Marketers Plan Slower Ad Expansion In '05

Signaling a potential falloff in ad spending next year, WPP unit Millward Brown Tuesday released a survey indicating that far fewer senior level marketing executives plan to boost ad spending in the major media in 2005. The study, Millward Brown's so-called "Marketing & Media Snapshot 2004," was sponsored by Advertising.com and shows that online media continues to have the greatest ad budget expansion plans among marketers, with more than half planning to boost spending in the medium in both 2004 and 2005. However, the percentage of marketers planning to boost online ad outlays in 2005 fell more than three percentage points to 54.1 percent in 2005.

That generally is the picture across the major media reflected in the survey, which each saw some erosion in ad spending expectations in 2005, a year that follows a so-called quadrennial year in which extra market stimuli such as the Summer Olympics and the presidential campaign race attract incremental ad spending. Not surprisingly, network TV is expected to have the greatest falloff next year, with the percentage of marketers planning to boost spending in the medium eroding by nearly five percentage points to only 30.8 percent in 2005.

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The most stagnant medium overall, according the marketers, with only 19.2 percent of marketers planning to boost investments in that medium in 2005. The outdoor advertising industry has been working feverishly to increase its profile with marketers and on Madison Avenue and is accelerating the pace of its own new media development, as well as new electronic audience measurement technologies that would put it on more of even keel with other major media.

Among the studies other findings are:


* 56% of top marketers say their total marketing and media budgets increased in 2004 over 2003. Sixty percent expect an increase in 2005.
* All channels of online marketing (Web advertising, search, email, promotion) are expected to increase at a higher rate than other major media.
* Marketers rated TV and magazines as most effective for building brand equity.
* Direct mail was rated as most effective for reaching a target audience and providing measurable ROI.
* Direct mail was rated as most effective for reaching a target audience and providing measurable ROI.
* Online is seen as the most effective medium for acquiring and retaining customers and in offering efficiency.
* 89% of marketers say their companies run integrated marketing campaigns, but we learned that they define integrated marketing in many different ways.

% Of Marketing Execs Who Expect To Increase Medium's Spending



--2004-- --2005--
Network TV 35.6% 30.8%
Cable TV 37.0% 35.6%
Magazines 33.6% 29.5%
Newspapers 28.1% 27.7%
Radio 27.1% 25.0%
Online 57.2% 54.1%
Outdoor 22.6% 19.2%
Direct Mail 37.7% 34.2%

Source: Millward Brown's Marketing & Media Snapshot 2004. Base = 300 senior-level executives responsible for the marketing and media budgets of their company surveyed in October 2004.
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