Top 200 bolt ahead, spend $20 bil

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The top 200 Megabrands, which account for $19.9 billion in media spending, or 36.9% of all media spending of $53.93 billion in the first half, were up 14.9% over the same period in 2002. Spending outside the Top 200 was utterly flat, though considerably more upbeat than the 5.1% decline in first-half 2002 and 13.5% plunge at the 2001 midpoint recorded by non-Top 200 spenders.

This half-year analysis of the Top 200 megabrands expanded from 11 to the 13 media now monitored by TNS Media Intelligence/CMR, the two additions being Internet and Spanish-language TV networks. Using just a comparison of the other 11 media-those tracked since this report was first published 14 years ago-first-half spending hit $49.62 billion, up 6.8%, the first time spending at the half-way point has gone above the previous high of $48.17 billion notched in first-half 2000. This top-heavy spending contrasts with the across-the-board growth in 2000 when the Top 200 megabrands were up 15.2% and all advertiser spending was even stronger, up 16.2%.

A leading cause of the uneven growth is in the network and spot TV figures. Network TV at mid-year, saddled with comparisons to the Olympics in 2002, was down 0.4% for all advertisers; without the 3.6% growth in that medium by the Top 200, network advertising would have slumped 5.6%. All non-Top 200 advertisers spent 1.9% less in spot as the Top 200 advanced 4.8%. The Top 200's auto category (up 6.2% in network) propped up the medium as the big retail and food megabrand categories each grew only 1%. The 15% increase in prime-time ad commitments in the spring upfront market should jump-start network in the second half.

cable takes off

On the other hand, cable TV network advertising among the Top 200 grew 24.9% to $2.34 billion to virtually achieve budget parity with spot TV at $2.47 billion.

The Verizon and AT&T megabrands continue to lead all brands by a wide margin in spending. The two were the first in this semi-annual report to ever spend over a billion dollars, that for full-year 2002. Verizon is racing ahead at $574 million in first-half 2003 as AT&T eases off its torrid pace of 2002, spending $455 million.

The telecom category continues to prime the ad pump year after year, whether from the creation of branded calling numbers and DSL lines or the emergence of wireless. The wireless battleground will only intensify now that customers are free to keep their same phone number when switching carriers.

Competition is ablaze in the restaurant category as well, but with different results. Spending among the 14 restaurant megabrands in the Top 200 grew just 1.8% in the first half as many fast-feeders shuffled agencies and shelved marketing strategies. McDonald's (-3.6% in spending from first-half 2002), Burger King (-28.8%) and Wendy's (-0.3%) were locked in a menu price war, while the so-called fast-casual concepts loomed in the rear-view mirror.

auto spending up

Autos, easily the top volume spender in this report, grew 15.6% to $4.53 billion from 32 megabrands, substantially more than last year's 4% growth. The category's Dodge and Chrysler megabrands have both boosted spending 30% over first-half 2002 levels, after decreasing their budgets by about the same amount in first-half 2002. In the Chrysler megabrand, Pacifica, an SUV-wagon crossover, got $60.8 million in new ad monies and Town & Country minivan spending soared to $52.5 million, up 100%.

The auto category accounted for a third of all magazine spending by the Top 200 Megabrands. That spending grew 27.8% in magazines, a medium especially hard hit by the recession. Five of the top six advertisers in magazines were auto megabrands, highlighting auto's importance to the medium's overall health.

Magazines, indeed, received some long-awaited good news in the first half. Spending was up 10.5% from all advertisers, bringing the medium back to 2000 levels after two years of decline. As with most other media, the Top 200 megabrands did much of the work, spending 23.6% more in the first half than in the corresponding period of 2002.

The travel category has been trying to bounce back ever since the terrorist attacks of Sept. 11, 2001. In addition to more advertising from the airlines, online travel services have thinned to a few major players who are spending more as they battle for market share. Orbitz spending shot up 52.5% to $53.6 million; Expedia was close behind at $48.7 million, up 54.7%; and Travelocity came in at $49.9 million, up 132%.

Their appearance in the Top 200 data is in large part due to the inclusion of Internet. Other online services have taken advantage of this window to enter the Top 200 competitive mix: Netflix, the online video-rental service, hit $104 million in spending, up 602%.

The online auction service eBay spent $114.8 million in the first half, nearly two-thirds of it on the Internet, and just $1 million less than the venerable Coke megabrand.

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