Advertising Age Report : Spending by Top 100 U.S. Advertisers Up 16% in ’84
The nation’s top 100 advertisers, posting the largest jump in spending this decade, increased their domestic advertising expenditures 16% to $22.5 billion last year, according to a report released Wednesday by the New York-based trade magazine Advertising Age.
Those rosy results had been expected. But they came with an unusual explanation.
Breaking ranks with most other experts who had attributed rising ad spending last year to the 1984 Olympic Games and election campaigns, an Advertising Age spokesman said the increase was mostly due to new-product introductions.
“There was an awful lot of new products that required considerable advertising to promote” them, said Craig Endicott, an Advertising Age special projects editor.
IBM Jumped
He said the heavily advertised products “ran the gamut” from new varieties of granola bars and automobiles to a flood of compact disc players and more powerful personal computers.
International Business Machines, for example, jumped from No. 58 in 1983 to No. 18 in 1984 by spending a hefty $32.5 million on its new IBM PCjr computer. IBM’s total ad expenditure in 1984 was $376 million.
The Cincinnati-based consumer products conglomerate, Procter & Gamble, repeated as the nation’s biggest ad spender for the 21st consecutive year. Ad Age estimates that P&G; spent $872 million in 1984, up 10.5% from 1983 when it spent $788.8 million.
But Procter & Gamble faced a serious challenge from General Motors, which--in the wake of extensive ad campaigns for the new Corvette and Pontiac Fiero models--jumped from fourth place in 1983 to runner-up in the latest rankings. GM spent $763.8 million in 1984.
Sears, Roebuck dropped a notch to third place, spending $746.9 million in 1984, up slightly from the $725.8 million it spent in 1983.
The 16% increase in advertising expenditures by the nation’s top 100 advertisers, Advertsing Age said, “surpassed that of 1982 when advertisers sought to rejuvenate sales by increasing ad spending 15.2%.” Total ad spending in 1983--which Ad Age calls “a good financial year”--rose only 10.5% from 1982.
Gloomier Outlook
Most experts are forecasting a gloomier outlook for advertising spending this year.
Robert Coen, senior vice president and director of forecasting for the McCann-Erickson advertising agency, predicts that all categories of domestic ad spending, which includes the smaller advertisers, will increase 9.1% to $95.8 billion in 1985, compared to a 15.8% increase in 1984. The anticipated 1985 spending increase would be the slowest year-to-year increase in five years.
Advertising Age, in a conference that it sponsored in New York City last month, acknowledged that the advertising outlook is uncertain.
“Economic instability in the marketplace, expanding consumer sophistication and competitive challenges mean that advertising and marketing are undergoing major changes,” the meeting organizers mused in their conference brochure.
