While marketers-notably in categories including cars, computers and hotels-are spending more, media buyers are postponing any celebration, especially after a week that saw the Federal Reserve boost interest rates to prevent a strengthening economy from growing too fast, too soon.
Advertisers spent nearly $6.6 billion on broadcast TV in the second quarter of 1994, up 12% from second quarter '93, according to an assessment of Competitive Media Reporting data by the Television Bureau of Advertising.
The strong showing, coming on top of an even stronger first-quarter performance, produced a first-half total of just under $13 billion, a 16% gain from a year ago.
"If this rate of growth continues in the second half, aided by increased political activity and a continuing growth in the general economy, we could see the first double-digit year since 1984," said Harold Simpson, TVB's VP-research and development.
But many media executives sifted through the first-half numbers with a good measure of cynicism, attributing the $2.9 billion spent in local TV, up 12%, to hotly contested political primaries.
The $6.1 billion in first-half network expenditures, also up 12%, included the Winter Olympics. And the 74% surge in syndication spending, which hit $1.2 billion, was linked to expanded monitoring of the category by Competitive Media Reporting.
"Tonya [Harding] helped out in the first quarter, and more political spending in the second quarter is keeping it high. But this isn't out of the blue. This is just dog catchers and sheriffs causing commotion in local markets," said Jean Pool, senior VP-director of local broadcast at J. Walter
Thompson USA, New York.
Another concern for the rest of '94: Double-digit ad growth may be unrealistic as the heavy upfront buying season will leave fewer dollars to spend in the more pricey scatter market.
"There's no doubt things are looking a lot healthier. We're waiting to see how much of the upfront networks were able to write was due to uncertainty in other areas," namely questions about the strength of station lineups and next fall's network prime-time slate, said Betsy Frank, exec VP-director of strategic media resources at Saatchi & Saatchi Advertising.
Another negative is the Major League Baseball strike. If it persists, automotive and beer marketers will be among the big advertisers to take back ad dollars.
Still, there's no denying that in many categories, consumers are buying more, leading companies to increase ad spending.
"In the past few years, increases were carried by the automotive category while everybody else stayed down," said TVB's Mr. Simpson. "Now, more categories are sensing that the money is out there and that consumers who have been holding off for three years are ready to spend."
Automotive is still a driving force, with rising sales and several important new-model launches combining to lift the category's first-half spending to nearly $2.2 billion, up nearly 15%.
Computers are also likely to be a strong factor in the second half. Gian Carlo Bisone, Compaq Computer Corp.'s VP-North American marketing, said the industry is likely to have record fourth-quarter TV spending as marketers try to build awareness and demand.
The hotel industry is also seeing a spurt in ad growth.