CEO Ron Johnson Boosts TV Advertising, Adds Former Coca-Cola Marketer Sergio Zyman as an Adviser
sales plummeted 25% in 2012, even as its measured media spending jumped 14% to $504 million.
The beleaguered retailer spent more on advertising than it has in any of the last five years and made major changes to its media mix, under the direction of CEO Ron Johnson. TV advertising climbed, particularly network TV spending, while radio and internet display investments dropped. And despiteMr. Johnson’s declaration late last summer that the retailer would invest heavily in newspapers, spending in that category was down slightly.
JC Penney reported that its fourth-quarter net loss widened to $552 million. The retailer posted an annual net loss of $985 million.
Sales in the fourth quarter, which includes the holiday-shopping period, slid 28% to $3.88 billion. For the year, sales fell 25% to $12.98 billion. That marks the lowest annual revenue the retailer has reported since at least 1987.
“It’s the worst performance that I’ve ever encountered in decades of covering retail — there’s nothing really to compare it against,” said Bernie Sosnick, an analyst at Gilford Securities.
The internet has caused massive disruption across the media landscape, causing a surge in job insecurity at traditional establishments.
But now we have a good look at the numbers.
The Bureau of Labor Statistics has put together a presentation on the recent history and direction of media jobs. It’s not pretty.
Across several different industries (radio, TV, newspapers, film, etc.) there’s been a steady downward march in employment.
Total media jobs peaked at the beginning of the decade.
Employment in the book/periodical/music industry has been on a steady downward trend, and in 2011 the bottom completely fell out of the industry.
Sound recording? Same deal.
Almost three in five US internet users read newspapers online each month, according to comScore Media Metrix data.
57% of Web Audience Read Online Paper in May Online newspapers received about 123.9 million unique US visitors in May 2010, or roughly 57% of the total monthly US unique internet audience of about 215.7 million users. Those visitors [...]<img src="http://feeds.feedburner.com/~r/marketingcharts/~4/-Sa6RZtikDw" height="1" width="1"/>
the greater efficiencies of “digital” mean that the same amount of “advertising” can be achieved with fewer dollars because more waste can be eliminated. The decreases in ad spending in traditional media channels like newspapers will only be partially replaced by ad spending online.
For example, the dollars that used to fund newspaper classified advertising has been replaced by free online classifieds through Craigslist. While newspapers had incremental costs due to materials, printing, labor, and distribution, online classifieds have virtually no incremental cost.
Similarly print advertising, which was based on targeting ads to specific demographics of readerships are being replaced by online ads which can be more finely targeted to even more niche readerships — e.g. contextual advertising. And the revenue models based around cost per click are inherently more efficient (and thus lower cost) than the impression-based revenue models of magazines. Again for every dollar taken out of print advertising, only a few cents are needed to replace it in “digital.”
Agree with me or tell me I’m stupid @acfou
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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