CMR Report: Ad spending up 14.5% in 2000
- by January 5, 2001
Full year 2000 estimates are based, in part, on the reporting of all ad dollars spent on measured media through the first three quarters of 2000 as compared to 1999 - $73.0 billion, up 15.9% from $63.0 billion.
"When all the reporting is complete, advertising spending will clearly reach a record high for 2000," said David Peeler, President and CEO of CMR. "The industry will surely see its strongest growth in years."
Various one-time events contributed to the jump in ad spending for 2000. The heated presidential and congressional elections turned previous "give-me" states into fierce battlegrounds, with millions spent on political campaigns in an attempt to shore up candidate positioning. The summer Olympics in Sydney spurred sports and entertainment-related spending, and the early part of 2000 also benefited from millennial carryover. New dot-coms poured money into brand awareness campaigns while their brick-and-mortar counterparts tried to keep pace to defend market share.
2001, according to CMR, will be much softer with expenditure growth slowing to an estimated 3.8%. This will be more of a marketplace correction, rather than a reversal, according to Peeler. "With the absence of the previous year's major events, the demise of the dot-coms, and the general economic slowdown, industry watchers can expect to see spending level off at 'normal' rates, which will translate to more moderate growth."
In addition, marketers are already scaling back budgets for 2001, especially in the automotive sector. General Motors announced it would no longer market its Oldsmobile brand, the advertising for which accounted for $334 million in 1999 alone, according to CMR data, making it one of the nation's largest ad accounts. Chrysler said it wouldn't honor 2001 contract increases for its print advertising, and Volvo is already planning a 10% reduction in its global sales and marketing budget.
