Unpacking Christmas Ads: A British Retailer's Christmas Miracle?
This blog discusses what makes Christmas ads "successful" both through the eyes of the public at large and from the perspective of the British retailers themselves. In some cases, popular Christmas ads lead to an increase in sales over the festive period. However, as some retailers have experienced, festive ads are not always a retailer's Christmas miracle and come with their own limitations.
Christmas has been described as the "super bowl of British advertising". The peculiarly British tradition of creating a "Blockbuster" Christmas television ad allegedly began in 2011 with John Lewis's pioneering ad "The Long Wait". Since then, more and more retailers and brands have joined in, striving to create stand-out festive ads.
What makes a Christmas ad "successful" through the eyes of the public?
Successful Christmas ads traditionally showcase a number of common themes woven into a narrative: a loveable character or brand mascot; nostalgia; celebrities; famous soundtracks; children; and, of course, Christmas…
While there are a host of well-known ads, perhaps the best example for this year is the John Lewis and Waitrose advert, Excitable Edgar. The ad follows an adorable tiny dragon, befriended by a little girl, who has been ostracised from his medieval village due to his habit of setting fire to things accidentally. The advert ends with the dragon learning that his "flaw" could well be used to his advantage, as he reunites with the villagers by setting alight a Christmas pudding to a round of applause. In the background, Bastille sing a slow and moving cover of the song "Can't Fight this Feeling". The advert has proved so popular that Excitable Edgar teddies have been offered for sale online for close to 4x their original price.
However, this year some retailers and brands have distanced themselves from long, storytelling, tear-jerker ads and the results are still considered some of 2019's finest. Two well-received ads are the ad for Walkers Crisps which is simply a man fighting with Mariah Carey over a crisp and the popular Ikea ad which features old and worn ornaments rapping about how dirty the Christmas host's house is.
According to popular opinion on this year's Christmas ads, you should "go big" or "go funny".
Do Christmas ads boost sales?
The jury is still out on whether Christmas ads can boost sales, despite how popular they may be. Many Christmas ads don't even feature products for sale or showcase the retailer's/brand's name. In some cases, if you were to take away the logo at the end, you would be forgiven for having no idea which business was being advertised. Also, according to one ad agency, 89% of Christmas ads are immediately forgotten, casting further doubt on their effectiveness.
Despite these limitations, a John Lewis spokesman recently stated that its Christmas ads deliver 20 times the return on its original spend. However, not all Christmas ads are successful at boosting sales. A number of retailers, despite releasing tear-jerking Christmas ads, have experienced poor Christmas sales.
According to Michael Cross, founder of Brightblue Consulting, on average, Christmas ads generate between £1.50 and £4.50 in profit for every pound spent. However, the performance of Christmas campaigns is less effective than those run at other times of the year, normally because of higher advertising costs.
As can be seen from above, Christmas ads are no sure-fire success story. Considering the vast amounts of money such ads cost, Christmas ads seem like an expensive and risky sale-boosting strategy. In fact, some have likened British retailers' competitive spending on Christmas ads to the space race because of the large amounts spent, despite the uncertain benefits.
Perhaps for this reason, retailers are now attempting to make their Christmas ad spending go further. For example, this year John Lewis and Waitrose released one single advert, rather than funding separate ads. Many retailers are also cutting costs by moving Christmas advertising online, rather than relying on expensive TV slots. However, while measures such as this mean that retailers get "more for their money", Christmas ad spending is still increasing year-on-year overall.
The takeaway
As noted above, despite how popular certain kinds of Christmas ads can be, it is unclear how effective they are at boosting sales. In light of the struggles faced by some High Street retailers, you would perhaps assume that many would cut back on Christmas ad spending. While some retailers are trying to get more out of their advertising for their money (e.g. by running campaigns online), the level of overall ad spending continues to increase year-on-year and this Christmas, a record-breaking £6.4bn will be spent on advertising. Christmas is clearly viewed as a make-or-break time of year for retailers and perhaps this is the reason retailers continue to happily spend so much money on festive ads in the hope that its investments will translate into jolly, plump figures on P&L sheets.