Tags: wal | mart | ad | spending

Wal-Mart Ups Ad Spending Hundreds of Millions

By Greg Brown   |   Monday, 23 Feb 2009 10:50 AM

Convention wisdom would have it that retailers — damaged by the consumer spending crash — would be rolling back on ad spending.

Not Wal-Mart. Traditionally tight-fisted on media buying, the world’s largest company instead raised its spending to go from ninth- to second-place behind Macy’s, reports AdAge.

Wal-Mart spending rose by 55.7 percent to $835 million over the past year. The increase in ad spend is still just 0.5 percent of Wal-Mart’s comparatively huge sales, and far less than the typical 4 percent or more done by competitor Target and No. 1 media buyer Macy’s.

Wal-Mart reported same-store sales up 3.3 percent for the fiscal year ending Jan. 31, compared to 1.4 percent a year ago. Profits rose 3 percent to $13.3 billion. Sales at U.S. stores, broken out, did nearly as well, up 2.8 percent on the year.

Ad spend tracks economic growth (and decline) closely. Swiss investment bank UBS sees overall ad spending falling 4.8 percent in 2008. In 2009, UBS expects ad spending to tumble another 11.6 percent, in part due to a lack of Olympic Games or major elections to drive spending.

Yet Wal-Mart continues to buck the recession. That’s because recession-weary shoppers need lower prices now, and in part on the company’s revamped media presence.

Surprisingly, a Wal-Mart spokesman told AdAge that the company expects to hire “tens of thousands” at its stores in the coming months, despite a recent layoff of 800 at the company’s Bentonville, Ark., headquarters.

“Wealthier customers are rediscovering Wal-Mart,” Bill Dreher, senior retailing analyst at Deutsche Bank Securities, told The New York Times.

“No one is feeling as rich as they used to. All of a sudden, Wal-Mart looks a lot better.”

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Convention wisdom would have it that retailers — damaged by the consumer spending crash — would be rolling back on ad spending.Not Wal-Mart. Traditionally tight-fisted on media buying, the world’s largest company instead raised its spending to go from ninth- to second-place...
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