MORE GAINS FORESEEN FOR '95 AD SPENDING

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National advertising in most media this year should again match or outpace overall economic growth, but TV will be hard-pressed to post significant gains coming off the 1994 Olympics and elections.

The upward momentum in local ad demand should continue this year as the improvement in retailing spreads to all regions of the country and as more local marketers regain their competitive confidence. We expect local entrepreneurs to realize sales gains of about 6% with advertising commitments rising at least 7% this year.

The recovery in local ad budgeting was more delayed than the turnaround in national advertising.

And in 1996 the extra stimulus from elections and the Summer Olympics will be back and competitive advertising noise levels should surge again. Many leading brands may prove to be seriously under-advertised if they fail to restore some of the recent severe ad cuts. The resumption of the traditional role of advertising is clearly now well under way.

Last year marked a miniboom in advertising, as the industry finally felt the effects of a gradual economic expansion.

Advertising by national marketers reached $87.3 billion in 1994, a 9.1% gain. The elections and Olympics helped to fuel double-digit increases in TV ad outlays for the largest annual rate of growth for this medium since 1984. Budgets in other media still managed to post high single-digit gains. In 1994, national marketers' ad budgets had their largest gain, relative to the growth in the economy, since 1982.

Local marketers also increased their ad expenditures at a much larger rate than they had for years. Late in 1993, consumers finally regained confidence in their job security and shifted from paying down debt to spending more at retail to satisfy pent-up buying demand. Finally in 1994, for the first time in years, local advertising growth outpaced the economy, rising by 8% to $62.7 billion.

U.S. advertising totaled $150 billion, up 8.7%. In 1994, U.S. marketers reaffirmed the importance of advertising and the industry's outlook is far brighter than it has been for years.M

Mr. Coen is senior VP-director of forecasting, McCann-Erickson Worldwide, New York.

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