The largest proportion of the TV advertising budget was spent on ITV, which accounted for 63 per cent of the £3.2 million spent on TV. This led to healthy average monthly TVRs of 74 against Tesco’s core target audience of housewives.
The Bottom Line
The advertising prompted an uplift in sales. Comparing revenue to the same period the year before and the year after, revenue from all the promoted items was significantly higher. It also had a positive knock-on effect on products within the same category, which also saw a sales increase. The sales promotions achieved longer-term disruption to buying habits too, with the effects of the promotions lasting up to a year.
These promotions saw categories, such as dry grocery (i.e. staple products such as tea, cereal, canned goods, pasta) benefit, with a 1.46 per cent increase in sales from the start of the campaign until November 2001. Since this category reflects footfall, it showed that advertising was attracting more people into Tesco than would otherwise have been the case. It also made them shop more regularly at the supermarket.
In terms of numbers, there was a rise in the overall number of households shopping at Tesco during the promotional period and this remained three per cent higher after the promotions ended. This was due to a noticeable increase in the number of secondary shoppers shopping during the promotional period. Although this flattened out when the promotions ended there was a rise in the number of loyal shoppers, which suggests that secondary shoppers became loyal shoppers.
Advertising Success Demonstrated by a Specific Promotion
The Wine Festival Promotion that ran during 2001, and its impact, clearly demonstrates how effective the price promotions were. During the previous year the campaign had been supported by a national press spend of £99,000 and no TV advertising. In 2001 the same promotion was run with TV price promotion ads and its impact was staggering. Revenue on the promoted wines almost doubled and a million and a half more bottles of the promoted wine were sold. In 2000, when there was no TV ad spend, wine category volume fell.
The advertising attracted more secondary shoppers, as well as expanding the shopping list of loyal shoppers. Also, the ads attracted upmarket shoppers, rather than bargain hunters. People who bought the promoted wine spent more per transaction, buying more bottles as well as spending more on each bottle. This meant that Tesco was gaining shoppers who spent more on products as well as buying greater quantities.
There was a total increase of 10 per cent in wine sales after the promotion and 44 per cent of those who were brought into Tesco to buy into the Wine Festival promotions were still shopping there six weeks after the promotion ended.
Recap
There were six different ways in which the Wine Festival promotions worked for Tesco and this reflected the overall success of the price promotions advertising. It brought in secondary shoppers, it expanded people’s shopping list, it brought in category enthusiasts, it had whole basket benefits, upmarket customers were brought in and there was a positive long-term disruption to people’s spending patterns and store choice.
Reaping the Rewards
In the 14 months of the price promotions campaign there was an average rise in sales of 1.45 per cent, which in monetary terms translates into £13.7 million in revenue. Assuming that on average all categories and stores saw this percentage increase then the total revenue rise is £349.4 million. This figure dwarfs the cost of the campaign, which was just £3.2 million.
This case study is drawn from the IPA Effectiveness Awards, the most rigorous examination of successful advertising in the world. For more information visit
Media Analysis: Tesco TV flaws show through
Marketing 11 Jan 2006
Heralded as an alternative to broadcast advertising, the in-store network has underperformed, reports Jeremy Lee.
Despite its best efforts, the outdoor industry is finding it difficult to suppress a sense of schadenfreude at the problems being experienced by Tesco's in-store TV channel, Tesco TV.
At its launch in May 2004, Tesco, with characteristic hubris, made much of the fact that, with 27% of all shoppers visiting its stores, the move instantly transformed it into a media owner in its own right, with the might - and audience - to take on the traditional TV broadcasters.
The company envisaged that it would be able to transfer its unassailable position on the high street into the media environment, emulating the experience of Wal-Mart, which has made a success of selling screen space in the US. Apparently convinced of its ability to lure advertising budgets away from traditional advertising media, Tesco hired JCDecaux to oversee sales on the channel.
Less than two years later, the reality has proved rather different, with some agencies and advertisers refusing to buy into Tesco TV. Even the supermarket itself is giving it only qualified support. 'Tesco TV is still in development, having been in-store for only 18 months,' says a Tesco spokesman. 'It is popular with customers and many of our smaller suppliers, who could not normally afford to reach so many consumers through traditional advertising.'
The mention of 'smaller suppliers' is significant, suggesting that bigger clients have largely turned their backs on the format. Indeed, JCDecaux insiders claim the bulk of its revenue comes from direct deals with advertisers, rather than agencies or outdoor specialists.
Stunted development
Tesco, which orginally said it would install plasma screens in 300 of its biggest stores, has long since halted the planned roll-out at just 100. JCDecaux, meanwhile, has been forced to slash its rate-card prices, after advertiser response proved less than overwhelming.
So what has gone wrong? According to Chris O'Donnell, managing director of OneZeroOne, the digital division of outdoor specialist Kinetic, the answer lies in a range of areas, not least Tesco's arrogance. What he finds of most concern is that some of the inevitable teething problems surrounding Tesco TV's launch are yet to be resolved.
O'Donnell claims the first, and most fundamental problem, was that Tesco and JCDecaux treated the in-store screens as if they were a TV medium in their own right.
There was a propensity to encourage advertisers to use Tesco TV to run broadcast-style ads. These did not work because of the location of the screens, which are suspended from the ceiling. It has subsequently been shown that simpler advertising messages with static branding have proved more successful.
'The frequency was wrong; it is not TV. People don't stand in front of the screens, they absorb it like any other outdoor medium', says O'Donnell.
Tesco's attempts at airing content specific to the aisles in which the screens were placed have also failed to ignite advertisers' passion. They have been scrapped in favour of ads being given 'run-of-camp' around the screens.
