FSI Advertising Study Shows Grocery Advertising Expenditures Up; QSR and Regional Home Improvement Post Gains
St. Louis, MO, August 06, 2015 --(PR.com)-- Grocery retailers increased their spending on newspaper freestanding inserts (FSIs) in the first two quarters of 2015 compared to the same period of 2014. Grocers in the Tactician Media Business Intelligence Transaction Database increased their spending on FSIs by 7% over the same period of 2014 and 2015. The changes come from a larger mix of grocers utilizing newspapers to deliver their message to consumers and the growth in the number of frequency and volume of the major grocers.
Growth in the Grocery vertical was driven by increases from Winn Dixie, Publix, Supervalu, Kroger, Cub Foods, Aldi and many others. Many of the top national grocers had double digit spending increases for the first half of 2015 compared to the same period of 2014. FSI spending by Albertsons, Ingles, Tops, Raley’s and others was lower to a smaller extent. In addition, spending by single market independent grocers increased as their use of newspaper FSIs was over 27% higher in 2015 compared to 2014. Some of the increase came from a heavier focus on “print and deliver” programs sold by local newspapers. These higher CPM programs provide smaller grocers with the ability to compete side by side with larger national retailers in targeted distribution areas.
Overall FSI spending from home improvement retailers was down in 2015 from 2014. Revenues from FSI advertising were down 10% from the same period last year in this vertical category. Most of the declines came from “big box” retailers such as Home Depot and Lowes. However, many of the independent home improvement retailers were up substantially. True Value, Harbor Freight Tools and Northern Tool Equipment were up double digits in FSI advertising expenditures. Also driving this home improvement vertical was the continued growth of window and door retailers. Champion Windows led this group with major FSI advertising expenditure increases nationwide.
Select specialty retail advertisers pulled back in their use of FSI advertising in the first half of 2015. The Sports Authority, Toys R Us, Jo Ann Fabrics and Ulta were down substantially. However, increases from Pep Boys, Shoe Carnival, Hancock Fabrics and Michaels helped offset some of losses. Overall the FSI advertising expenditure in the specialty retail vertical was down 9% year over year for the first two quarters.
Furniture, mattress and flooring continue to be a bright spot for newspapers. The larger ticket furniture retailers took advantage of growth in select market coverage (SMC) programs, primarily providing increased penetration to consumers on Sunday. Overall the spending of these retailers was up nearly 13% over 2014 in the first half of 2015. Strong increases from retailers Mattress 1, Rooms to Go, Raymour and Flannigan, and Art Van helped to offset declines in spending by La Z Boy, Ashley, Carpet One and IKEA. Almost as important was the addition of many new retailers that did not advertise in 2014 but have now moved their advertising budgets to supporting FSI’s in the first half of 2015. Growing retailers selling mattresses supported much of this new FSI revenue.
Overall use of inserts by restaurants is less that 2% of total newspaper FSI advertising revenue but has the opportunity for huge growth for the industry. Advertising by franchise groups such as Carl’s Jr Hardees, Denny’s, Dunkin, Papa Murphy’s, Subway and Arby’s increased as these brands continue to push for additional market share. These quick service restaurants are a large user of single sheet coupons and flyers.
Pharmacy retailer FSI advertising expenditure was up 2% in 2015 as compared to the first six months of 2014. Rite Aid and CVS drove the majority of increases in both revenue and volume while Walgreens was down slightly on the revenue side even though their quantity distributed had a lower decrease from 2014.
Newspapers also saw growth with a number of consumer package goods (CPG) and healthcare providers. Preprint advertising is often placed by brokers or directly by the advertisers themselves to drive merchandise revenue into grocers and large discounters. These Third Party advertisers comprised around 8% of all FSI newspaper advertising revenue in 2015. The Third Party vertical has also seen increases by non-CPG companies such as healthcare providers, insurance and banking. FSIs can provide a very effective cost savings over direct mail, a traditional advertising vehicle for these types of companies. While Procter and Gamble pulled back their use of FSIs in the first half of 2015, Colgate Palmolive, United Healthcare, Unilever and Geico had substantial increases for the first half in 2015 compared to the same period in 2014. The conversion of postal related spending to newspaper distribution networks has been a continuing trend in the industry.
Overall, spending on newspaper FSIs was down about 7% while the distributed volume was down only 4% for the first half of 2015 compared to the same period of 2014. Some national retailers have struggled with increasing same store sales. Select retailers have retracted their print programs by cutting the number of pages and overall distribution volume. Newspapers are also feeling the effects of rate pressure from agencies and large national placement firms. These rate declines present a significant challenge for publishers as the rate decline has a much larger impact on revenue for the same or slightly less distributed volume.
Source: Tactician Media Business Intelligence Database, July 2015. The database contains over $1.3 billion of newspaper FSI transactions of over 300,000 across 535 publications in the US. Included are transactions from 2013 through June 2015 totaling over 32 billions inserts placed into consumers households. For further detail into the data and methodology please contact us at tmconsulting@tactician.com.
