Top 10 movie studios by measured media spending Top 10 companies by 1997 measured ad spending Top 10 categories by 1997 measured ad spending (1-100) Top 10 categories by 1997 measured ad spending (1-200) Total measured media spending for 1997 SEARS SOARS TO THE TOP AS AT&T AD INVESTMENT COOLS; ELITE GROUP PUSHES SPENDING 14% TO $20 BILLION

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Media spending by the Sears, Roebuck & Co. megabrand is anything but soft.

This firmer side of Sears plied the media market with $664.6 million to take honors as the nation's top ad megabrand for 1997, according to Advertising Age's Top 100 Megabrand survey.

As a group, Top 100 spending in national media rose 14.1% to $20 billion, representing just over a quarter of total measured media advertising in the U.S. All advertisers spent $73.2 billion in measured media in '97 -- a strong 9.7% growth, especially considering spending in the comparable year got a hefty boost from the Summer Olympics and the presidential election.

Sears' ascent was fueled by a 19.3% ad push, much of it in building supplies and home services. Its claim on No. 1 also was abetted by a 27.9% decline in spending from perennial and '96 leader, the AT&T telephone megabrand, now at No. 6. The Top 100 stretched to Mervyn's stores at $90.2 million, up 18.1%.

Sears stores last occupied the megabrand summit for the three-quarter 1993 cumulative, a period when heavy advertising, corporate restructuring, store closings and revitalized merchandising were combining to lift Sears out of an earnings slump that hit the retail industry in the early '90s.


Prior to shifting the megabrand coverage to a semiannual issue, Ad Age had produced a Top 200 megabrand report on a quarterly basis since 1990. The Top 200 continue to be reflected in charts in this new report. These 200 megabrands accounted for 34% of the nation's media spending in '97. Those ranked Nos. 101-200 claimed 6.6 percentage points of the total.

No movie ad spending is present in the Top 200 this year, although 11 studios conceivably could have made the list (see chart on Page S-6 and methodology on Page S-2).

Ad Age changed the megabrand methodology to exclude studios because their spending does not support the same set of brands (particular movies) in the studio megabrand from year to year. Studio advertising is characterized by spending bursts for new releases, and annual studio ad totals usually are determined by the number of movie releases -- rather ephemeral qualities that defy solid comparative analysis.

New ventures have led to a refocus in marketing and advertising at AT&T Corp. Rather than put more ad money into the increasingly competitive long-distance maw, it is shifting spending into new ventures such as wireless and Internet. The company's pending purchase of Tele-Communications Inc. merely demonstrates that focus on a corporatewide basis.


Among Top 100 media breakouts, network TV accounted for 36% of the spending. Its $7.17 billion accumulated for these leading megabrands is 47% of all network TV advertising, which totals $15.23 billion.

Spot TV gained 8.3% to $3.94 billion for the Top 100; consumer magazines, 17.1% to $2.78 billion; newspapers, 28.5% to $2.47 billion; and network cable, 22.5% to $1.6 billion.

The Top 100 no doubt is flexing its muscle this year, given the big 15.2% growth in network TV and 12% growth in spot TV for all advertisers in first-quarter '98. All national spending in the period was up 7.2%, according to Competitive Media Reporting, which tracks spending quarterly. CMR provides line-item spending totals from 11 media for this report. That spending then is consolidated into megabrands by Ad Age.

Newspapers were dollar volume king among all advertisers at $15.78 billion in '97, accounting for 21.5% of total spending in national media. Sears stores, Circuit City stores and Wal-Mart stores, the three leading megabrand spenders in newspapers, invested a collective $755.1 million into the medium, up 21.5%. Newspapers were up 13.3% among all advertisers.


The Chevrolet cars and trucks megabrand, ranked No. 2 overall at $656.3 million, up 22.4%, led a contingent of 26 auto megabrands in the Top 100.

Needless to say, the auto category influenced life in the megabrand fast lane. Autos accounted for one-third of total spending in the Top 100, one-third of Top 100 spending on network TV and a quarter of the spending in spot TV and magazines, a medium paced by Chevrolet's $208.3 million, up 52.5%.

The 14 U.S. marques accounted for 65.4% of automotive's total spending of $6.5 billion, followed by the 10 Asian megabrands at 31.4% of the total. Germany's Mercedes-Benz and Volkswagen megabrands fleshed out the list.

