By Published on .

Ad spending outpaced the economy for a fifth consecutive year, and General Motors Corp. fended off Procter & Gamble Co. as the nation's leading ad spender, according to figures compiled by Competitive Media Reporting.

Total U.S. media spending rose 8.3% in 1998, to $79.3 billion, more than twice the growth rate of the gross domestic product, which notched a respectable 3.9% increase.

Among ad media the sharpest increases came from national spot radio, up 21.1% to $2.04 billion; outdoor, up 18% to $1.73 billion; and cable TV, up 15.4% to $6.67 billion. TV's twin peaks, network and spot TV, grew 6.9% to $16.27 billion and 6.6% to $15.49 billion, respectively, far behind cable's accelerated pace.


There are no surprises in those growth rates, said Robert Coen, senior VP-director of forecasting at McCann-Erickson Worldwide. The different media are growing true to form, with cable ahead of other TV categories, Mr. Coen said.

He said growth in outdoor spending is deceiving, noting the wave of mergers and acquisitions may mean some parent companies are reporting numbers inflated by current-year-only returns from acquired companies. Outdoor is traditionally under-reported by CMR.

Among advertising segments, business and technology marketers spent $17.93 billion, up 19.06%-not only the largest segment outlay but the biggest increase. Financial mergers and acquisitions, entrepreneurial startups and a technology boom are making marketers spend more on advertising, explained Louis Rubin, exec VP-director of marketing planning at Doremus & Co., New York, an agency specializing in corporate and financial services marketing.

"The thing that separates technologies is having a brand name," he said.


Food and beverages was the slowest-growth segment, up only 2.77% to $7.06 billion, modest growth that is part technology and part retail-driven, said Ken Harris, a partner at consultancy Cannondale Associates. Food mar

keters have shifted some resources to online marketing and hiked the portion of their marketing budgets dedicated to in-store promotion under pressure from retailers.

The transportation and travel segment remained second largest at $13 billion, up 5%, a category influenced by its automobiles and auto accessories category accounting for three-quarters of segment spending. General Motors, from that subclass, directly influenced transportation's modest uptick.

GM spending slipped 4.7% to $2.122 billion, abetted by a paralyzing seven-week strike last summer. The auto marketer halted model ads and ran only a limited corporate campaign. P&G showed only a 2.2% growth to $1.725 billion in claiming the No. 2 spot in spending.

Philip Morris Cos., caught in the movement to curb cigarette advertising, slipped 4.1% to $1.264 billion.

DaimlerChrysler ranked No. 4 despite an 0.2% slippage in spending to $1.411 billion from the aggregate pre-merger total for Chrysler Corp. and Daimler-Benz in 1997. Some spending since the merger has been shifting to non-traditional media such as interactive and events marketing. Ford Motor Co. spent $1.07 billion, up 9.6%, as the No. 5 spender.

The top five were the only advertisers to top $1 billion in national media.


Ad spending growth has outpaced increases in the nation's economy since the end of the 1992-93 recession, said Mr. Coen.

He pegs the 1999 media spending growth rate at 5.5%, down from his December forecast of 7.1%. Mr. Coen, who often adjusts spending forecasts, said the change reflects anticipated slowdown in economic expansion and rising inflation.

Advertising, though, is typically a step behind the GDP, he said, so even if the

Most Popular
In this article: