FSIs advertising up across grocery, drug but down overall

ST. LOUIS — Grocers tracked within the Tactician Media Business Intelligence Transaction Database increased their spending on FSIs by 7% over the first two quarters of 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.

 

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 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. 

 

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.