Christmas cheer was in short supply at Marks & Spencer last month.
Having endured a share price slump, the retail giant’s sales in the
run-up to the festive period fell 15 per cent compared with 1998 -
marking the worst performance for 20 years.
Clothing sales remain depressed despite recent price discounting, and it
is not yet clear whether an increase in marketing spend - the retailer
advertised a post-Christmas sale for only the second time ever - will
turn things around in time for the formal release of its trading
M&S has already spent more than pounds 35 million on core advertising in
the year to November 1999, and the extra pounds 9 million it announced
it was spending in December makes it one of the UK’s largest
Financial services accounts for almost half of this activity, with a
spend of over pounds 10 million on direct mail and pounds 5 million on
press and inserts.
The successful financial services division advertises everything from
personal loans and life insurance to investment products, and accounts
for a growing proportion of the retailer’s profits.
M&S’s mid-market focus is reflected in its retail direct mail
advertising, where 60 per cent of mailings are aimed at 35- to
54-year-olds, and 40 per cent at the ’Suburban Semis’ and ’Mortgaged
Families’ Mosaic groups. Also, 70 per cent is sent to existing customers
- which is unsurprising given M&S’s Chargecard customer base - but it
sends out a lower proportion of acquisition mailings than rival
The retail division pours most of its advertising budget into a mix of
press, outdoor and TV, particularly when it publicised the
post-Christmas sale. However, it has upped its spend on retail direct
mail significantly in 1999 to more than twice the 1998 level. This has
been a result of bringing all its products together in one mail-order
catalogue, which was promoted extensively in 1999.
Overall, M&S spends 43 per cent of its advertising budget on direct
mail, 14 per cent on outdoor, 34 per cent on press, 5 per cent on radio
and 4 per cent on TV.
Newspapers that picked up M&S ads include the Daily Mail, The Daily
Telegraph, the Evening Standard, The Express, The Independent and The
Guardian. Regional newspapers also picked up a big chunk of the pounds
12 million press spend with titles such as the Birmingham Post, the
Belfast Telegraph and the Leicester Mercury carrying a range of ads. The
magazine mix included Best, OK!, TV Times, Radio Times, Wedding & Home
and Woman’s Own.
What of the future for M&S? In order to boost City confidence, higher
advertising spend and radical product and price revisions seem
Increased spend on TV advertising is also likely as the retailer
embraces the medium for its financial services products and to promote
its sales effectively.
Research by AC Neilsen MMS, tel: 01344-627553 www.mediamonitoring.com.