AD BUDGET GROWTH TO KEEP GOING: SCHONFELD STUDY CREDITS INTERNET FOR RISE IN 2000

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[riverwoods, ill.] The year 2000 promises to be a strong one for advertising, according to Schonfeld & Associates' 23rd annual Advertising Ratios & Budgets report.

The pharmaceutical industry will increase spending 3.1% in 2000 and reach the $14.8 billion mark. Direct-to-consumer marketing of prescription drugs has contributed to the predicted increase.

Healthcare and medical advertising will continue to surge. Skilled nursing care facilities will increase spending 12.5%. Ad spending by specialty outpatient facilities is expected to jump 17.6%.

TELECOMMUNICATIONS SURGE

Ad growth by telecommunications service companies will be up 9.9% in 2000, with estimated spending of nearly $24 billion. The ongoing reconfigurations of major players in this industry will help drive the advertising. Spending for wireless communications services is expected to rise 21.9% to $ 2.3 billion.

Data communications is the fastest-growing business area of many phone companies. The explosive growth in the use of the Internet translates into increased demand for their phone circuits.

PC marketers will increase ad spending by 10.5%, and ad growth for prepackaged software will rise 12.2%. Much of this growth will be due to increased marketing for Internet software and services.

In more traditional areas, advertising by retailers reflects continuing consumer confidence in the U.S. economy. Department stores will spend $6.2 billion in 2000, up 5.3%; direct-mail catalog advertising will surge to $3.5 billion, up 10.6%.

Large, diversified food companies are expected to spend just under $16 billion in 2000, down slightly from 1999's $16 billion. The 137 restaurant chains in the study will average 6.6% ad growth and spend a total of $3 billion in 2000.

The top ad spender next year will be Nestle, with an estimated allocation of $6.7 billion. More than 250 major non-U.S.-based advertisers are covered by the study, including Nestle, Unilever and Sony Corp.

The first non-manufacturing company in the list of top 10 advertisers, Walt Disney Co., will spend $3.5 billion in 2000, an increase of 8.5%.

The Schonfeld report covers more than 6,700 individual companies, representing

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