LEADING NATIONAL ADVERTISERS;TOP MARKETERS INVEST $47.3 BILLION IN '95 ADS : STRONG 9.3% GAIN POSTED DESPITE NON-EVENT YEAR; OTHER VEHICLES SEE 10% GROWTH

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The 100 leading National Advertisers spent $47.3 billion on advertising in 1995, a strong 9.3% gain, according to Advertising Age's 41st annual report.

The media portion of the top 100 hit $27.6 billion, an 8.5% advance that was economy-driven since it lacked the media magnet of an Olympics or a general election-events that helped elevate media 10.9% for the comparable year.

The major advertisers continued to rely heavily on unmeasured marketing activities, with growth of 10.5% compared to 11.6% in '94. Unmeasured spending is largely the so-called below-the-line vehicles that encompass direct mail, sales promotion, co-op advertising, couponing, special events and the like.

HIGHEST-EVER VOLUME

The '95 ad volume is the highest ever among the 100 leaders; the overall growth rate is just two-points off 1994's 11.2%, and remains one of the best.

Procter & Gamble Co. clung to the No. 1 position, with $2.78 billion in total advertising, up 3%, with Philip Morris Cos. second at $2.58 billion, up 8%.

P&G's spending is so broad-based that the company funneled $10 million or more in media expenditures into each of 46 mega-brands, while PM did the same for 27.

In all, 423 megabrands from the top 100 advertisers received such media exposure in '95, according to totals massaged from Competitive Media Reporting's 11-media composites.

Spending became more compressed among the leaders as the cutoff was marked at $134.1 million by No. 100 Abbott Laboratories, compared with an entry point of $120.7 million the previous year.

NEW TO THE CLUB

Eight new members of the 100 emerged in 1995, and most of these were in industries where advertising was on high boil all year: computers, entertainment and media, telecommunications, cosmetics and pharmaceuticals.

These new leaders largely came from the previous year's Second 100 list prepared by Ad Age.

This year, that second-tier ranking (see Page S-53) spans marketers from Canon Inc.'s $133.9 million ad total to Bausch & Lomb's $59.7 million.

The Second 100's ad total of $8.8 billion added to the top 100 credits these two lists with 36% of the nation's total media advertising outlay, pegged at $160.92 billion by noted authority Robert J. Coen of McCann-Erickson Worldwide.

MICROSOFT'S EFFECT

Microsoft Corp. rode onto the top 100 for the first time, at $268.6 million in advertising, a 144.3% jump in spending tied mostly to the fourth-quarter introduction of Windows 95. This gale-force spending on software (including its Excel spreadsheet program) triggered wholesale category spending increases.

IBM Corp., in particular, boosted total spending to $419.8 million, up 48.2% in support of its PCs, software and newly acquired Lotus.

Intel Corp.'s "Intel inside" campaign, largely a co-op venture, flourished as well. Its $300.1 million in co-op dollars is charted as unmeasured spending in this report, and when compared with Intel's measured media spending of $39.8 million means that for every dollar Intel spent in media, it dished out $7.54 below-the-line. Its unmeasured figure is 88.3% of its total, the largest such share among the 100.

Metro-Goldwyn-Mayer raced onto the charts as if it were Scarlett O'Hara meeting another day. MGM spent $210.2 million in total advertising, up 165.7%. Its box-office share rose from 2.8% to 6.2% as moviegoers were offered five more MGM/UA releases than the previous year.

MGM is part of the eight-member entertainment and media category among the 100, and in that category total ad spending hit $4.9 billion, up 27.4%. Reasons for such growth are manifold (see story, Page S-22), not the least of which are higher TV rates for "must" coverage on NBC-TV's hot Thursday lineup and that of other media outlets. Movie ads on this evening are previews for weekend release.

PULLING IN THE REINS?

While ad growth among studios seems locked in perpetual motion, leader Walt Disney Co. plans to pull in the ad reins in '97. It has reason to be circumspect: Disney spent 50% more per share point in '95 than in '94 and saw its market share drop 0.6 points.

Two new players entered the top 100's seven-member telephone category, BellSouth Corp. and GTE Corp., each with ad spending growth considerably higher than the category's 4.9% uptick to $2.52 billion.

Advertising at category leader, AT&T Corp., actually slipped 3.7% to $1.06 billion as it became leaner for the new competitive frontier by splintering into three companies.

The Telecommunications Act of 1996 further changed the telco landscape and has set the stage for a new battle royale in advertising.

Analysts say the Baby Bells, which can now offer long-distance services and operate cable systems within their service areas, will need to match the long-distance companies ad dollar for ad dollar to crack that market.

EASY TO STOMACH

Abbott Laboratories rode an 86.2% media spending spree behind Ensure ($43.9 million in media in '95) onto the 100, where it joined 10 other pharmaceutical companies contributing $4.96 billion in advertising, up 18%.

A heavy dosage of that category growth came from stomach remedies, specifically H2 acid blockers including Pepcid AC (Johnson & Johnson/Merck) and Tagamet HB (SmithKline Beecham) that roared onto the market in the second half of '95.

The stomach remedies market has grown 30% in dollars from yearend '95 to midyear '96, a surge abetted by '96 H2 entries: Axid AR from American Home Products/ Eli Lilly and Zantac 75 from Warner-Lambert.

Pepcid AC now leads the market, supplanting another J&J product, antacid Mylanta, now No. 2.

The H2s are backed by a collective $350 million in advertising/ marketing for '96-truly a media magnet of Olympic proportions.

Copyright q1996 by Crain Communications Inc. Quotation or reproduction in whole or in part without written permission is expressly forbidden.

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