Detroit hit $4.26 billion in ad spending, half of that generated by seven megabrands from General Motors Corp. The GM total of $2.11 billion for these megabrands outpolled the $2.04 billion spent in the U.S. by the Asians.

Most GM advertising is for Top 100 megabrands. Its spending on all brands in '97 was $2.23 billion, up 30.1% -- most of any corporate spender. Procter & Gamble Co. trailed at $1.7 billion, up 12.3%, followed by Philip Morris Cos. at $1.32 billion, up 8%. Neither P&G nor Philip Morris have a large mega-brand contingent in the Top 100.

GM's biggest megabrand growth-gainers were Cadillac and Oldsmobile. The Cadillac cars megabrand, its $247.6 million media outlay up 87.7%, supported each of its products with double-digit ad growth in '97. Catera advertising of $54 million, up 162%, boosted Catera unit sales from 1,676 in '96 to 25,411 in '97. The DeVille, with ad spending of $55.6 million, up 42.2%, was the only other Cadillac model to advance in unit sales.

The $228.6 million (up 58.7%) backing behind the Oldsmobile megabrand was spread evenly between six major nameplates. Intrigue, a midsize car introduced in '97 to replace the Cutlass Supreme, Bravada sport-utility vehicle and Silhouette van showed strong results: Intrigue gained 23,460 new unit sales; Bravada, 28,481 units vs. 15,471 in '96; and Silhouette, 24,615 vs. 9,330, according to Ad Age's sister publication, Automotive News, which monitors unit sales on a monthly basis.


Jeep vehicles megabrand protected the flank of its highly profitable Grand Cherokee with $120 million in media spending vs. only $21.9 million in '96; Grand Cherokee sales in the increasingly populated SUV segment still slipped from 279,198 to 260,875.

The SUV market got new entries in the Mercedes-Benz ML320, with first-time unit sales of 14,569 and $24.5 million in advertising, and the Honda CR-V at 66,752 initial unit sales from $32.4 million in media spending. Toyota Motor Corp. backed the 4Runner and RAV4 with $33.8 million and $19.3 million, respectively, and saw unit sales advance 29% and 19%.

The Ford Explorer holds title to the unit-sales lead among SUVs at 383,852, down from 402,663 in '96. Ford boosted Explorer spending 104% to $69.3 million.

Chevrolet caught the marketing curl at the right time with Malibu, an old name for a new model. Chevy provided first-time backing of $78.6 million -- Chevy's largest for any bonnet -- as unit sales shot to 164,654.

Advertising from Asian mega-brands grew 7.1%. The big three from Japan -- Toyota, Nissan and Honda -- claimed more than half the ad volume of the 10.


Ad volume leader, Toyota cars and trucks, funneled $89.4 million, its biggest ad package for a nameplate, behind Camry as the sedan moved ahead of Ford Taurus and Honda Accord as the top-selling car in the U.S. Unit sales hit 397,156 (up 10.5%) for Camry, 384,609 (up 0.6%) for Accord and 357,162 (down 10.9%) for Ford Taurus.

Camry couldn't claim sheer ad power, honors that went to Accord at $148.8 million -- heaviest ad backing for any vehicle in '97.

Camry was aided by early-year weakness in sales of previous No. 1 Ford Taurus, due to a higher price tag and buyer resistance to its complete redesign. The '97 Camry itself was two years into its own redesign.


Bragging rights for the No. 1 nameplate in unit sales in the first five months of '98 has swung to Accord at 162,005 vs. Taurus' 154,698 and Camry's 150,615, although Camry won the May race, gaining 8,000 units on its competitors, according to AN.

In first-quarter '98, CMR's latest available numbers, Accord hit $32.2 million, Camry $30.6 million and Taurus, $21.1 million in media spending.

Nissan funneled $126.7 million in advertising behind the Altima, up from $50 million -- second-largest outlay for any vehicle in '97 -- but unit sales still slipped 2.3% to 144,483. The intent of the heavy support was to move '97 Altimas from the lots to make room for fall delivery of a redesigned Altima.

Hyundai Corp. packed its Hyundai car megabrand with $108.3 million in media, up 22.6%, as car sales grew 4.3% -- stats apparently not strong enough to secure the jobs of its marketing staff.

In December '97, Hyundai engineered layoffs that swept through the executive ranks and included U.S. Marketing Director Maurice Bowen and VP-Product Planner Jim Hossack.

