Has The X Factor lost its shine as a big time advertising slot?

The X Factor isn’t just about selling pop music. It can also help shift anything from broadband to yoghurt for its advertisers. And this time around judge Tulisa Contostavlos isn’t even waiting for the ad breaks to peddle her perfume - a tattoo up her arm ensures her brand’s on show throughout.

It hasn’t necessarily done her much good though. Almost four million fewer people (24%) watched Sunday’s final than last year’s. So, with the BBC’s rival talent contest Strictly Come Dancing chasing hot on the heels of The X Factor, is the show giving the boost to brands it should?

The sales performance of Yeo Valley, which has spent half its £5m marketing budget on X Factor advertising in the past two years, would initially suggest not. In October 2010, it bought a 90-second slot for its ‘Rapping Farmers’ ad against a Saturday edition of The X Factor, following it up with additional ads and the launch of its own YouTube channel ‘YeoTube’.

However, after an initial sales uplift, value sales of the largest part of its business - its yoghurts - have fallen 3.4% over the past year, although milk and butter sales rose 8.6% and 4% [Nielsen 52w/e 2 October].

Hardly a ringing endorsement of its ads - until, says managing director Tim Mead, you look at organic dairy overall, which has seen sales slump.

Looked at in context, the ads have had a positive impact, he says. “What we spent in eight weeks on The X Factor is what Müller and Danone spend pretty much every eight weeks,” he says. “We’re pretty pleased with our performance. The result on milk is particularly pleasing. The organic milk market is down so we’re bucking the trend.” And he’s confident this year’s ad featuring boyband The Churned will have an even bigger impact. “Last year’s was more appealing overall but this year’s has been a big hit with the people who actually do the shopping.”

But many experts question whether future shows will have the pulling power previous ones have had. While brands could once do no wrong associating themselvs with The X Factor, as M&S demonstrated this year, not everyone’s been a winner this year.

The show has also attracted some unwelcome publicity. Last week, Iain Duncan Smith criticised its ‘get-rich-quick values’, blaming this summer’s riots on the sort of cultural values it embodies.

Such concerns could do more damage than falling viewing figures, warn experts. “I’d be far more worried about links with the riots than waning public interest,” says Richard Buchanan, director at branding agency The Clearing. “If it gets dubbed the ‘chav talent show’ Middle England will walk away and so will advertisers.”

There’s no sign that’s happening yet, however. Ferrero claims the Tic Tac campaign offering X Factor tickets it launched in September has been an “absolute success”, helping to address the 7% fall in value sales the brand experienced last year [Nielsen 52w/e 2 October].

“Although we’re still waiting for the final figures, early indicators are very encouraging,” says a spokeswoman, pointing to an 11% hike in sales in the Co-op. “We’ll be looking at ways of working with The X Factor again in 2012.”

As will Mead. That’s if there is a show next year. As a former exec at Sony, which owns half of The X Factor production company, Syco says: “Every show has its shelf life,” he says. “It will be dead in three years.”