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Retail 'stuffing' on Thanksgiving

The holiday shopping season started as a marathon, not a sprint.

More than a dozen major U.S. retailers stayed open for 24 hours or more on Thanksgiving Day through Black Friday, and crowds formed early and often over the two days.

About 15,000 people waited for the flagship Macy's in New York to open at 8 p.m. on Thanksgiving. Long checkout lines formed at the Target in Colma, Calif., on Friday morning. And by the time Jessica Astalos was leaving North Point Mall in Alpharetta, Ga., after a six-hour buying binge that started on Thanksgiving, another wave of shoppers was coming in about 5:30 a.m. on Friday.

"You just have to be out in the midst of all of it," said Ricki Moss, who hit stores near Portland, Ore., at 5:30 a.m. on Friday. "It's exciting."

This year may cement the transformation of the start of the holiday shopping season into a two-day affair.

For nearly a decade, Black Friday had been the official start of the shopping season between Thanksgiving and Christmas. It was originally named Black Friday because it was when retailers turned a profit, or moved out of the red and into the black. Retailers opened early and offered deep discounts.

This year, several welcomed shoppers for the first time on Thanksgiving night, while Gap Inc., which owns Banana Republic, Gap and Old Navy, opened half its stores earlier on the holiday.

Wal-Mart stores, most of which stay open 24 hours, has for the past several years offered doorbusters that had been reserved for Black Friday. And Kmart planned to stay open 41 hours starting at 6 a.m. on Thanksgiving.

That has led some to question how much further Black Friday will creep into Thanksgiving, which, along with Christmas, is one of only two days a year that most stores are closed.

Turkey Day "carves" into Black Friday

Although preemptive research done by DDB Worldwide showed that more than a quarter of all millennials (26%) intended to get shopping done on Black Friday, more research done by Chicago-based ShopperTrak states that this year's Black Friday sales dropped 13.2 percent from last year.

The reason, you may ask? The earlier start to the holiday shopping season that occurred on Thanksgiving.

"Consumers really responded to the earlier Thanksgiving hours," Bill Martin, founder of Chicago-based ShopperTrak, said on (Cyber) Monday. "They knew what they wanted, and they went out early."

Furthermore, some 45 million people went shopping on Thanksgiving in the U.S., a 27 percent spike over last year, while 92 million people shopped on Friday - an increase of only 3.5 percent, according to the National Retail Federation in Washington

If you're reading this you are likely in the business of advertising. That means you will be affected if Congress passes any tax provision or bill that changes the long-held deduction of advertising costs. 

For decades, U.S. businesses have been allowed to deduct 100% of advertising costs as an ordinary and necessary expense. But two approaches under consideration will radically change this. One comes from the House Ways and Means committee under Chairman David Camp, R-Mich., and the other from the Senate Finance Committee under Chairman Max Baucus, D-Mont. These proposals call for businesses to deduct only 50% of costs in the year the advertising runs and then amortize the deduction of the remaining 50% over a period of five or 10 years.

Equivalent of ad tax

The proposed curtailment of the ad-tax deduction is part of a larger movement toward overall corporate tax reform. Some members of Congress seek to bring the 35% corporate rate down to 25%. Changing the advertising deduction is one of several means being considered to fund this rate reduction.

Eliminating the tax deduction may benefit some corporations, but ultimately it is the equivalent of an advertising tax. Every company buying advertising would feel the burden each year. Agencies, broadcasters, newspapers and other businesses that rely on advertising will be directly affected by any resulting reduction in ad spending. The research firm IHS Global Insight estimates that changes in the ad deduction could reduce advertising-induced sales in the U.S. by more than $446 billion and place 1.7 million U.S. jobs at risk.

Impact on society

Let's start with economics. Advertising promotes product visibility and differentiation that better informs the buying public. Advertising spending stimulates a broad spectrum of business activity. Every dollar of ad spend equals $20 of economic output. Advertising supports 20 million U.S. jobs: that's 15% of all jobs in the country. These numbers come from a 2011 IHS Global Insight study. 

Changing or removing the advertising deduction is also contrary to more than 100 years of business history. The U.S. Tax Code permits businesses to deduct the full cost of advertising, just as it permits the deduction of other ordinary business costs such as salaries, office rent and utilities. Advertising-tax deductions enable the ad industry to grow and thrive and remain such a vital component of our national economy.

Get involved

Despite grassroots outreach, strong data and history itself, some lawmakers insist on pursuing a faulty path in a quest for tax revenues. That's why we need even more members of the advertising community -- agencies, clients, publishers, broadcasters -- to get involved.

