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Rise in ad spending seen in Q4

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Fourth-quarter ad spending is expected to be up this year over last, as many b-to-b advertisers launch ad campaigns for new products and reposition their brands.

GE, Intel and Kodak are just a few advertisers launching new campaigns aimed at business users in the fourth quarter.

"Typically, advertisers spend more in October during the back-to-business period," said Kevin Arsham, b-to-b specialist and associate director of strategy at OMD, a media buying agency that is part of the Omnicom Group of Cos. "It's time to reinforce the message companies had before the summer and get people thinking about new product introductions." Although he declined to name specific clients, Arsham said these b-to-b advertisers typically spend more in October than in November and December. "The problem with November and December is that it is the holiday period, and we try not to put too much weight in that time period if the reader isn't going to be there," he said.

One exception to that rule is Intel, which plans to capitalize on the holiday season with a major new campaign for its Centrino mobile technology. The campaign, with the theme "Reveal," was launched Sept. 27 and includes TV, print, online and outdoor ads, featuring performance artists Blue Man Group. It is aimed at business users and consumers.

"Leading up to the holiday sales period, we want to continue to build awareness and differentiate Centrino as a key ingredient for mobile commuters," said Sean Connolly, worldwide advertising manager for Intel.

"We are targeting potential laptop users, whether it is for business or home use," he added. Connolly declined to comment on Intel's fourth-quarter spending plans, but he said the fourth quarter is typically a strong one for the semiconductor company.

Intel plans to use more streaming media in the fourth quarter, featuring its Blue Man Group TV commercials online, e-mail, microsites and online promotions, such as a partnership with Yahoo! to provide maps of WiFi "hot spots" for mobile laptop users. The Centrino campaign was developed by Euro RSCG MVBMS. (Intel's worldwide advertising account is currently in review.)

Other Q4 campaigns

GE in September launched a new online campaign, part of its "Imagination at Work" campaign, that will run during the fourth quarter. The new campaign, developed by GE's agency BBDO Worldwide, is an extension of the "Pen" online campaign that allows users to draw images on the computer screen and send them to colleagues and friends.

"It's a brand-building campaign designed to connect the GE brand to creativity and imagination," said Jonathan Klein, a GE spokesman. "It improves on the original `Pen' campaign by adding new functions, such as allowing you to collaborate with two other people in real time," he added.

GE will not roll out new broadcast or print advertising in the U.S. in the fourth quarter, although it will launch new outdoor ads in Europe and Asia.

Eric Mower & Associates, a b-to-b agency based in Syracuse, N.Y., will roll out campaigns for Kodak Graphics, Southwire Co. (a Carrollton, Ga.-based building wire company) and Lenox, a unit of Newell Rubbermaid.

"Generally, we're seeing spending levels rise," said John Favalo, managing partner of Eric Mower.

"Construction is particularly robust, as well as factory automation and automotive b-to-b," he said. "One of the most notable areas is new product development."

For example, Southwire is launching a campaign to introduce a new feature for its Romex brand of wiring.

"This is probably the most important campaign launched by this company in the past 25 years," Favalo said. "The Romex name has become almost generic to describe building wire for homes, and this campaign seeks to reclaim the brand from commodity status and differentiate the brand based on a new feature."

Favalo said that more of his clients are investing in R&D this year to launch new products and brand extensions.

Positive mood

Gary Slack, chairman of Slack Barshinger in Chicago, said his clients will be spending more in the fourth quarter. "The mood is very positive," Slack said. "Spending is going to be greater, budgets are larger and confidence is greater." Slack added that his clients are using more direct marketing and lead generation.

Carl Anderson, president-CEO of Doremus, agreed that b-to-b clients are launching more targeted marketing efforts. "It's less about big, broad corporate ad campaigns and more about how to get the message in front of the key constituency in the most efficient and effective manner," Anderson said. He added that client spending will be up in the upper single digits in the fourth quarter of 2004 compared with the fourth quarter of 2003.

"Agencies have to be much more responsible and intelligent in how they help clients deploy their marketing communications messages," Anderson said.

For example, Doremus is being more strategic in the use of trade shows for b-to-b clients that are competing with larger brands.

For ITT Industries, which competes with GE in the water treatment industry, Doremus used a "domination strategy" at the AquaTech water industry show in Amsterdam Sept. 27-Oct. 1.

The agency ran ITT flags on 27 flagpoles outside the entrance to the convention hall, a 20 meter-by-6 meter banner at the entrance to the convention center, sticker ads on approximately 18 steps leading to the registration area, window-shade ads in the hallway and mobile billboards outside the reception areas.

"We are going up against GE Water Technologies, which has a much bigger budget and TV ads," Anderson said.

"You can steal a category by being strategic with creative," he added.

TNS Media Intelligence/CMR predicts ad spending will be up 9.2% in the second half of 2004 compared with the second half of 2003, driven by the elections and the Olympics. Overall for the year, total ad spending is expected to be up 9.3% over last year. M

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