An Ad Age Annual Special Report

LEADING NATIONAL ADVERTISERS REPORT

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CHICAGO (AdAge.com) -- The nations' top advertisers ignited growth in the nation's media in 2003 by scoring a resounding 9% growth in their U.S. advertising to $90.31 billion, according to Advertising Age's 49th annual 100 Leading National Advertisers' report.

General Motors Corp. once again led the nation in total advertising at $3.43 billion, down 1.4%. Closing fast was No. 2 Procter & Gamble Co. at $3.32 billion, up 24.3%. P&G would have caught GM with ad growth of 28.3%. In 2004, it seems poised to reclaim the ad crown it lost to the automaker in 1997.

Driving the ad-spending growth in 2003 were marketers in four key Top 100 categories -- pharmaceuticals, claiming $12.13 billion in total advertising, up 14.3%; entertainment and media at $10.9 billion, up 11.1%; personal care, at $8.09 billion, up 9%; and telecommunications, at $7.6 billion, up 15.3%. Autos, the biggest ad category at $13.78 billion grew only 5.4% in total advertising from 10 automakers in the Top 100. Advertising not only dropped at GM, but fell 0.8% at No. 6 Ford Motor Co.

33 billion-dollar spenders
This year's ranking reached to No. 100 Canon at $317.2 million and included 33 companies with U.S. ad spending above $1 billion (25 in 2002). These advertisers supported 549 brands at spending levels exceeding $10 million each.

The data show these powerhouse marketers increasing their advertising at a faster clip than their growth in sales, confirming the bromide in 2003 that when times get tough, the tough step up their marketing. And times have been difficult. The 9% spurt in ad spending compares to 4.8% growth by the Top 100 in 2002 and a 1.3% decline in spending in 2001 when the U.S. slipped into recession.

The backbone of media
The Top 100 remain the backbone of the nation's media. Of their $90.31 billion in total advertising, measured media accounted for $52.21 billion, up 9.3% -- representing 40.7% of the nation's total media spending. This compares with 39.5% of total media contributed by the Top 100 in 2002. Such ad growth from these leading spenders meant media spending from remaining advertisers grew a much slower 4.1%.

The Top 100's unmeasured component hit $37.97 billion, up 8.7%. Unmeasured represents all forms of non-media ad spending such as direct response and sales promotion, telemarketing and event marketing. Unmeasured spending is estimated by Ad Age.

Measured media include 15 media tracked by TNS Media Intelligence/CMR plus Yellow Pages provided by the Yellow Pages Integrated Media Association. TV advertising pulled in the lion's share of measured spending at $31.87 billion, up 6.5%. This represented 61% of the Top 100 total, and accounted for 59% of the nation's total TV pot, which in this report is a combination of network and spot TV, Spanish-language TV, syndication and network cable.

Back on track
The nation's media are back on track after declining a precipitous 7.8% from all advertising in 2001 (a drop of 5.2% for the Top 100).

Growth in the worldwide ad-to-sales ratio also was recorded by the 54 companies in the Top 100 that reported global ad costs. That ratio rose to 3.8% from 3.7% in 2002 as sales grew an average 6.2% and advertising an average 8.4%. The ad-to-sales ratios for these same companies in the U.S. would be higher given the price of media and the sheer volume of ad vehicles in the market. U.S./North American/Americas revenue represent at least 50% of revenue totals for 65 of the Top 100.

P&G, fortified with 46 brands on which it spent at least $10 million in measured media in 2003, was the pacesetter in the personal-care category, which notched a collective $4.72 billion in measured media, up 12.6%. The seven Top 100 companies in the category account for 94% of all U.S. media spending in personal care, according to TNS Media Intelligence/CMR. P&G competitor Unilever (No. 17) reduced its measured spending in 2003 by 18.8%, much of that from its Slim Fast line of products -- down 33.8% to $82 million.

Verizon: most-advertised brand
The telecom category, comprising nine of the Top 100, hit $5.26 billion in measured media in 2003, up 15.8%, and accounted for 94% of all measured spending by telecoms in the U.S. Verizon Communications (No. 11) led this group at $1.2 billion, up 9.6%. This expenditure is the entire Verizon brand, the most-advertised brand in the U.S.

Entertainment and media drew $6.59 billion in collective measured spending, up 10.8%, from six of the Top 100.

Pfizer (No. 4), supporting 22 brands at $10 million or more, led the Top 100's drug category growth of 14% to $5.3 billion. Pfizer's largest media expenditure was $115.1 million for Zoloft. That ad investment, accompanied by heavy spending among the Top 100 on 548 other sizable brands, certainly appears the antidote needed to lift U.S. media.

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