Worryingly, these problems could have been ironed out before the format was launched. 'Tesco didn't do enough research into how people look at the screens,' says O'Donnell. 'You would have thought a company that sophisticated would have researched it properly.'
This was an issue that also faced media agency Starcom UK. When the format was first introduced, the agency trialled it for some of its clients, but based on its experiences, decided not to continue using it.
'The results were a mixed bag; some were successful and some a real flop,' says group media director Erica Taylor, who adds that she would use the medium again only if she were provided with more comprehensive research.
Agency agendas
There are other factors at play that may have stymied Tesco TV. One of these is the vested interest of agencies, which Tesco banked on being the main source of its advertising revenue.
Neil Spencer, partner at media auditing firm Slik, says agencies have found it cheaper and less labour-intensive to gain the same level of reach offered by Tesco TV on traditional TV channels.
So far, Tesco TV has not been the success originally promised, failing to revolutionise in-store screen media by moving it on from the video-loop ads so beloved of DIY and hardware stores.
However, there are finally signs that Tesco and JCDecaux are grasping how best to sell the channel to advertisers. Rather than sell it in isolation, they have started to package it with other in-store marketing opportunities, such as six-sheet posters, gondola-ends and floor media - a decision welcomed by both Spencer and O'Donnell.
'Brands are buying Tesco as a destination; they don't want Tesco TV in isolation. If Tesco gets the formula right with enough fact-based evidence behind it, potentially, it is a great medium,' concludes O'Donnell.
The Tesco Personal Finance affiliate programme has become one of the most respected programmes in the market due to its growth and size. It is a great programme for affiliates because the Tesco brand is so well known and all the activity we do in this programme compliments and mirrors all other Tesco advertising which includes TV and in store advertising. In true Tesco value style each of the programmes will always have some sort of customer offer available through price discounts and Clubcard offers. As an Affiliate you will also benefit from the cross-selling that Tesco do on their website so if your referrer purchases a car and home insurance policy you will be paid commission for both although you may have only referred them as a car insurance customer.
Tesco rapped for organic advertising
26/03/2003 - Retailers in the UK are increasing their organic food offering all the time, especially as consumers become increasingly concerned about the safety of much of the food they eat. But playing on these fears to advertise and promote organic food is a risky business, as the UK's leading food retailer, Tesco, recently discovered.
The company has published a leaflet entitled ‘Organic: your everyday choice' which stated: "Why choose organic? We all care about what we eat, but if you are concerned about the effect food production might have on you and the environment, then organic food is the natural choice for you.
"Kinder to the environment, organic farming seeks to be in harmony with nature by minimising the use of pesticides and fertilisers, and maximising the use of traditional farming methods. Natural control of pests and disease is encouraged, and control of weeds and enrichment of the land is achieved through skilful use of crop rotation and natural composts."
It concluded "... What is organic agriculture? ... It aims to better protect the environment and to build a healthier ecosystem for the future ..."
But the Advertising Standards Agency () was called in to adjudicate after a member of the public complained that these statements were misleading and designed to generate interest in organic food (which is frequently far more expensive than traditional food products) by playing on consumer concerns.
The complainant focused on the statement "if you are concerned about the effect food production might have on you and the environment, then organic food is the natural choice for you" which, they said, misleadingly implied that organic food was safer and healthier than conventional food.
Tesco argued that consumers had a choice as to whether to buy organic food or not, and that it was for shoppers to decide whether organic food was the right choice for them. It added that organic food was the right choice for most readers concerned about the effect food production might have on them and on the environment, including those who were concerned about hydrogenated fats and certain additives that are not allowed in organic foods.
But a study from the University of Hohenheim in Germany, also used by to justify its statement, clearly states that "no clear conclusions about the quality of organic food in general can be reached using the results of present literature and research results. The risk of contaminating food with pesticides and nitrate can be assumed to be lower in organically rather than in conventionally produced food. However, significant differences between organic and conventional food [cannot] be demonstrated."
The ASA agreed with the complainant that Tesco's pamphlet implied that organic food was safer and healthier than conventional food. It considered that although the evidence submitted showed organic farming might be the right choice for readers who were concerned about the effect of intensive food production on the environment, the retailer had not provided evidence that it was the right choice for readers concerned about the effect intensively farmed food might have on their health. Tesco was told not to repeat the claim unless it could provide further substantial evidence to support it.
Tesco also said in the leaflet that "control of weeds and enrichment of the land is achieved through skillful use of crop rotation and natural composts ..." but this too was challenged by the complainant, who said that other methods such as flame throwers and mechanised hoes were widely used in organic farming. Once again, the ASA agreed.
Tesco claimed that crop rotation was the sole method of weed control for many crops, and that mechanical hoes were a secondary method of weed control and were no different from manual hoes. The ASA said that the claim implied control of weeds and enrichment of the land was achieved by skilful use of crop rotation and natural composts alone; the Basic Standards for Organic Agriculture and Processing, set out by the International Federation of Organic Agriculture Movements, encourage the use of natural composts and rotation of non-perennial crops, but also recommend using physical and thermic measures of crop protection such as pheromone traps or thermic weed control.
However, the complaint that Tesco's claim that organic food was kinder to the environment was also misleading was not upheld by the ASA. The University of Hohenheim study also stated that, in comparison with conventional farming, organic farming benefited wildlife conservation and the landscape, caused less nitrate leaching, eliminated the risk that ground water would be contaminated with synthetic pesticides and consumed less artificial energy and produced less carbon dioxide.
While Tesco had not taken the effect of transporting the produce into account, the ASA agreed that it had shown sufficient evidence to prove that the claim was correct.