Discount retailer ALDI Australia is chasing down favourites Woolies and Coles as it virtually doubled its ad spend in 2015.
Coles’ marketing spend was chopped by 25 per cent, totalling $53.6 million last year, while rival Woolies cut back by 5.3 per cent to $87.9 million, according to Nielsen’s latest Advertising Information Service figures.
But ALDI was having none of it, taking its total spend across metro and regional TV, press, mags, radio, out-of-home, cinema, online and direct mail to $28.9 million, up from $15 million in 2014.
When ALDI first stuck its flag in Aussie land 15 years ago, it had a strict policy of not spending on telly advertising, but rather spruiking its wares in weekly catalogues. Cute.
But around four years back, ALDI threw caution to the wind and kicked off its quirky ad campaigns including “Like Brands. Only Cheaper”, with all kinds of humorous characters.
The ad campaigns are developed in conjunction with creative agency BMF, which has been working with ALDI for 12 years.
The “Like Brands. Only Cheaper” ads originally aired in the UK but the campaign was so successful it was adapted to the Australian market, where consumers are loving the private-label food and groceries.
According to the AIS figures, ALDI spent $24.3 million on metropolitan and regional TV in the 12 months ending December, compared with $7.7 million in 2014, running at least five creative campaigns including “Back to School”, “Special Buys” and the “Supermarket Switch Challenge,” which chronicled ALDI “fans” in their quest to convert the diehard Coles and Woolies fans.
At the same time as ALDI started cranking up the heat, Coles cut back on metro TV ads in 2015 by 19 per cent, while Woolies’ metro TV budget fell 12 per cent, and regional dropped drastically by 46 per cent.
ALDI, which has annual sales of more than $6 billion, is now spending less on metro and regional press ads (down 72 per cent) in favour of television.
All three retailers downplayed the shift in ad spending, suggesting the figures were not meaningful and did not accurately reflect changes in the timing of campaigns and a move towards social media and direct marketing and away from mainstream channels, but analysts say the standout stats show intense competition firing up between the three.
“Marketing has been a part of ALDI Australia’s business since we opened our first stores in Australia in 2001. It began with our catalogue, which continues to be a priority channel, with many of our loyal customers eagerly awaiting its arrival each week to see what special buys are about to appear in store,” an ALDI Australia spokesperson told Fairfax.
“The scope of our program has expanded over the course of the last 15 years to include TV, digital, outdoor and radio, in line with our major competitors.”
Coles’ marketing spend appears to have been declining since 2013, when it spent $75.3 million relaunching its FlyBuys loyalty scheme and Coles credit cards and car insurance.
A spokesperson for Coles added, “Coles always looks to optimise our spend and ensure that our marketing responds to our customers’ needs,” while Woolies reps said its campaigns were all about telling custmers they offer “fresh food” and “great value”.
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