Strong rise foreseen for ad spending during 2001

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[riverwoods, ill.] Advertising expenditures will continue on a strong path in 2001 for the nation's top 200 spending industries, according to the 24th annual Advertising Ratio & Budgets study from Schonfeld & Associates.

The survey credits the stock market boom, which is encouraging new-product investment, and increased marketing activity, including increased use of the Internet and online advertising.

Large, diversified food companies are projected to spend nearly $20 billion in 2001, up from $19.2 billion this year. Nestle is projected to be the top spender in 2001, with an estimated budget of $9 billion, a growth of 8.2%, the study said. The 123 restaurant chains in the Schonfeld study will average 4.3% ad growth and spend a total of $2.9 billion in 2001. The automotive industry is expected to remain the top-spending category, with an outlay of $26 billion, an increase of 6.6% from this year.

PHARMACEUTICAL GROWTH

The pharmaceutical industry will increase spending 8.8% in 2001, reaching the $21.8 billion mark. The patents on many established drugs will expire in the next few years, and marketers are investing heavily to make sure that over-the-counter versions of major products have a strong consumer franchise before generic drug makers make their moves.

Advertising growth by telecommunication service marketers will be up 7.1% in 2001, with estimated spending of more than $20 billion. Ad spending for wireless communications services will continue to increase, up 14.1% to $4.2 billion, the study said. Cable and satellite TV services, trying to get a share of the Internet-access business, will spend $2 billion on advertising in 2001.

Next year also will be key for computer products marketers, according to Schonfeld. PC manufacturers will increase ad spending by 13.2%, and advertising for prepackaged software will rise 12.3%.

Marketers of semiconductors and related devices will spend 8.2% more in 2001, reflecting advertising to increasingly knowledgeable consumers. Computer communication equipment advertising will grow 14.1%.

Advertising by retailers reflects continuing consumer confidence in the economy. Department stores will spend $6.8 billion in 2001, an increase of 7.8%. Advertising by direct mail catalog houses will surge to $3.3 billion, up 14.5%.

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