Source: WPP's Kantar Media.
Pie chart reflects 2009 U.S. measured-media spending for all advertisers including 100 LNA.
Figures aggregated by Ad Age DataCenter. Numbers rounded.
See table and notes, P. 22.
NEW YORK (AdAge.com) -- Here's the good news for CMOs, media and agencies: 26 top marketers bucked the trend and boosted 2009 advertising even as spending for the 100 Leading National Advertisers plunged 10.2%. Among those with the guts to spend more, 70% saw a U.S. sales increase -- double the success rate of those whose spending declined.
As for the bad news: Last year's LNA spending decline marked the sharpest drop since Ad Age began the ranking in 1956.
LEADING NATIONAL ADVERTISERS 2010:
Comprehensive rankings of 100 LNA including top spenders by medium and ad spending by category. Links to Ad Age's LNA rankings back to 1997.
Marketer Family Trees
Company profiles, agencies, brands, executives, ad spending and sales for the nation's 100 top advertisers. Part of Ad Age DataCenter's premium content.
Exhibit A for ramping up when many others hunker down: Walmart Stores. Walmart, gunning for market share during the recession with its value message, increased 2009 U.S. spending 14.2%, according to Ad Age estimates. In its 10-K regulatory filing, the world's largest retailer said it spent $2.4 billion on global advertising in 2009, a whopping $300 million increase over the previous year.
For the first time, Walmart Stores in 2009 was the nation's No. 1 spending retailer based on measured-media advertising, displacing Macy's. Walmart in 2009 was the country's third-most-advertised brand; in 2007, on the eve of recession, it ranked No. 16.
The company's Walmart U.S. division last year managed a 1.1% sales increase in a brutal retail market, gaining share even as the nation's retail sales fell 2.1%. Walmart still spends less than retail rivals by one key measure: advertising as percent of sales. But the trend is upward: Walmart spent 0.59% of worldwide sales on advertising in 2009, up from 0.52% in 2008, 0.48% in 2007 and just 0.30% in 2000, according to Ad Age's analysis of 10-K disclosures.
Nine of the 26 spending gainers -- including Hershey Co., General Mills, Nestl? and Unilever -- came from the recession-resistant sectors of food and package goods.
The list of spending boosters also includes restaurants offering relatively cheap fast food (McDonald's Corp., Subway franchisor Doctor's Associates); four pharma firms (including Pfizer), a sector that kept growing through the recession; dueling satellite services battling for market share (DirecTV, Dish Network); and four retailers (Walmart, Safeway, Gap Inc., regional chain Fry's Electronics).
Rounding out the list was an insurance company (Progressive Corp., which gained share last year in the hotly competitive auto-insurance market), a bank (Wells Fargo, which bought Wachovia Corp.), two tech firms (IBM Corp., Microsoft Corp.) and a big player in the surging field of for-profit education (Apollo Group, owner of University of Phoenix, making its 100 LNA debut).
More for less
Many marketers managed to do more for less, taking advantage of what once seemed unimaginable: media deflation.
Marketers from Anheuser-Busch InBev to Procter & Gamble Co. cited media discounting as a significant cost savings in their annual-report filings.
A-B InBev, the world's largest beer marketer, noted "media and advertising cost deflation in key markets." Spirits marketer Diageo took advantage of "media rate deflation" in North America. Food maker Kellogg Co. said operating profits benefited from "media deflation" in Europe.
P&G, the nation's and world's largest advertiser, said "media rate reductions" helped reduce marketing expenses as a percent of sales.
Revlon, though too small to make the 100 LNA ranking, offers a clear example of how marketers gained from media price cuts. In its 10-K filing, the personal-care products marketer said it cut 2009 worldwide ad expenses by $24.8 million -- or by about 10% vs. 2008 -- "as a result of achieving lower advertising rates, while increasing the level of media support."
It's apt that marketers used the word "deflation" to discuss media prices, for 2009 in economic terms was a deflationary year: The U.S. Consumer Price Index (annual average) fell 0.4% in 2009, the first decline since 1955. The easy savings for marketers probably are over. Consensus is the 2007-2009 Great Recession ended in third-quarter 2009, giving way to a weak economic recovery -- and some increased demand for media.
U.S. measured-media spending in first-quarter 2010 rose 5.1% for all advertisers (and 11.0% for the top 100 advertisers), the first quarterly gain since first-quarter 2008, according to WPP's Kantar Media. More demand from buyers means media sellers -- at least strong media properties -- should feel less need to give away the store. (See story on TV's resurgence, P. 6.)