Richmond’s back-to-school sales tax holiday weekend has come and gone, and Labor Day (which the start of school must come after, according to Virginia law) is still to come. So let’s take a look at what, if anything, the barrage of tax holiday advertising for back-to-school merchandise accomplished.

There sure was a lot of it.

That, at least, makes sense, since, according to PointRoll, whose research has tracked consumer retail shopping patterns over the past three years, “Back-to-school season…represents a vital period for certain manufacturers and retailers who do some of their biggest business as families and students stock up on gear for the new school year, ranking second only to winter holidays.”

But much, if not all, of the other things they do makes little sense when you think about it analytically.

“[W]e’ve witnessed major retailers throw at it bundles, up-sells, bulk discounts, co-branded promotions, free shipping, buzz agents and every other conceivable sales trick,” writes Jonathan Salem Baskin in Advertising Age, “And yet it’s hard not to think that they’ve missed the boat.”

They have, in five significant ways.

Missed opportunity #1: Shifting timing instead of building sales

The premise behind the tax holiday weekend seems to be that if you get everyone to do their back-to-school buying over the same weekend, total sales will somehow skyrocket. Maybe the presence of all the parents buying back-to-school stuff at the same time will inspire an impulse-buying frenzy. Maybe the prospect of saving a big 5% on state sales tax will inspire spending 10% more on merchandise. Or maybe trenchant advertising will give one manufacturer an overwhelming gain in brand preference and share.

It won’t, for reasons discussed below.

If this were, say, New York (8.875%) or California (10.75%), the sales tax savings might make a bigger difference. But Virginia consumers can avoid our 5% tax in the comfort and convenience of their own homes, by buying online from vendors who offer free shipping (and often better pricing).

It’s not as if there were that much upside potential, either. “Kids grow up,” Baskin notes, “so lots of this year’s purchases are required to replace stuff from last year that no longer fits.” Also, all the notebooks that were written in and the pencils, pens, markers, crayons, etc., that did the writing.

But that’s a zero-sum game. The most tax holiday weekends can do is shift the timing, not the total amount or value of purchases. They work just like Cash for Clunkers or the first-time home buyers’ tax credit – and you know how well those turned out.

Missed opportunity #2: Being out of touch with your audience

According to Baskin, back-to-school marketing “presumes that [stores and manufacturers] never before met their customers, and as if this is the first time their target audiences have gone shopping for school stuff.” This presumption is grounded in fantasy, not reality, because “[e]very family shopping for school this year had to shop for it last year, save those of newly minted kindergartners…They already know the game, from who has the best selection, sizing and quality, to when to catch the best prices…”

Which leads to the next missed opportunity.

Missed opportunity #3: Being out of touch with the calendar.

Tax holiday weekends and their attendant advertising work as if all parents were gluttons for punishment who did all the back-to-school shopping at once.

They don’t.

PointRoll’s analysis shows that “manufacturers and retailer of Apparel and Office and School Supplies (OSS) reduce their efforts by 75% from their peak at the end of August and prior to Labor Day.” The problem is, that’s just when lots of consumers are just starting to pay attention. Or they’ve lost it. PointRoll data show that parents are still interested in in apparel and OSS “into September and after school started” – after the advertising has gone away. For computers, consumer interest peaks in early summer and tapers off by end of August – mostly before the advertising starts.

Missed Opportunity #4: Same old same old advertising message

Since virtually all back-to-school shoppers have been doing this for years and know the ropes, Baskin wonders why “[t]he ad creative is frighteningly similar across brands, evoking variations on the theme of ‘we have low prices on whatever you’re looking for.’” It’s generic rather than specific, it’s self-referential instead of audience-oriented, it talks features (inventory and pricing) instead of benefits, and in any event, the parents have been hearing it over and over since their oldest kids started kindergarten, if not preschool.

So is it any wonder they ignore it?

Missed opportunity #5: Myopia

It’s as if kids spent only one year in school, or their parents had mid-term amnesia.

The marketers and their advertising treat each back-to-school period as if it were a discrete, unique event rather than one more step in a nine- to thirteen-year process. This approach throws away an opportunity to build long-term loyalties, which are important because the best new customer is a satisfied, loyal previous customer.

