The Retail Industry Spent $1.8 Billion On Advertising In January And February

According to MediaRadar’s latest analysis, the retail industry spent $1.8 billion on advertising during January and February 2021, a 24 percent decline from the same period last year.

Between 2017 and 2020, ad spend decreased an average of 34 percent each year, a post-holiday phenomenon that marketers have come to expect. MediaRadar forecasts Q1 2021 retail ad spend will reach $2.73 billion, which represents a 33 percent dip in ad spend between Q4 2020 and Q1 2021.

With rising vaccine availability and declining COVID-19 rates in some parts of the world, the economy is slowly opening back up. This has prompted big-box stores like Target, Macy’s and Kohl’s to increase their spend month-over-month. In February, their spend comprised 70 percent of general retail and department store ad spend, reports MediaRadar.

The increased spend aligns with encouraging consumer sentiment about the future of in-person shopping. An Ad Age-Harris Poll found that 62 percent of consumers plan to shop in stores this spring at least once a week.

Retail and department stores overall are still recovering from the pandemic, as spend is down 26 percent year-over-ear (YoY), which marks the same level of recovery observed in Q4 of 2020.

Building on their positive momentum from the end of 2020, quick-service restaurants (QSRs) invested $500 million in ads in January and February. That’s a 33 percent decline YoY, but a marked improvement from 2020 when their spend was down as much as 65 percent, according to MediaRadar.

McDonald’s and Subway ran spots during the GRAMMY Awards show, while Jimmy John’s and Chipotle bought ad space in Super Bowl LVI.

Marketers are eager to recoup lost sales. The CMO Council’s latest survey revealed that 65 percent of global marketers plan to increase their ad spend. The BIA Advisory Services predicts that local retail advertising will grow YoY by 5.3 percent this year. Lastly, The National Retail Foundation expects retail sales to grow between 6.5 percent and 8.2 percent in 2021 to more than $4.33 trillion, the highest projected YoY growth in 17 years.