45th Annual Report: 100 Leading National Advertisers

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General motors Corp. raised the bar on U.S. advertising volume in 1999, pouring $4.04 billion into media and below-the-line marketing as it laid claim to the nation's largest advertiser, according to Advertising Age's 45th annual 100 Leading National Advertisers report.

GM's ad deluge, capping the report's previous high of $3.1 billion in 1998, also set by GM, meant it drew $32.19 in U.S. revenue per ad dollar, low compared to the No. 2 U.S. auto marketer, Ford Motor Co., at $68.56. Refined to vehicle returns, the auto monolith spent $133 million in vehicle advertising to gain one market share point, more than double Ford's outlay of $61 million per share, casting a shadow on the effectiveness of the voluminous spending ratio.

Meanwhile, the 100 Leading National Advertisers advanced 11.7% in spending to $73.8 billion. GM's growth of 34.2%, though stunning, rated only 16th in size among this year's group.

Growth-busters were paced by Hewlett-Packard Co., which saw spending accelerate 90.6%; closely behind is Charles Schwab & Co., up 89.1%. Other big gainers include Dell Computer, 69%; Intel Corp., 64.3%; General Electric Co., 61.3%; and Alltell Corp., 52.4%.

This ad onslaught crosses industry categories, showing the general influence of the robust economy on the marketing dollar.

Only one of the six top media ad categories ranking all advertisers by volume failed to grow faster in 1999 than in 1998: Telecommunications, up 17.7% versus 21.2% the year before, according to Competitive Media Reporting.

Financial ad spending expanded 23.8% vs. 15.1% in 1998; movies & media, 15.9% vs 8.7%; medicines (over the counter and prescription), 14.8% vs. 7.8%; retail, 11.4% vs. 8.3%; and automotive, 9.5% vs. 5.6%.

As the economy steams ahead, media spending keeps perking, up 15.5% in first half 2000 for all advertisers, according to CMR, whose numbers include 11 major media. Among this same media set in 1999, the Top 100 claimed 46% of total U.S. media spending, up from 45% in 1998. Little doubt, the Top 100 are leading media's push for olympian heights this year.

TESTAMENT TO BRAND BUILDING

The 100 Leading National Advertisers are a testament to brand-builders. They supported 586 brands with at least $10 million each in media spending and about as much in unmeasured advertising.

Spending by the Top 100 and second 100 (see charts on Page S-2 and S-4) is a combination of measured media and unmeasured forms of advertising (sales promotion, direct response, etc.) estimated by Ad Age.

This year's Top 100 reaches to No. 100 Nabisco Group Holdings Corp. at $263.8 million advertising. Proving a Top 100 dynamic is change, Nabisco won't make next year's list because its advertising will be lumped into that Philip Morris Cos., its soon-to-be parent.

List movement, tied largely to advertisers' ongoing support for their megabrands, also is a factor of mergers and acquisitions.

ENTER VERIZON

Verizon Communications is the consolidated entry this year for two previous Top 100 companies in 1998, Bell Atlantic Corp. and GTE Corp. Their combined spending is actually off 5.3% from '98, though an image-building inaugural campaign this year is spreading $300 million into media and other forms of advertising that will likely send Verizon spending back into the growth column for next year's report.

Reckitt Benckiser vaulted into the elite group as a result of the merger of Joh. A. Benckiser and Reckitt & Colman, two second-100 members from 1998. Pfizer got fatter with its acquisition of Warner-Lambert Co.

Ad Age treats ad spending pro forma, adding or subtracting spending for two consecutive years for acquisitions and divestitures. Such treatment stuffed the ad chests at Viacom with marketing dollars from the acquired CBS Corp., and Ford Motor Co. with the marketing budget of Volvo A.B. Both CBS and Volvo were second 100 companies.

Ralston Purina Co. remained among the 100 even though its ad volume dropped 30% from 1998 levels due to the loss of Energizer batteries, spun off into Energizer Holdings.

The big impact on GM spending was strategic: A veritable ad blowout in the nation's newspapers. GM hiked newspaper spending by 235% to $501.3 million. Newspaper, a medium that responds quickly to market conditions, was the anointed medium on which GM planned to build floor traffic and market share.

TV CUTS SHOWN

Among media volume leaders for the 100 Leaders -- network TV, magazines, spot TV, newspapers and cable TV -- network showed the most erosion, declining from 73% of all network TV spending in 1998 to 71% in '99. Twenty-eight Top 100 companies reduced their network budgets; 39 did so with spot.

Greater demand, shrinking inventories, higher prices and more commercials could be abetting a defection. Big-time network spenders like Unilever and Procter & Gamble Co., both of which reduced network and spot spending, are using media dispersion strategies to find network's reach in a broader, less-expensive media mix.

Any wholesale defection isn't imminent, though. Network TV grew 15.9% in first-half 2000 for all advertisers vs. 10.6% growth for full-year '99, and spot, infused with political ads and stronger TV fare from early and late newscasts to network's reality programming, is up 16.7% vs. an 0.6% decline in full-year '99.

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