“[W]hy aren’t [advertisers] strategically marketing their…brands and selling an ongoing relationship with their customers instead of pitching tired old sales promos as if they were total strangers,” Baskin asks. He goes on to suggest some “ways retailer CMOs could recognize last year’s shopping behavior in order to prompt it this year.” Here are a few of them:

• Shopping Guides that alert parents to which stores have which merchandise in which sizes, with inventory updates. You could even customize this by giving parents a way to key in their kid or kids’ size(s).
• Replacement discounts for parents replacing items their children have outgrown in selected categories . The outgrown clothes go to charity (with appropriate publicity), the parents save money on replacements of the same brand, and advertisers save on the cost of wooing new customers by incenting repeat ones.
• “Frequent student” programs like airline frequent flier programs. Families accumulate points for their purchases from the brand over the years and can redeem them for specific rewards (maybe even participation in state prepaid collefe tuition plans).

As you can see, there are lots of boats (or, more appropriately, school buses) that apparel, OSS, computer and other back-to-school marketers are missing. Maybe it’s time for them to go back to school themselves, take some refresher Marketing 101 courses and come up with ways to improve their schoolwork next year if they don’t want to be left behind.

Although 76 of the 100 Leading National Advertisers (LNA) cut their spending for 2009, that doesn’t mean they did less advertising. A new, previously unheard-of, phenomenon called media deflation has helped many do more for less.

One cause is that mass media are hemorrhaging audiences left and right. With newspapers, that’s old news, but as of the week of July 4, broadcast television – ABC, CBS, FOX and NBC – had the lowest number of prime-time viewers since 1990. Another cause is that many advertisers just aren’t advertising anymore; compare the thickness of any current newspaper or magazine with your recollections from just two years ago.

But media’s loss is advertisers’ gain. Following the law of supply and demand, media are cutting pricing to increase demand. Radio and television air time has historically been negotiable. This is because broadcast media, unlike print media, cannot contract or expand with advertising demand. There are 24 hours in a day and only so many minutes of advertising time per hour – and when that air time’s gone, it’s gone forever. That’s why all but the most naive advertisers have always negotiated down rate-card rates.

But now, even print media are negotiating too. And you can see the bottom-line effects of media deflation on many advertisers’ 10-Ks and annual reports. Anheuser-Busch InBev noted “media and advertising cost deflation in key markets.” Diageo says it took advantage of “media rate deflation” throughout North America. Kellogg reported that “media deflation” in Europe increased operating profits. Procter & Gamble, the world’s largest advertiser, said “media rate reductions” helped lower their marketing expenses as a percentage of sales.

And it’s not just the LNA. In its 10-K filing, Revlon reported cutting worldwide ad expenses by 10% versus 2008. They saved $24.8 million. But “as a result of achieving lower advertising rates,” they actually “increas[ed] the level of media support.”

In other words, more ads for less bucks.

If you’re a local or regional advertiser, you obviously don’t have the leverage of a P&G or even a Revlon. But you do have the lousy economy on your side. So before you conclude you can’t afford to advertise, throw away the old rate cards and look at the newest ones. Rates are probably lower. And then, take those rates as a starting point. When you talk to the media reps, negotiate. Bargain. Haggle.

You’ll be helping them fill their publication or station with ads. And you’ll be helping yourself to big savings. And, hey,  the worst they can do is say no.

Some 80 years ago, when William Wrigley, Jr., was on a business trip on a DC-3, another passenger asked him why he spent so much on advertising when his chewing gum business was doing so well.

“How fast are we flying?” asked Wrigley.

“Oh, about 150-200 miles an hour,” said the passenger.

“Then since we’re doing so well, why not shut down the engines?”

In deep recessions, when cash is tight, there’s a strong and justifiable temptation to cut back on expenses – or at least hold the line. But how much does it pay to yield to it?

The 100 Leading National Advertisers’ (LNA) experience from last year provides some empirical answers. As a whole, the 100 LNA cut advertising expenditures by 10.2% last year. This, incidentally, was the sharpest drop since Advertising Age started compiling LNA figures in 1956. But on-the-whole numbers can be misleading. If your feet are in the oven and your head’s in the freezer, on the whole you’re at a comfortable temperature. Breaking down the figures gives a clearer picture. Almost three out of four LNA – 74 out of 100, to be precise – cut advertising budgets or held them static. The remaining 26 bucked the trend and increased their ad spends. Eighteen of them – 70% of that group – saw their US sales increase. This compares to only half that proportion – 35% – of those who cut their ad budgets.

