Are Big Budget Festive Adverts worth it to Retailers?

By Alison Williamson

With sleigh bells and twinkling lights just around the corner, most people will be getting into the festive spirit.

One of the most anticipated Christmas arrivals is the large advertising campaigns. Racking up millions of hits on YouTube and other streaming sites, Christmas Adverts are always something that consumers looks forward to.

However, with millions of pounds being spent on these adverts the real question is do their financial benefits help the large brands behind them.

One of the most anticipated Christmas arrivals is the large advertising campaigns. Racking up millions of hits on YouTube and other streaming sites, Christmas Adverts are always something that every consumer looks forward to.

Retail companies such as John Lewis, are currently struggling in today’s economical climate, it is whether they can justify spending this money on the advertising space necessary to reap the rewards.

Last year, John Lewis spent around £8 million on their Christmas advert that featured Elton John and his No.1 hit ‘Your Song’. John Lewis stated that the advert attracted around 50 million views despite media moguls like Lord Sugar, believing that these campaigns have ‘no impact on sales’.

John Lewis are renowned for their creative Christmas TV ads. – Source: John Lewis

A spokesperson from John Lewis said in an interview with the BBC;

“Our ads always deliver an excellent return on investment at a time of year that is critical for us, generally delivering 20 times the return on our original spend.”

This quote supports market research who also believe that Christmas adverts benefit retailers. UK consumers are found to spend about £30 billion in the festive period of the financial year.

Where the competition is fierce, companies must figure out a way to cut through and become the topic of conversation compared to their competitors.

Chief Growth Officer of Kantar UK, Jane Bloomfield, discusses how the consumers love these adverts and that companies can even produce merchandise from these opportunities; just as Aldi have done with their Kevin the Carrot Toy, which is constantly selling out online.

She said, “The impact also isn’t just at Christmas – it will set you up for the year ahead. It is important to remind consumers of your brand at this time of year.”.

The successful adverts tell a good story, strike an emotional chord and make customers get lost in the magic world that is Christmas time. With these key points, many companies would make back the costs of their Christmas advert in just one day during the busy period.

Even though companies face a big risk in creating a lavish festive advert, the fear of missing out is too great amongst the businesses. Capturing the Christmas spirit and keeping it on brand will be the key successes in each company having their own Merry Christmas.

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