SNARING AD SHARE FROM BROADCAST TV FORECASTER COEN SEES RETAILING ON THE RISE IN 3RD, 4TH QUARTER

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Following a strong economic upturn last year, newspapers should reap benefits from such key national advertisers as major automotive marketers and retailers in 1995.

"National advertising had a good gain in 1994, up 7.9% from the year before," says Robert Coen, senior VP-director of forecasting for McCann-Erickson Worldwide, New York.

"In 1995, newspapers should gain share from broadcast advertising dollars, because [the TV] networks will be without the Winter Olympics and political campaigns."

Sears, Roebuck & Co.'s Merchandise Group had its best year in a decade, thanks in part to its image ad campaign, "Come see the softer side of Sears."

The campaign, created by Young & Rubicam, Chicago, repositions the company's to target women via stronger apparel and home fashion lines.

Sears, one of the newspaper industry's largest retail clients nationally, credits some of its success to newspaper advertising. Overall, the company spent $171 million on newspaper advertising last year.

Retail ad spending in newspapers showed many signs of renewal in 1994, buoyed by across-the-board retail sales about 7% higher than in 1993. As a result, retailers contributed to newspapers' ad gains in 1994 with an increase of 4% to 5%.

But Mr. Coen anticipates retailers' biggest ad spending increase will occur this year, as sales continue to fare much better than they did in the 1980s, when many chains went into bankruptcy or disappeared altogether.

"Newspaper retail advertising began to pick up in the third and fourth quarter," says Mr. Coen. "I anticipate that if one retailer starts to get aggressive, then the rest will follow."

Category killers like Circuit City Stores are godsends to newspaper ad departments. Having to reach many consumers in concentrated areas, Circuit City spent about $246 million in newspapers in 1994, according to Competitive Media Reporting.

"Category killers have the general store to compete with and must draw consumers from a 10- to 12-mile radius," says Chris Hoyt, president of his own marketing consultancy. "They are aggressive about running specials and letting people know that they are in the area."

Many of these category killers are rapidly opening new stores in all markets and taking out ads in local papers to tout their expansion.

In addition, big chains like Dayton Hudson's Target Stores, Kmart Corp. and Wal-Mart Stores are all aggressively building "supercenters," a concept that combines groceries with mass merchandise.

That trend will play a strong role in newspaper advertising in 1995, since supercenters heavily advertise grand openings and weekly specials.

Wal-Mart, with 143 supercenters, plans to build an additional 100 this year. Kmart, with 63 supercenters, will build an additional 30.

The 25th-largest newspaper advertiser, Tandy Corp.-Radio Shack, Computer City and Incredible Universe-expects that by 1998 it will almost double its advertising budget to $500 million as it expands those chains across the country.

In 1994, Tandy spent about $62 million in newspapers.

But, in a controversial speech last year at the Newspaper Association of America convention in San Francisco, Tandy President-CEO John Roach demanded that newspapers be more attentive to ad policies and editorial support if they want a chunk of that spending.

"The newspaper plays a significant role as a partner to all of its constituencies, including business and business development for the community," says Mr. Roach, underscoring his belief that newspapers have an editorial responsibility to support new businesses in their community.

Mr. Roach told NAA conference attendants he expects more significant coverage of store openings. He also complained that Tandy is charged more for ads than other volume customers who get better placement.

On the other side of the coin, Jim Julow, director of marketing operations at Chrysler Corp., last month told the Cabletelevision Advertising Bureau convention that his company is shifting "millions of dollars" back into newspapers.

The reason, he told the group, is that publishers are addressing their problems, including lack of guaranteed placement or timing, inflexibility in altering creative and complex planning.

The purpose of his speech was to warn cable TV to change its spot practices soon, so that industry wouldn't have to learn the hard way, as newspapers did.

The automotive industry is expected to remain strong for newspapers-as long as escalating interest rates can be held at bay, says Miles Groves, chief economist at the NAA.

CMR reported an overall 16% increase in automotive ad spending in newspapers between 1993 and 1994, to $2.2 billion.

Chrysler spent $31.5 million on newspaper advertising, while General Motors Corp., ranked twelfth for ad spending, spent $110 million. Ford Motor Co. spent $92 million, according to Competitive Media Reporting.

`National automobile advertising began to show up gains in 1994," affirms Mr. Coen, who adds that most of the spending can be linked to product introductions and corporate image campaigns.

In the coming year, Mr. Coen expects package goods marketers-especially foods and cereals-to increase newspaper spending, in part because last year many marketers took money out of newspapers to advertise on TV during the Olympics.

In addition, he also expects telecommunications and computer marketers such as IBM to spend more money.

Airline, travel and resort advertising will [also] show good gains for 1995, Mr. Coen says.

Mr. Coen says that overall, advertisers will be less miserly in 1995 as a result improved economic times, and will "have some crumbs to throw to newspapers."

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