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Mary Reinholz
Advertising spending in all media increased by only 8.3% in 1998, the lowest annual percentage increase in seven years, according to Competitive Media Reporting (CMR), a VNU Marketing Services company that provides strategic advertising intelligence to advertising agencies, advertisers, broadcasters and publishers.
CMR reported on March 30 that since 1991, a year marked by a 7.9% decline in spending, annual increases have ranged from 8.8% in 1995 to a high of 14.4 % in 1992. In a statistical breakdown, CMR figures reveal that cable advertising was up 15.4% in 1998, far outstripping network broadcast television's gain of 6.9%. Total media spending came to $79.3 billion in 1998 compared to $73.2 billion in 1997.
Steve Raddock, VP-communications/productions at the Cabletelevision Advertising Bureau, said the figures square with CAB's statistics that show basic cable network advertising revenues for calendar year 1998 rose almost $1 billion to $6.7 billion - a record high for the medium.
The group, which reported that basic cable network ad revenues have increased 142% since 1993, also relies on statistics from CMR.
Raddock also observed that the $6.7 million total in basic cable network advertising last year does not include spot/local or regional advertising sales. He said the slowdown reflected in the recent CMR report "obviously" does not apply to cable. "What we're seeing," he said "is a shifting of (advertising) dollars from other media into cable as it continues to grow at a steady pace, in tandem with (cable) viewership going up."
The CMR data for the industry as a whole reflects advertising dollars spent on television, newspapers, magazines, radio and outdoor. The Manhattan-based research group found that in the larger categories, women's health care products showed the sharpest decline, down 42%. Pharmaceutical houses were next in line, with a drop of 33.1%.
For the fourth straight year, General Motors was the leading industry advertiser, spending $2.1 billion. Proctor & Gamble placed second at $1.7 billion. Chrysler was third at $1.4 billion.
Once again, McDonald's fast food chain was the top advertised brand, spending $569.2 million in 1998. Burger King trailed at $404.6 million.
In overall beer advertising, Anheuser-Busch jumped from second to first, increasing its spending 33.4% to $309.3 million; while Philip Morris Co., the leader in 1997, decreased 16.6% to place second with spending of $214.4 million.
Coca-Cola scored again as front runner in the soft drink category with $243.1 million in 1998 while PepsiCo inched up by increasing its spending to $202 million in 1998.
Categories reflecting especially explosive growth in the industry last year were electronics and electronic components, with a whopping increase of 1,238%. Online and Internet services were robust, up 78.4% and prescription medications passed the $1 billion mark.
Telecommunications also showed significant increases in spending with business, personal and residential phone services up 36% led by MCI WorldCom at $642.9 million (up 40%). AT&T was a distant second to MCI at $467 million.
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