TOP OF THE SLOTS

SBHD: The `feel-good factor’ has not proved a problem for advertisers, who raised their spend by a staggering 26.3 per cent last year. Sophie McKenzie analyses Marketing Week’s exclusive Top 100 advertisers survey

The days of limited growth in advertising spend seem to be over. This year’s Top 100 advertisers survey shows that companies spent over a quarter more in 1994 than the previous year. This huge increase suggests renewed confidence in the economy and gives the lie to recent claims that marketers are losing faith in advertising and moving their budgets predominantly below the line.

Our survey of the Top 100 advertisers, compiled exclusively for Marketing Week by Register-MEAL, shows the Top 100 advertisers spent ̼2.38bn in 1994 Рan increase of 26.3 per cent.

The overall rise is pretty even across all marketing sectors, with office automation/telecommunications, financial, household durables, cosmetics and toiletries showing the greatest gains. Of the major sectors, only drink saw a fall in spend.

At the top of the table Рfor the fourth year running Рis Procter & Gamble. The washing powder-to-nappy giant increased its spend by 24.1 per cent year-on-year to ̼117.5m. In the household stores sector P&G raised its spend from ̼75.8m to ̼91.2m in one year.

BT leaped up the charts into second place, significantly increasing its expenditure for the second year running. Its total spend rose from ú48.5m in 1992 to ú61m in 1993, and a ú103.3m in 1994. BT’s increase is far and away the biggest single rise among the Top 100. It reflects the intensity of the company’s recent advertising campaign to increase customers’ phone use.

Unilever, despite spending slightly more money than last year, slipped back into third position. Ford regained the fourth-place spot that it lost last time.

Despite putting an extra 12.2 per cent behind its product range, Kellogg slipped back into fifth place, from third last year. Meanwhile, Vauxhall held on to sixth position with a hike of 18.9 per cent.

All the Top Ten advertisers increased their spend in 1994, displaying renewed confidence in the economy following cuts by P&G and Unilever in 1993. After BT’s massive rise, the biggest increase came from Procter & Gamble Health & Beauty. It put 40.5 per cent more money into advertising year-on-year to bring itself into seventh place, from ninth last year. Dixons also moved up the ladder, from 11th to eighth position, with a substantial 29.3 per cent increase.

The Top Ten is rounded off by Unilever Birds Eye Wall’s and Peugeot Talbot Motor Company, with spends of ú44.3m and ú41.3m respectively, and representing a 13 per cent increase for both companies.

Modest and measured rises were the name of the game across both the food and motoring sectors. After the previous year’s huge 22.5 per cent increase in spend by the automotive Top Ten, 1994 saw increases steady at an average of eight per cent.

And in the food sector, which has held up fairly well in recent years, rises averaged 6.9 per cent. Two manufacturers cut spend sharply from 1993 levels. Unilever Brooke Bond Foods’ recorded a dramatic drop of 16.8 per cent to ú23m year-on-year, while NestléGrocery continued its descent in our league with a fall of 17 per cent, following a 15.2 per cent decrease the previous year.

Of the four sectors in the survey which showed the biggest increases, office automation/ telecommunications saw the most impressive rises. Spend across the whole sector has risen by 67.6 per cent. BT has increased its lead dramatically. It now spends over ú70m more than nearest rival Mercury Communications. The biggest leap in the sector was made by Hutchison Telecom, which moved from 13th to third place with a 387.3 per cent increase in spend to ú14.4m. Hutchison’s increase is mainly because of the launch of its Orange phone network.

Cellular Communications and IBM UK each more than doubled, moving from 18th to tenth and seventh to fourth place, respectively. Microsoft and Mercury Communications also made heavy investments in advertising Р̼7.2m and ̼15.9m respectively. The only player in the sector to swim against the tide was Vodafone, whose advertising spend fell from ̼10.1m to ̼8m year-on-year.

The financial services sector has steadily increased its spend for two years now, following a rise of 32.5 per cent in 1992, and 1993, with a 36.3 per cent hike last year.

Lying at number 24 overall in the survey, Abbey National retains its position as king of the financial services castle – a position from which it toppled the Halifax Building Society in our last survey. But the Halifax is catching up. It spent ú25.6m in 1994, a rise of 14.4 per cent on the previous year, while Abbey National’s spend rose just 2.7 per cent to ú27.5m. Two of the remaining companies in the Top Ten re-entered it this year after a short absence. The Nationwide Building Society jumped from 12th place last year to fourth this time, and Lloyds Bank – which dropped to number 16 in 1993 – squeezed back into the Top Ten.

The household durables sector continues to be full of surprises. Last year saw Zanussi leapfrog to the top of the pile from 13th place in 1992. This year Hotpoint made a similar advance, from 12th place to the number one. Meanwhile, Zanussi dropped back to seventh place.

Hotpoint’s 237.9 per cent increase in spend from ú687,600 to ú2.3m this year, is overshadowed by Panasonic Consumer Electronics’ 1,434 per cent hike from ú78,300 to ú1.2m.

This brought the company from 30th to sixth place in household durables.

The one sector that showed an decline, drink, has not slipped back disastrously. An overall decrease in spend of 8.3 per cent is due to significant reductions by two previous major players in the sector. Allied Domecq Carlsberg Tetley dropped back from first place to seventh in 1994 with a spend of ú10.5m, while Bass Brewers reduced its spend by 42.5 per cent to finish in eighth position.

Dixons Stores retains its position as the highest-spending retailer for the third year running, with Tesco and McDonald’s still at number two and three respectively. Overall spending in the retail sector grew by an average of 8.1 per cent, with only Texas Homecare reining back dramatically.

Slightly more movement was seen in the travel sector. British Airways retains its lead, despite cutting its spend by eight per cent year-on-year. The prime mover in the sector is First Choice, which just beat Thomson to the number three slot. Interestingly, both First Choice and Thomson spent just over ̼10.5m in 1994 Рthough for First Choice this represented an increase of 200 per cent and for Thomson a cutback of 26.5 per cent.

P&O European Ferries and Sealink Stena invested more in advertising last year, raising their spends by 61.3 per cent and 57.7 per cent respectively, presumably in the run-up to to the launch of the Channel Tunnel service Le Shuttle.

The overall picture for marketers is extremely positive. The survey shows that companies are bouncing back from the recession, with increased promotional budgets and a renewed confidence in advertising.