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Target rivals Walmart in advertising efficiency

Target spent an estimated $28 million on advertising November 3-7, which netted it nearly 12% of retail traffic during Thanksgiving weekend, according to data released this week from Kantar Media Ad Intelligence and Placed.

The firms created an innovative analysis that merged their respective data on advertising expenditures and in-store visitor counts to provide a new metric called, “Cost Per Visitor Share Point,” to evaluate and compare results achieved by the top national retail chains throughout the four-day Thanksgiving weekend. The measurement shows Target’s cost per visitor share point was $2.4 million, second only to Walmart, which spent twice as much as Target during November to achieve a cost per visitor share point of $1.7 million.

To arrive at those numbers, Kantar Media tabulated retailers’ ad spending on broadcast and cable TV from November 3 through November 27. It then integrated that information with data Placed gathered from its opt-in panel of smartphone-enabled consumers and tracked their locations and the retail stores they visited from Thanksgiving Day through the following Sunday.

According to the firms, the heated competition among department stores and mass merchandisers saw Walmart spend more than twice as much in TV advertising as any of its rivals to earn an enormous share of total retail visitor traffic in return. Among all people who visited any retail store during the weekend, 34% patronized a Walmart location, the highest incidence for any retailer. As a result, Walmart had the lowest visitor acquisition cost in this survey, spending $1.7 million per share point. Meanwhile, Target had the second best ratio at $2.4 million per share point. The company spent $28 million on TV advertising leading up to the weekend and was a destination for 11.9% of all retail visitors.


Retail Segment/Retailer

TV Ad Spend in millions: Nov 3-27

% Share of All Retail Visitors: Nov 28 - Dec 1

Cost Per Visitor Share Point
(in millions)

Dept. Stores/Mass Mdsrs.
     
 
Walmart

$57.0

34.0%

$1.7
 
Target

$28.0

11.9%

$2.4
 
Kmart

$13.0

2.8%

$4.6
 
Kohls

$19.0

3.5%

$5.4
 
JC Penney

$19.0

2.7%

$7.0
 
Macy's

$25.0

3.1%

$8.1
 
Sears Roebuck

$26.0

1.9%

$13.7
 
 
     

Home Improvement Stores
     
 
Home Depot

$16.0

5.6%

$2.9
 
Lowes

$17.0

4.2%

$4.0
 
 
     

Consumer Electronic Stores
     
 
Best Buy

$25.0

6.2%

$4.0
 
Radio Shack

$9.0

0.8%

$11.3
         

Sources: Kantar Media; Placed
     

 

At the other end of the spectrum, was Sears, which spent $13.7 million per visitor share point, more than eight times the rate that Walmart achieved. Home Depot and Lowes spent nearly identical amounts on TV advertising leading up to Thanksgiving weekend, but Home Depot had a sizable advantage in visitors to its stores. As a result, it cost Home Depot $2.9 million per visitor share point versus $4 million for Lowes.

Consumer electronics are always a popular item on consumers’ shopping lists for Black Friday deals and this is reflected in the figures for Best Buy. It had a 6.2% share of all visitors throughout the holiday weekend, third best among all retailers nationwide. With a $25 million TV budget pre-Thanksgiving, Best Buy spent $4 million per share point. RadioShack, with smaller stores and a less abundant selection of electronics products compared to Best Buy, spent $9 million on TV advertising and had a 0.8% share of total visitors, for an effective rate of $11.3 million per visitor share point.

Home Depot, Sears and Walmart each started Black Friday ad promotions further in advance than competitors and by Sunday, November 24, each of these retailers were promoting Black Friday sales events in their TV commercials. But in the four days preceding Thanksgiving, the proportion of TV spending mentioning Black Friday ranged from more than 90% at Macy’s, Sears and Walmart to less than 20% at Lowes, Kmart and Target.