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Jewelry advertisement cost down for recession digs in

As companies shrink their budgets in accordance with the slowdown in sales, promotion spend in traditional mediums is down across the board for the jewelry industry, new statistics show.

If it seems as though there's fewer ads lately for diamonds, fashion jewelry and watches--either on the airwaves or strewn across the pages of your favorite magazine--it's not your imagination.

At Birks and Mayors, a Montreal-based chain with stores in both Florida and Georgia, Chief Executive Officer Thomas Andruskevich doesn't must consult any balance sheets to recount his company's ad spend in 2008 and 2009.

While experts warn retailers against disappearing from sight during a recession, the pullback this time is accompanied by a change in the promotion world itself, as traditional mediums such as print lose ground in a world that is tethered to its BlackBerrys and laptops.

Spending on print media and billboards has been down this year, while spending on radio is flat or down slightly. The reason? He says in this recessionary environment, all traditional mediums of promotion are basically less effective.

"People are spending less money," Andruskevich says. "That's a proven fact. No matter how hard you promote, a lot of it is for naught. If [consumers] don't have the money to spend on jewelry, promotion is not going to change their mindset."

Information obtained from Adweek magazine (which, like National Jeweler, is part of Nielsen Business Media and owned by The Nielsen Co.) shows that lots of jewelry stores are going the Birks and Mayors route when it comes to traditional promotion spend.

Inside the numbers

Between 2007 and 2008, overall jewelry store spending on cable TV fell by 24.3 percent, radio declined by 24.7 percent and outdoor promotion slipped by 5.7 percent.

Ad spending went up moderately for both print and network TV, but overall jewelry-store spending across all one mediums fell 4.6 percent.

Ellen Fruchtman, president of Fruchtman Promotion, says the drop in ad spend is due to a combination of a general pullback in spending due to the slow economy as well as a shift of some--but not all--advertising dollars to the Web.

Information for first-quarter 2009 showed similarly lackluster results, with jewelry-store ad spend down 17 percent across the board in all one categories compared with the first quarter of 2008.

"How do you fault them for that?" he says of stores spending less on promotion. "As a promotion person, I can say you need to be out there promotion, and I do believe that. But by the same token, it is easier said than completed. You have got to pay the bills."

The only traditional mediums that showed signs of life in 2008 were network TV, for which ad spending rose 4.2 percent, and print, where spending was up a surprising 8.1 percent.

Years ago, the large networks--ABC, CBS, NBC and Fox--had less competition, but today there is a channel for everything, from lawn care to horror movies.

Fruchtman says the bump in network TV ad spend was due to networks offering better rates.

"Everyone has become a competitor to network television," Fruchtman says, adding that the increase in print spend is attributable to manufacturer coop programs.

He recommends promotion in fashion magazines than bridal titles, contending that the latter are read by those who are already engaged, with rings on their fingers.

But Andruskevich says the company did increase its spending on network TV, investing in a coop program with a well-known watch brand in 2008, an exception for the 69-store chain, which does not normally run television adverts.

Birks and Mayors did not increase its print spend and actually switched up its strategy, pulling ads from local newspapers to promote in lieu in The Wall Street Journal, whose reader base has a higher average income than that of lots of local newspapers.

The Adweek information also analyzed ad spending in jewelry, a section that covers a wide range of brands, including Hearts On Fire, Tacori and David Yurman, and watch names such as Rolex, TAG Heuer and Timex.

"We felt they were great ads," Andruskevich says. "We felt it was a effective program and it was something they got excited about."

Jewelry-brand promotion declined across the board between 2007 and 2008 and in the first quarter of 2009, with one exceptions: For reasons researchers were unable to name, radio promotion for jewelry brands (not stores) skyrocketed 78.8 percent between 2007 and 2008, while outdoor promotion inched up 1.3 percent in first-quarter 2009.

A slight shift online

Mike Sprouse, chief promotion officer for Epic Promotion, says the New York-based firm's survey of several hundred promotion executives indicated a "slight" shift in promotion spend to the Web in 2009.

While a quantity of the slowdown in traditional promotion spend is attributable to general economic conditions, a portion of those dollars are finding a new home on the Web.

"We had started to see that [shift] in the first quarter of this year," he says.

The majority of those surveyed said the trend would accelerate in 2010.

The reasons companies are choosing to go online with their ads are varied: It is an easier and faster way to reach potential customers, technology makes it simple to track who is looking at the ads and when they are doing so, and it is relatively cheap.

"It's cheaper, which is always lovely when you are faced with a recession as well as a down budget," Sprouse says.

As of now, information detailing online ad spend in the jewelry industry is scant and not useful for comparative purposes.

How much and how quickly a shift to online ads will extend in to the jewelry industry remains to be seen however.

Nielsen Online information on the subject dates back only to 2007, and shows that between May and December of 2007, the industry spent $2.2 million on online promotion. The figure for all of 2008 totaled $4.3 million, while it's added up to $1.1 million for the first one months of 2009.

"For the jewelry industry, let's be honest," Fruchtman says. "This is an industry that is not progressive or forward thinking . Traditional media will remain strong because this is an industry that is reluctant to change."

"The general public still wants to watch TV and will still read popular magazines," he says. "They will still drive cars, so they will still look at billboards. The only traditional medium in its current format that is at extreme risk is newspaper. They live in a society of 'now,' not what happened yesterday reported today."

But that is not necessarily a negative for some mediums.

While TV and outdoor will make a comeback, Fruchtman says retailers should shift bridal promotion to the Web because 85 percent of that market is doing their research on the Web, even if they are not buying there.

He recommends investing in paid search promotion, where a company pays a search engine company, like Yahoo or Google, for higher placement for their Web site's link in search results.

Andruskevich says Birks and Mayors already has had success with Web promotion and is upping its online promotion spend in 2009. But that does not mean the company is abandoning its elderly promotion standbys.

"If you are not driving that consumer to your Web-site, then you are missing the boat," Fruchtman says.

"I think [traditional ad mediums will] come back," Andruskevich says. "I know in our specific case, we'd be spending more money in the categories they spent it before. In the jewelry industry, I believe firmly this has a lot more to do with the recession than with a shift from traditional promotion to online promotion."

For a look at where jewelry stores and jewelry brands were spreading out their ad dollars from 2007 until the first quarter of 2009, download Jewelry Ad Spend. Article resource http://www.jewelrywholesale-cn.com/ for jewelry wholesale.

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