At Dallas Confab, Advice on Keeping Retail Ad Dollars

By: Jennifer Saba Carey Watson, who recently retied as senior vice president, marketing, at Burdine?s-Macy?s, delivered a strong message about retail advertising to executives during a panel session at NAA's Newspapers ?05 conference in Dallas this morning. Watson, now a consultant to Federated, explained why newspapers are losing retail advertising dollars and what they can do to stanch the bleeding.

Department stores are shifting focus, Watson said, and they expect newspapers to keep up. Macy?s is now aiming to for the core customer -- someone who is more interested in fashion than about price points. As such, the retailer is investing some 20% of its overall spend on apparel specific only to Macy?s. ?There?s going to be a shift from promotional spending to brand building,? Watson said, adding that Macy?s is going to move away from price promotions -- the one-day sale ad -- and more towards branding campaigns. ?Newspapers are not the first place we think about when it comes to brand advertising,? he said.

Of course, department stores still pump billions of dollars into newspaper advertising. Speaker Kip Cassino, president of Ad Audit Services, said that in 2004 department stores spent roughly one out of four ad dollars on newspapers -- which means newspapers received $5.1 billion out of a $23.3 billion total spend. In 2009, it?s projected that department stores will spend $29 billion on advertising but only $2.7 billion is expected to go to newspapers.

Watson suggested a number of ways that newspapers can increase their likelihood of gaining ad dollars from retailers. For starters, newspapers have to become more sophisticated about analyzing return on investment. ?With direct mail, it?s very easy,? he said about measuring the effectiveness of a campaign. Retailers want to know the data before the media run and after an ad has been placed.

Newspapers also need to address the ?bad perceptions out there? about the medium, including the fact it?s been branded as an ineffective way to reach young consumers, Watson said. He said he agrees with the conventional wisdom about young consumers, but he also conceded he might be wrong. His point: newspapers aren?t fighting to prove otherwise.

Perhaps the most important strategy that newspapers can employ is being proactive with fresh ways to reach the consumer. It could be a promotion around a holiday or a season or specific store event. ?Frankly we have less time to drive new ideas,? Watson said, which gives newspapers the opportunity to step in. ?There?s always money and time for a good idea.?