Ad spending to rise: survey

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Advertising spending will show modest growth in 2003, according to an annual study.

Telecommunications and prescription-drug companies will help drive up totals, according to the 26th annual study, Advertising Ratios & Budgets, by Schonfeld & Associates.

Schonfeld's modest forecast for 2003 follows two years in which the study missed the downturn. Schonfeld in 2000 predicted 2001 would show a solid increase in spending; U.S. ad spending actually fell. Last summer, Schonfeld forecast 6.7% growth for 2002; spending, at best, is likely to be up only a few percentage points this year.

Telecom has been hammered in the downturn, but Schonfeld's new study forecasts it to see ad spending grow to $26 billion in 2003, up 5.6% as the ongoing changes in competition among the major players pushes up ad budgets. Spending among wireless-communications companies will rise 12.2% to $7.4 billion, while cable and satellite TV companies trying to get a share of the Internet-access business will spend $6.8 billion on advertising in 2003, Schonfeld projected.

DTC drives growth

The pharmaceutical industry will increase spending 10.9% in 2003 as direct-to-consumer marketing keeps driving growth in the category, the study found. The industry will spend $25.4 billion in 2003 as companies invest to defend their over-the-counter versions of major drugs from generic competition as several major patents expire in coming years.

In 2003, the top global ad spender will again be Nestle, whose estimated budget of $8.4 billion will rise 7.4% over 2002, Schonfeld said. Large food companies are expected to spend just over $19.8 billion in 2003, up slightly from 2002's $19.2 billion. The 118 restaurant chains in the study will average 3.3% ad growth and spend a total of $3.3 billion in 2003, Schonfeld found.

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