Then in February, Robert Parker unexpectedly resigned as senior VP-sales after only 11 months on the job. The South Korean company, now seeking a new marketing vision, had billed itself as a caring company selling quality products.

Holding down ad growth among the Asians were the megabrands that relied more on sales from imports than domestically produced vehicles -- understandable given the Japanese yen's 10.2% average annual decline vs. the dollar in '97 thereby making U.S. media that much more expensive.

Those import-reliant megabrands, all declining in advertising from '96, were Mazda, Lexus, Infiniti and Acura.

Media spending patterns for Asian and U.S. auto megabrands took on greater similarity in '97 as the Asian's moved funds out of spot TV (still their favored medium) into magazines and network TV, the media preference of the U.S. auto megabrands.


Retail, the second-largest megabrands category at $3.4 billion, anchors newspapers, spending about half its total advertising in the medium. Two-thirds of Top 100 spending in newspapers is credited to retailers.

Among megabrand department stores and mass merchandisers, only Sears and Wal-Mart spent more in another medium (network TV) than in newspapers.

Sears pushed spending on department stores miscellaneous, a CMR construct, to $112.8 million, up 183%; household items got $83.2 million, up 5.3%; automotive got $73.5 million, up 41.6%; building supplies, $34.3 million, up 193%, as Sears bought Orchard Supply Hardware Stores; home improvement services, $28.5 million, up 48%; Craftsman, $16 million, up from $3.8 million; and Sears HomeCentral, introduced with $12.7 million.


The eight-member restaurant category, third in ad volume among all categories, grew 5.4% to $1.92 billion, just over half its ad volume claimed by net TV.

McDonald's, at $580.5 million, accounted for 30% of category spending. Tricon Global Restaurant's troika -- Pizza Hut, KFC and Taco Bell -- spent $503.5 million, about the same as '96 when under PepsiCo.

McDonald's advertising slumped 3.1% for the year, due largely to a 20.6% drop in its network TV. The fast-food chain has suffered through several marketing setbacks the last two years, including losing its senior VP-marketing, Brad Ball, to Warner Bros. earlier this year.

Diageo's (formerly Grand Metropolitan) Burger King, contributing to McDonald's woes, also turned up the pressure by boosting its ad dollars 18% to $427 million.

Other than Messrs. Ball and Parker (Hyundai), the only other top marketing executive to leave a Top 100 company was Sergio Zyman, chief marketing officer at Coca-Cola Co., who resigned this March and was replaced by Charles Frenette. Most recently head of Coca-Cola's South African division, Mr. Frenette is a veteran of the fountain business.

Coca-Cola's marketing tact in '97 was to place more emphasis in local marketing and promotions, resulting in a 27.1% decline in media advertising to $159.8 million. Coke Classic spending dropped 14.5% and Diet Coke's fell 35% -- both due to cutbacks in network and spot TV.

These brands had been backed heavily in 1996, the comparison year, to make a splash at the Summer Olympics in Atlanta, Coca-Cola's hometown. Coca-Cola is sponsoring Nascar, the World Cup (an $80 million deal) and National Football League. Coca-Cola just got soft-drink national exclusivity with the NFL after whittling down the league's $30 million asking price to around $6 million.

By contrast, Pepsi-Cola boosted media by 35.5% to $129.8 million. It, too, is moving more heavily into local marketing and events.


The seven-member telephone category, typically meteoric, lost its fire in '97 with ad growth of only 1.1% to $1.72 billion. The culprit was AT&T, clipping $184 million from its media package in '97. AT&T cut spending on long distance for business and residential by almost $250 million, funneling new money into wireless services, up 112% to $98.8 million, and Worldnet On-Line, up from $5.7 million to $33.8 million.

By contrast, MCI Communications pumped $100 million more into media to push its total to $435 million, a 29.9% increase that fell largely into two programs: 1-800-COLLECT and 10-321 long distance. MCI backed COLLECT with $148 million, up 115%, and 10-321 with $79 million, new in '97.


R. Craig Endicott, Dataplace editor; Kevin Brown, Information services editor; Susen Taras, research editor; Megan Friedly, research coordinator; Mike Ryan, editor, Special Reports; Geoffrey Shives, design director; Jack Volpi, editorial assistant; Dara Alpert and Peter Killian, research assistants.

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