About Tactician Media
Tactician Media, LLC is a leading provider of web-based products for the planning and placement of print media. Working with many of the largest newspaper and newspaper publishing organizations throughout the United States, the company provides clients with technology and data including mapping and transaction management programs. Visit us at www.tacticianmedia.com.
Growth in the Grocery vertical was driven by increases from Winn Dixie, Publix, Supervalu, Kroger, Cub Foods, Aldi and many others. Many of the top national grocers had double digit spending increases for the first half of 2015 compared to the same period of 2014. FSI spending by Albertsons, Ingles, Tops, Raley’s and others was lower to a smaller extent. In addition, spending by single market independent grocers increased as their use of newspaper FSIs was over 27% higher in 2015 compared to 2014. Some of the increase came from a heavier focus on “print and deliver” programs sold by local newspapers. These higher CPM programs provide smaller grocers with the ability to compete side by side with larger national retailers in targeted distribution areas.
Overall FSI spending from home improvement retailers was down in 2015 from 2014. Revenues from FSI advertising were down 10% from the same period last year in this vertical category. Most of the declines came from “big box” retailers such as Home Depot and Lowes. However, many of the independent home improvement retailers were up substantially. True Value, Harbor Freight Tools and Northern Tool Equipment were up double digits in FSI advertising expenditures. Also driving this home improvement vertical was the continued growth of window and door retailers. Champion Windows led this group with major FSI advertising expenditure increases nationwide.
Select specialty retail advertisers pulled back in their use of FSI advertising in the first half of 2015. The Sports Authority, Toys R Us, Jo Ann Fabrics and Ulta were down substantially. However, increases from Pep Boys, Shoe Carnival, Hancock Fabrics and Michaels helped offset some of losses. Overall the FSI advertising expenditure in the specialty retail vertical was down 9% year over year for the first two quarters.
Furniture, mattress and flooring continue to be a bright spot for newspapers. The larger ticket furniture retailers took advantage of growth in select market coverage (SMC) programs, primarily providing increased penetration to consumers on Sunday. Overall the spending of these retailers was up nearly 13% over 2014 in the first half of 2015. Strong increases from retailers Mattress 1, Rooms to Go, Raymour and Flannigan, and Art Van helped to offset declines in spending by La Z Boy, Ashley, Carpet One and IKEA. Almost as important was the addition of many new retailers that did not advertise in 2014 but have now moved their advertising budgets to supporting FSI’s in the first half of 2015. Growing retailers selling mattresses supported much of this new FSI revenue.
Overall use of inserts by restaurants is less that 2% of total newspaper FSI advertising revenue but has the opportunity for huge growth for the industry. Advertising by franchise groups such as Carl’s Jr Hardees, Denny’s, Dunkin, Papa Murphy’s, Subway and Arby’s increased as these brands continue to push for additional market share. These quick service restaurants are a large user of single sheet coupons and flyers.
Pharmacy retailer FSI advertising expenditure was up 2% in 2015 as compared to the first six months of 2014. Rite Aid and CVS drove the majority of increases in both revenue and volume while Walgreens was down slightly on the revenue side even though their quantity distributed had a lower decrease from 2014.
Newspapers also saw growth with a number of consumer package goods (CPG) and healthcare providers. Preprint advertising is often placed by brokers or directly by the advertisers themselves to drive merchandise revenue into grocers and large discounters. These Third Party advertisers comprised around 8% of all FSI newspaper advertising revenue in 2015. The Third Party vertical has also seen increases by non-CPG companies such as healthcare providers, insurance and banking. FSIs can provide a very effective cost savings over direct mail, a traditional advertising vehicle for these types of companies. While Procter and Gamble pulled back their use of FSIs in the first half of 2015, Colgate Palmolive, United Healthcare, Unilever and Geico had substantial increases for the first half in 2015 compared to the same period in 2014. The conversion of postal related spending to newspaper distribution networks has been a continuing trend in the industry.
Overall, spending on newspaper FSIs was down about 7% while the distributed volume was down only 4% for the first half of 2015 compared to the same period of 2014. Some national retailers have struggled with increasing same store sales. Select retailers have retracted their print programs by cutting the number of pages and overall distribution volume. Newspapers are also feeling the effects of rate pressure from agencies and large national placement firms. These rate declines present a significant challenge for publishers as the rate decline has a much larger impact on revenue for the same or slightly less distributed volume.
Source: Tactician Media Business Intelligence Database, July 2015. The database contains over $1.3 billion of newspaper FSI transactions of over 300,000 across 535 publications in the US. Included are transactions from 2013 through June 2015 totaling over 32 billions inserts placed into consumers households. For further detail into the data and methodology please contact us at tmconsulting@tactician.com.
About Tactician Media
Tactician Media, LLC is a leading provider of web-based products for the planning and placement of print media. Working with many of the largest newspaper and newspaper publishing organizations throughout the United States, the company provides clients with technology and data including mapping and transaction management programs. Visit us at www.tacticianmedia.com.
Contact
Tactician Media, LLC
Michael Lombardo
636-534-4501
tacticianmedia.com
Michael Lombardo
636-534-4501
tacticianmedia.com
Contact
Categories