At&t and mci WorldCom, paired in what seemed a three-legged race, closed the first half of the year as the nation's top two megabrands by media spending.
Each step taken by the one -- whether ubiquitous 10-10 dial-around services or nickel calls -- was matched by the other as AT&T spread $387.4 million over media in first-half, up 34.1%, and MCI WorldCom, $381.3 million, up 29.6%, according to Advertising Age's semiannual report on the nation's top megabrands.
The Sprint telephone services megabrand, often leading this marketing tit-for-tat, clicked along in the ninth spot at a more subdued $236.4 million in media, up 57.8%.
The telephone services category isn't short of dynamism. Big marketing dollars keep flowing into cellular and wireless and are beginning to move into broadband services, a melange of cable, phone and Internet that's captivating AT&T Corp. and what's left of the Baby Bells.
Mergers, though likely to spur lower category spending as a result of reduced competition, have recently hooked Sprint Corp. with MCI WorldCom, US West with Qwest Communications, and Frontier Corp. and Global Crossing.
The category, populated by seven of the nation's top 100 megabrands, commanded $1.59 billion in media in first-half for an impressive 27.2% growth that helped key the flourish in media spending by the top 100.
The 100 advanced 16.2% to $11.73 billion, as all media spending improved 6.9% to $41 billion, according to 11 media tracked by Competitive Media Reporting. Clearly, the 100 and the second 100, which advanced 19.2% to $3.86 billion, were the pillars for growth in overall spending.
Their combined $15.59 billion take, up 16.9%, accounted for 38% of the nation's outlay in media, up one percentage point from last year. This report uses the 200 for statistical purposes because the larger number adds greater nuance to analysis by megabrand category.
As an example, drugs and personal care, a premier growth category, claimed 10 megabrands in the top 100, but 21 in the next 100 tier that included nine ethical drug remedies marketed direct to consumer. Five of the those nine -- Viagra, Meridia, Lipitor, Nasonex and Detrol -- were in their first year of advertising. This category among the top 100 grew 16.7%; among the 200 it advanced 28.6%.
A megabrand had to be powered with $30.5 million in media to reach the 200. Cutoff for the 100 was $51.2 million.
AUTOS LEAD THE PACK
Megabranding basically merges brand spending across CMR subclasses. Ford autos and trucks, as an example, fall in different subclasses but are consolidated by Ad Age into a single Ford megabrand.
Autos was the dominant category among the 200. Its $4.12 billion in media was volume leader; its 33 participants, the largest number in a category. The category's 14.5% advance was characteristic of growth among the top 10 categories.
Network TV dominated media spending by the top 200, claiming $5.36 billion in first-half, up 16.8%. Among the 200, network's surge is coming from telephones (up 40.1%), retail (up 22%), and financial services (up 53.1%).The medium's four big categories among the 200 -- autos, drugs & personal care, food and fast-food restaurants -- show maintenance-level spending.
SPOT TV'S BUMPY RIDE
Although spot TV is presently on the uphill of a bumpy ride, it grew only 2.2% among the 200 in the first half. Among all advertisers, spot slipped 5%, most from a poor second quarter showing. From the 200, spot suffered a 10.8% decline in Asian auto ads, a 2.4% fall-off in restaurant ads and a 17.5% decline in telephone ads. U.S. autos, about a quarter of the top 200's investment in the medium, grew 13.6% in spot to carry the ad load. Spots fortunes thought have reversed dramatically this July and August (latest available CMR data), a two-month period already up 11..4% over the whole third quarter '98. From all advertisers, telephones were up 19% in the two months compared to three months of '98, restaurants were up 16.4%, and Asian autos, up 19%.
Network cable, emerging as a stronger alternative to spot TV, expanded by 40.4% for the top 200 and 26.8% for all advertisers in the first half. Among top 200 categories, phone ads swelled 132.4% in first-half cable, the drug segment of the drugs & personal care grew by 95.7%., fast-food restaurants by 40.9%, and U.S. autos grew by 21.7%.
Except for beer, there were no 200 categories of any size that slipped in cable spending. Beer -- with spending declines at Miller and Budweiser beers -- slipped in spending across most media.
Auto and truck marketers are on pace to eclipse the record sales of 16 million in the U.S. for light vehicles established in 1988. At mid-year, sales were 8.54 million, and by the end of the third quarter, 12.9 million. Sales of U.S. makes among the top 200 were being pushed by $2.52 billion in media, up 7.6%. Asian makes drew $1.13 billion in media, down 1.7%, and European $345.3 million, up 47.6%.
The U.S. auto contingent was led by Ford cars and trucks. Ford grew 16% to $378.9 million, some 56% of that dedicated to trucks and sport utilities, particularly the Explorer. In market share Ford's trucks and SUVs grew 0.9 share points as cars slipped 0.7 points in unit sales, according to Ad Age sister publication Automotive News.
General Motors Corp.'s Chevrolet megabrand registered one of the lower increases in measured media, up 5.8%, and dropped market share in both cars, down 1.6 percentage points, and trucks/SUVs, down a precipitous 2.4 points. In most cases, a two percentage-point swing in this industry is monumental.
GM's Oldsmobile megabrand grew 58.9% in spending to $173.5 million, more than a third of it backing the Alero, launched in late 1998. Without the top selling vehicle, Olds' autos would have declined in unit sales. As it was, division sales meted out a 22% increase that pushed up the Olds auto market share by 0.5 points.
TOYOTA PULLS AHEAD
Toyota put 30% or $78.7 million of its media behind the Camry, whose unit sales of nearly 224,000 at mid-year left behind contenders Ford Taurus and Honda Accord for the top-selling car of the year.
Pricy European marques are riding high in the strong economy. Spending by the six megabrands in the category each rose more than 30% from the prior year, except for the Mercedes-Benz megabrand, its advertising up a mere 27.1%.
The 29-member retail category rang up a 12.4% growth in spending to $2.2 billion, second only to autos. Most growth came from mass merchandiser, apparel and home-supply retailers, segments that advanced 20.3%, 50.4% and 29%, respectively. Department stores, the segment bulwark traditionally claiming 40% of media in the category, squeezed out a 4.8% gain as J.C. Penney stores (down 10% in media) and Dillard's (up 0.5%) kept the count low.
Telephones got a boost in 10-10 dial-around spending that totaled $243.2 million. MCI WorldCom spent $200 million of that on its multiple 10/10/220/321/9000 services.
Movie studios are hardly shy in distributing their media largess. Expenditures from 17 studios among the 200 hit $982 million in the first-half, down 7.2%. Walt Disney's Buena Vista Pictures powered "Tarzan" with $23.2 million in media, largest backing of any movie in the six-month period even though it was only released in June. U.S. box-office receipts may hit a record year if the pace set in first half continues.
AA does not megabrand movie studios on the premise they lack continuity in spending for a specific brand or brands. Films receive little spending beyond