Food companies-considered relatively recession-resistant-kept spending as the economy slid into recession. One exception was Kellogg Co., which spent 31.3% less in the first three quarters. The company froze advertising earlier this year as it integrated Keebler Co.'s brands after it bought the cookie and cracker company.
Drug makers, which tend to spend even in recessions, made cuts that ranged from 0.2% (Glaxo-SmithKline) to 18% (American Home Products). Two drug giants bucked the trend: Pharmacia Corp., whose media buy rose 46.8% due largely to increased support of its arthritis drug Celebrex, and Bristol Myers-Squibb Co., which hiked spending 13.5% to support diabetes drugs Glucovance and Glucophage and facial hair cream Vaniqua.
Companies more vulnerable to recessions cut advertising sharply as corporate profits fell. General Motors Corp., last year's No. 1 advertiser, was down 28.9%.
Financial advertising was mixed. American Express Co.-which is suffering in both its travel and financial operations-cut 27.8%, and Visa USA dropped 17.6%. Citigroup-parent of Travelers Insurance, Salomon Smith Barney and Citibank N.A.-rose 21.7%, including spending for a new consumer banking campaign.
Retailers took to heart conventional wisdom that consumer spending was keeping the economy alive in 2001. Many mainline retailers held budgets or cut slightly, notably Sears, Roebuck & Co., which dropped less than 1%. Discount retailers were mixed, with booming Wal-Mart Stores' spending up and ailing Kmart Corp. down. Kmart Chairman-CEO Charles Conaway has called his ad cuts "a mistake."
The retail exception was hardware chains, with Home Depot and Lowe's Cos. both showing sharp increases in spending, banking on the recent wave of mortgage refinancing. Lowe's Cos. increased media buys 39%, partly to support its national expansion, while Home Depot was up 29.1% due to several new initiatives, including a push to capture homeowners' federal tax rebates.
The biggest gainer in the top 100 was possibly the most unusual. Mind & Spirit, which does tarot readings over the phone, increased spending 756.4% to $145.1 million. With every industry complaining of "low visibility," forecasting could be a growth industry.