We must bring the full power of our collective voices to the opposition. If you haven't already, contact your members of Congress and let them know that what we do is essential to the businesses in their districts and in the nation as a whole. General tax reform may be a worthy goal, but changing the advertising deduction is not the path to take.

Local radio "powers back on"

The local radio market is growing, albeit at a more moderate pace than it once did, by expanding its offerings to off-air platforms, providing a wider range of listener experiences and advertiser opportunities, according to BIA/Kelsey's new state-of-the-industry report. 

Defining the local media marketplace as all local media/services that provide access to local audiences, BIA/Kelsey estimates total local media spending for 2013 to be $132.7 billion. This marketplace includes all of the media that local radio stations compete against for national and local advertising spending in their markets. Based on this definition of local advertising, local radio stations receive 11.5 percent of all advertising revenue being spent in local markets, fourth amongst all local media segments, behind direct mail (27.2 percent), newspapers (16.1 percent) and TV (14.9 percent).

"As we move toward 2014, it's clear the radio industry has adapted to incredible competition from all sides, with streaming and other audio competitors taking audiences," said Mark Fratrik, chief economist and report author, BIA/Kelsey. "Yet local radio is surviving, and in some instances, thriving, and poised to compete well in the new marketplace. Radio is also beginning to deliver other compelling digital services that help its local advertisers navigate promotional opportunities. With the right attitude towards the new reality of increased competition and strategic planning, local radio stations can prosper."

As local radio works to keep pace with digital innovation, the landscape of radio advertisers reveals an attractive and diverse group. Local radio generates over 10 percent of its advertising from five different groups of advertisers: retail (18.0 percent of total radio industry revenue), financial/Insurance (17.0 percent), restaurants (14.5 percent), automotive (14.0 percent) and technology (10.0 percent).

Nationally, BIA/Kelsey's Media Ad View Plus forecast reveals local radio stations receive 14.3 percent of all advertising spent by finance and insurance companies and 12.1 percent of all advertising spending by restaurants. This diversity of advertisers, along with the strong market share with those advertisers, indicates radio remains an important part of the advertising mix for several groups of national and local advertisers.

7 Sites for Holiday Gift Inspiration

1. WalletBurn - WalletBurn's fun site design lets you press a button to generate a random product recommendation from its "super secret database of cool stuff to buy." Anyone looking for more targeted search can narrow things down by selecting from categories organized into Useful, Fun, Luxury, or Other. From metallic disco pants to a Hershey-scented candle, you'll be surprised by the suggestions the site generates.

2. Shut Up and Take My Money - With categories such as Geeky, Tech, Gaming, Toys, Bacon/Zombie, and Beer/Wine, this site won't help you pick the perfect gift for your dear old Aunt Edna, but it will sort you out with gift inspiration for buddies, siblings, colleagues, and other peers. Suggestions vary from the novel to just plain novelty, with all price ranges covered.

3. OpenSky - OpenSky is a social site that aims to "discover, share, shop, and grow the world's most exciting emerging brands." In addition to the "Holiday" section of the site, which gives you a ton of great gift ideas via curated lists, you can browse the Discover section through hashtags such as #giftsforthetechie or #giftsunder25.

4. The Gadget Flow - Angled as a site to "showcase the coolest gadgets available on the web in one location," The Gadget Flow is great for techspirational gift-buying. Due to the discovery nature of the site, you may find a few highlighted products that are only concepts or going through the crowdfunding process, but there are plenty of rad, real-life gadgety gift ideas, too.

5. Fancy - Sign up on Fancy and you'll get regular updates on interesting products of note across all shopping genres. If inspiration is what you're looking for, Fancy's Gift Guides, arranged under headings such as "Galactic Goodies," Coffee Lovers," and "Let's Have a Party," offer you curated collections - of often unusual products - around a theme. 

6. Awesome Claus - Awesome Claus is a growing collection of great gifts that come in under the $20 mark. Perfect for stocking stuffers, Secret Santa gift ideas, and token gifts that won't break the bank, you can browse the current selection and join in by submitting your own suggestions.

7. Svpply - Svpply is a "curated collection of the world's best products and stores," currently boasting 3,442,628 products from 132,968 stores. It's fashion centric, but with Tech, Media, Home, and Art categories, it provides many great shopping ideas. You can also sort items by price, meaning that you can narrow down results to fit your budget easily.