Tesco above-the-line adspend surges as rivals retrench

by Simon Gwynn April 10, 2018

Tesco's 'Food love stories' campaign, created by Bartle Bogle Hegarty London

Tesco increased the amount it spent on "traditional" media by more than two-thirds last year, data from Ebiquity shows.

The supermarket’s total, which includes TV, radio, cinema, press and outdoor, was up 68.2% to £73.9m.

It made Tesco an outlier, with media spend by all retailers down 1.9% to £1.81bn, according to Ebiquity’s The Advertising Report.

Tesco was the second biggest advertiser among retail brands, after McDonald’s, which increased its spend 10.2% to £87.9m.

But most other supermarkets spent either the same or less than in 2016. Lidl (£70.5m) and Asda (£59.5m) spent roughly the same, while Morrisons (£51.8m), Aldi (£48.8m) and Sainsbury’s (44.4m) each spent between 11% and 25% less.

Tesco is set to report its annual results tomorrow, with analysts predicting a significant increase in pre-tax profits. Tesco has consistently grown sales for the past year, though in common with fellow big four supermarkets, its market share has continued to fall.

FMCG brands: big guns firing

The report also revealed a huge concentration of FMCG adspend into the biggest brands. Overall spend on FMCG brands dropped 9% to £1.38bn. The top 10 brand owners by brand spend cut their budgets almost as much – by 7.9%, to £579.8m.

But the biggest 50 individual brands saw their support increase by a fifth to £387.7m – with the next 50 also up almost a fifth to £227.2m.

The same trend can be seen when looking at individual companies. Procter & Gamble was once again the biggest advertiser among FMCG owners, accounting for more than £1 in every nine spent on all FMCG brands.

P&G’s overall spend was down 3.1% to £156.9m. But most of its top brands got a boost in ad support. Six of the top ten FMCG brands were P&G: Pantene Pro-V, Ariel, Oral-B Pro, Fairy, Lenor and Head & Shoulders. Of these, all but Head & Shoulders saw their spend increase – with the other five each increasing by at least 17%.

The second biggest FMCG advertiser, Unilever, was the only one of the top 10 brand owners to substantially increase its total spend, which was up 17.3% to £109.4m. Unilever’s top brands Dove (£12.3m), Lynx (£6.4m), Magnum (£6.1m) and Ben & Jerry’s (£5.5m) received budget boosts ranging from 49% to 166%.