Most of the increased spenders were brands in low-price or recession-resistant categories (some both). Low-price brands included fast food chains (Subway’s franchisor and McDonalds), Progressive Insurance, which sells on the basis of lower cost through comparative shopping, and Walmart (more about them later). Recession-resistant categories included food and package goods (General Mills, Nestle, Hershey Company, Unilever); recession or no, people need to eat, stay clean and do laundry. They also included four pharmaceuticals firms  (Pfizer among them), because for most people health overrides wealth.

Two duelling satellite tv services (DirectTV and Dish Network) seem at first glance to be unlikely inclusions, but both advertise as lower-cost alternatives to cable (that fits low-price brands). One could also argue that entertainment is a recession-resistant category. Recall, if you will, that during the First Great Depression, movies were one of the few industries to prosper.

Apollo Group, owner of Phoenix University, increased ad spending enough to make the 100 LNA for the first time ever. This makes sense, too, because unemployed workers have the time to learn new skills, and what they learn might eventually make them more employable.

But of all the brands to invest in advertising in a recession, the biggest winner was Walmart. In 2007, Walmart was the nation’s 16th most advertised brand. Last year, it rocketed up to number three. For the first time ever, it was the nation’s top-spending retailer based on measured-media advertising, displacing Macy’s. Even though Walmart still spends less on advertising as a percentage of worldiwde sales than other major retailers, its percentage has been growing. Over the nine years from 2000 to 2009, it’s just about doubled – from 0.30% to 0.59%. Last year’s budget represented a 14.2% increase over 2008′s. In dollars, that’s $300 million more.

Did the investment pay off? Did it ever! In a year when national retail sales fell 2.1%, Walmart sales rose 1.6%.

Which goes to show that even in a deep recession, advertising is more a necessary investment than an expensive luxury. So if your business is looking to get ahead in these tough times – or just to keep afloat – consider the examples of Walmart and Wrigley. Don’t shut down the engines.

Kantar Media, a division of WPP, just finished compiling the 100 leading national advertisers’ (100 LNA) measured-media spending for 2009, Guess which medium got the lion’s share.

If you said Internet advertising, you’d be wrong.

The biggest, hottest new 21st Century advertising medium is…network television, where the 100 LNA spent  $23.62 billion on advertising, or 18.9% of the total ad spend, followed closely by that other hot new medium, magazines, whose $23.51 billion accounts for 18.8%.

Newspaper advertising was third, at $20.62 billion (16.5%).

The highest-ranked semitraditional medium was cable tv ($19.35 billion, 15.4%), which goes back to the 1980s. This was followed by spot tv, with $13.17 billion and 10.5%.

Internet advertising expenditures came in sixth, with $9.76 billion, or just 7.8%.

So does this mean the Internet is overhyped as an advertising medium? Not necessarily.

The Kantar figures represent total dollars, not number of advertisements, and rates for some media are substantially lower than others.

Even within traditional media, rates vary. Drive time radio rates are higher than night time. Prime time television rates are higher than daytime’s. Individual newspaper and magazine rates vary according to circulation.

Cable television as a whole has absorbed much, if not most, of network television’s audience. But you’d never guess it from the medium expenditure totals, because cable television ad rates are substantially lower than network television’s. They’re much closer to local radio’s. So selling many more commercial minutes than network television will still yield a lower dollar total.

Internet advertising has an entire different cost structure, where you don’t pay for the amount of time your message is on the medium, but for creating and attracting audience to it.

Hosting expenses are nominal.

Creative labor in developing sites and blogs and doing online public relations (e.g., placing stories about contests, offers, etc., on outside blogs) is the main Internet advertising cost. It’s not cheap, but it’s nowhere near the billion-dollar range. Ditto for creating e-mail blasts and e-newsletters to subscribers.

Creating banner ads and buying space on other sites are usually measured in thousands rather than millions of dollars.

