U.S. advertising spending rose 4.8% to $83 billion in 2002

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Advertising by the nation's top 100 advertisers returned to some semblance of normalcy in 2002, rising 4.8% to $83 billion to put behind them a numbing 2001 in which their total ad spending dropped 1.3%, the first decline in 10 years. The rise in large part is attributed to greater spending in measured media by these elite marketers, up 7.2% to $46.25 billion, according to Advertising Age's 48th annual report on the 100 Leading National Advertisers. TV in all its forms-network TV, spot TV, cable TV and syndicated TV-proved pivotal, claiming $28.66 billion, also up 7.2% from 2001. TV accounted for 62% of the 100 Leaders' media expenditures for both years. Ad Age media totals are provided by TNS Media Intelligence/CMR.

However, the 100 Leaders were slow to re-ignite unmeasured forms of advertising and marketing. Ad Age estimates this unmeasured portion, from direct response and sales promotion to telemarketing and event marketing, grew 1.9% last year to $36.75 billion. By contrast, in 2001 unmeasured grew 3.6% from 2000 as media slipped 5.2%.

Much of unmeasured marketing tends to be project-related. In the wake of Sept. 11, many agencies saw direct and sales promotion work get cut during the fourth quarter of 2001. The prevailing gloom of that quarter carried over into planning for 2002 promotion work. In that environment, marketers took a more traditional approach by using TV to get messages across.

A rebound in sales of Top 100 marketers-up 6.6% worldwide compared to collective growth of only 2.7% in 2001-obviously stimulated their ad budgets because advertising spending typically holds a consistent ratio to sales in most companies.

As a barometer of the nation's ad power, the Top 100 remain strong in good and in bad times. In 2002, their media budgets contributed 35% of the nation's total media expenditures, the same as in 2001. But 2002 was much more upbeat than 2001: 29 of the 100 Leaders cut their ad spend in 2002 versus 59 in 2001.

LEADERS SHOW THE WAY

In first quarter 2003, total media spending proved captive to depressed economic indicators and war concerns, advancing to $22.24 billion for all advertisers, only 2.8% over the same prior-year period. By contrast, media outlays by the 100 Leaders in that period rose 5.5% to $10.46 billion. Removed the 100 Leaders from the nation's media pot for the first quarter, and media spending would have grown a lean 0.4%.

General Motors Corp. in 2002 continued to lead all advertisers in spending at $3.65 billion, up 8.5%, but still not even with its 2000 level of $3.93 billion. Sandwiched between those years, in 2001, was a 14.5% drop in spending by the nation's leading auto marketer. Most of GM's leading megabrands in 2001 suffered from 20% to 30% spending declines in media, while in 2002 only Pontiac among its major vehicle brands slipped in spending.

AOL Time Warner finished a strong No. 2 at $2.92 billion, up 3.3%. It backed 16 brands with at least $10 million-plus in spending for each, most of it behind America Online, New Line Cinema and Warner Bros. The two movie studios accounted for 24% of the $3.14 billion in media spent on all movie advertising in 2002.

P&G NOW NO. 3

Procter & Gamble Co. took the No. 3 slot at $2.67 billion, infusing at least $10 million behind each of 44 brands-the most brands at that spending magnitude at any company in the U.S. There were 545 brands with at least $10 million in media spending supported by the 100 Leaders.

In 2002, a Top 100 marketer had to spend in measured media and unmeasured forms of advertising at least $311.5 million, the amount of No. 100 Office Depot. That base line grew substantially from the $285.4 million recorded by Dillard's in 2001. Joining the list in 2002 were No. 92 United Parcel Service, No. 94 Nextel Communications, No. 97 Kohl's Corp., and No. 98 Fortune Brands. Two others joined by virtue of splitting off from two returning 100 Leaders-No. 68 SABMiller, which gained Miller Brewing Co. from Altria Group in 2002, and No. 48 Burger King Corp., the former Diageo unit sold earlier this year to Texas Pacific Group.

Departing 100 Leaders were Gateway, Marriott International, U.S. dairy producers, State Farm Mutual Automobile Insurance Co., Hilton Hotels Corp. and Dillard's.

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