Not since 1991 had total advertising, and that of the Top 200 as well, suffered year-to-year declines, according to the 11 media measured by Taylor Nelson Sofres' CMR.
The power of the Top 200 is true to form as these top megabrands have always had a pivotal role in the nation's total ad market. In 1991, total advertising fell 8.1% and the Top 200 slid just 1.2%. In spending $32.61 billion in media, these elite megabrands claimed 36.3% of total U.S. media, up from 33.3% in 2000.
The AT&T megabrands, which led all advertisers in 1991 at $389 million in media, did so again in 2001, spending $996.6 million, an aggregate for AT&T and AT&T Wireless. The latter, spun off from AT&T Corp. last year, strategically maintains its AT&T brand legacy. The megabrand increased spending 26.3% in fierce competition in the telecommunications sector, and shows no signs of slowing down with this year's mLife campaign for AT&T Wireless.
Category companion Verizon finishing second among the 200, the first one-two punch for the 200's telecommunications category in this report. Telecom megabrand ad dollars in the Top 200 grew to $3.61 billion, up 36.8%, best growth among 200 Megabrand categories. AT&T, Verizon, Sprint and Cingular Wireless together hit $2.85 billion, up 44% from the previous year. The telecom category has steadily increased its weight, contributing 11% of 2001 Top 200 dollars, compared with 4.2% in 1991.
The automotive category in the Top 200 continued to be the biggest buyer of network TV, spending $2.1 billion in the medium. In fact, the Top 200 account for 57% of the nation's network TV investment.
AUTOS DOWN 10%
Auto marketers, the cornerstone of the Top 200 brands, cut back at a pace in line with all advertisers, dropping 10% to $7.73 billion. Chevrolet, last year's leader, slipped to third, a decrease typical of other auto makes: seven of the top 12 megabrands were autos, but only Ford increased its ad dollars.
General Motors Corp. slashed ad support by 25% in 2001. This included severe cuts in newspapers, down 41%; magazines, off 20%; and TV, off 26%. The economic downturn inspired GM to offer aggressive 0% financing in late 2001. The strategy did result in a record number of unit sales in October 2001, but in the first six months of 2002 GM's market share has slipped almost two points from the end of the year to 25%, according to Ad Age's sibling publication, Automotive News.
Among all advertisers, all but two of the 11 media measured by CMR were off. Magazines dropped 7.2%, and newspapers, 6.3%, as auto marketers pulled out of magazines and the classified and help-wanted sections of newspapers thinned. Spot TV declined 18.9% to $14.1 billion. Only cable and syndicated TV advanced, each by less than 1%.
Retail remained the second-largest 200 Megabrand category, backed by $5.33 billion. Off 2.6%, retailers tightened their ad budgets in response to declining sales. Sears, Roebuck & Co. boosted its budget by 67% to $511.5 million under new marketing chief David Selby. It also shifted its strategy, moving 22% more money into TV and investing 20% less in newspapers. Beleaguered Kmart scaled back its advertising 9.4%, underwent several executive changes and filed for Chapter 11 bankruptcy protection last January.
BURGER JOINT BLUES
Fast-food burger chains likewise recast marketing plans and personnel. Decreased outlays at megabrands McDonald's, Burger King and Wendy's hit TV the hardest, down 11.4% for all forms of broadcast. TV claims 91% of their combined spending. These megabrands largely effected a 4.9% decline in the 10-member category. One of the segment's brighter spots was the Subway megabrand, its spending up 34%, largely behind the low-fat message via the "Jared" campaign.
Financial services, which spiked 27% in 2000, deflated in 2001. Ad outlays dropped 21.4% for the Visa megabrand, 8.5% for MasterCard and 33.4% for American Express as the travel industry felt the effects of the Sept. 11 terrorist attacks.
As the financial markets cooled off throughout the year, brokerages trimmed their advertising. The Charles Schwab megabrand budget was cut in half; the financial services segment for the 200 sagged to $2.56 billion, down 4.9%. Only State Farm Insurance megabrand boosted its media purchases, and that by a whopping 81.9%.
The big direct-to-consumer drug megabrands pushed the Top 200 drug segment to $1.37 billion, up 23%. Merck & Co.'s Vioxx osteoarthritis remedy topped the category at $135.4 million. There were only two over-the-counter megabrands on the list, Wyeth's Advil and Johnson & Johnson's Tylenol.
Growth in total dollars for 2002 will continue to rely on the ad stimulus provided by this DTC category, the telecom sector, particularly its wireless subsector, and the lumbering auto segment. However, a rebound of 5.5%-growth attained in 1992 over recession-plagued 1991-seems utopian.