Search engine optimization is tens of thousands, not billions. And pay-per-click campaigns are anywhere from a few cents to a few dollars per click. That can add to up tens of millions for one of the 100 LNA, but still not billions.

As a result, judging the Internet’s prevalence by total advertising expenditures can be misleading.

For a business that’s far smaller than the 100 LNA, there are two clear lessons:

First, the same low costs that lower the Internet’s standing in the annual 100 LNA expenditure totals make it one of the first advertising media a local advertiser can afford to turn to.

But you shouldn’t neglect more traditonal media.

The 100 LNA – companies that have grown and prospered through advertising and know what they’re doing invest heavily in newspaper and cable, spot and network (for a Richmond advertiser, network-affiliate) television.

Before deciding to shoot the works on Internet, it pays to consider their example.

Here we are, still in baseball season, and Fox has already sold 80% of next year’s Super Bowl advertising time. To call this unusually brisk sales would be a gross understatement, especially in view of previous years.

It took CBS, for example, three months longer to reach the 70% mark for this year’s game (i.e., in September).  What’s more, many advertisers deserted the national ad buy to save money by going spot or regional. The network had to resort to last-minute discounting to finally unload all the advertising inventory. The Super Bowl before that, NBC had sold only 30% of its ad time by June. So what gives?

You’d think that a rotten economy would leave national advertisers with less money to spend in $3 million bursts, not more. But 2010′s Obama Recession is deeper than 2009′s Bush Recession, and in early 2008 the real estate and financial bubbles had not yet burst. Despite that, national advertisers are spending like it’s 2007.

You might say that maybe Fox Network did a better or more aggressive selling job than the two alphabet networks. But if their salesmanship’s that great, how come the last time Fox aired the Super Bowl – 2008 – it took them all the way to October to sell 90% of the air time?

You can’t say it’s the pricing. This past January, CBS had to resort to last-minute discounting to get its remaining air time sold. But Fox’s reported 80% sales are all at rate-card rate. They’re asking, and getting, between $2.8 and $3.0 million – call it an average of $2.9 million – for 30 seconds’ air time. That’s more than the previous discounted $2.5 million for this year’s game and about the same as NBC was getting for last year’s.

Television is no longer the humongous audience magnet it used to be. Former ratings blockbusters “Lost” and “24″ were recently canceled due to lack of viewer interest, and “American Idol” is on the block for the same reason, as the Internet continues to eat away television viewership.

It may be that the paralyzing shock of last year’s financial trauma has morphed into a kind of normalcy. For example, Government…er, General Motors, having borrowed taxpayer dollars to run a national television campaign about how they paid back all the borrowed taxpayer dollars, will be returning with commercials for their surviving car lines.

This year’s Super Bowl drew an all-time high audience, reaching an average of 106.5 million viewers, which broke the record previously set by the “M*A*S*H” series finale back in 1983.

When you get down to it, the explanation may be very simple: The annual Super Bowl telecast has uniquely managed to defy the downward trends of television viewership. So maybe it’s just the audience.

Each ad you run gives you one shot at your target audience, so it makes sense to use all the ammunition you can, right?

Wrong.

True, there’s a lot you want prospective customers to know about your business, but putting it all into one data dump of an ad will hurt far more than it helps. People aren’t sitting around waiting for your ad so they can study it and take copious notes. It’s only one of 1,800 sales messages they’ll be bombarded with today.

In any given publication, the most noticed ad gets ignored by 54% of the readership. Of those who notice it (i.e., see the headline, visual and logo), only 10% – 4.6% of the total audience – will read even some of your body copy.

Your business has many good things going for it, most of which potential customers couldn’t care less about. (One local company that builds closet shelves loves to harp on being family owned. Is that why consumers buy closet shelves?) Similarly, consumers have many wants and needs, only some of which your product or service can fulfill. You need to determine where the two overlap, so you can say what you have that solves their problem.

You need to do it on their terms, so the ad talks about them and their needs, instead of being an extended “About Us.” You need to boil that message down to its single most important essential and make that the basis of your headline, where it will have the best chance of being noticed.

The rest of your ad should support your main premise – single-mindedly and briefly; nothing repels the eye like an ad wall to wall with type. You’ll waste far less ammo – and be far more likely to hit the target.