 34th Street | Adweek
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No Miracles on 34th Street

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With recent forecasts from three firms -- Retail Forward, Deloitte and Adweek parent Nielsen -- concluding that gift giving this year will roughly be on par with 2008, marketers, while relieved that purse strings are not getting tighter, are still holding back.

Continuing a yearlong trend, overall ad spending will go down in the fourth quarter, with measured media expenditures so far "tracking at a double-digit decline," according to Jon Swallen, svp of research at TNS Media Intelligence. (This is perhaps a little better than the 14 to 15 percent drop that occurred through the first three quarters of the year.)

Marketers also continue to shift money to newer channels -- particularly online social networks -- where consumers are devoting increasing amounts of their time, especially as they plan their holiday shopping strategies. This means budgets for traditional media, such as newspapers and magazines, remain prime targets for paring back.

But while overall ad spending is shrinking, some marketers are bucking the trend. Walmart, Sears and Kmart, for example, are among a handful of big retailers who launched holiday campaigns earlier than normal this year in a bid to get a jump on the competition. Others, such as the Gap and Best Buy, which had basically abandoned advertising last year when the financial crisis hit, are now aggressively back in the hunt for holiday shoppers.

And it's not just retailers who are spending more. Domestic auto advertising is up sharply in recent weeks, according to Swallen. This is due to early offers of end-of-year purchase incentives as both Ford and General Motors seek to maintain a slight up-tick in the rate of monthly car sales.

There may also be an increase in spending by higher-income earners for expensive electronic gadgets like smartphones and HDTV sets, said John Spiropoulos, svp, director of marketplace analytics at Publicis Groupe's MediaVest. He predicted, though, that spending by the broader middle-income sector would remain tepid.

A full recovery is still a ways off, but consumers and marketers are both in a better place attitudinally this year versus last, said Spiropoulos, when the economic meltdown caught just about everyone flatfooted.

"Last year there was a lot of fear and panic with the free fall in the economy. People weren't sure what to do," he said, noting that many marketers had to unravel plans and start from scratch in a hurry. "Now both sides are more prepared."

Mark Snyder, CMO at Kmart, agreed. Although the economy hit consumers "between the eyes" last year, he said, they are "definitely moving from defense to offense in holiday season 2009. [The customer] recognizes her full power as a shopper."

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