Thanks to special deals on car loans, the automotive sector led ad spending in the fourth quarter, according to a survey by media researcher CMR/TNS Media Intelligence.
"Detroit pulled out all the stops and probably lost money by offering zero-interest loans to buy cars, and foreign makers had to respond in kind—all of which led to a lot of advertising by both," said one media buyer. "It's hard to believe that those deals will continue, and therefore advertising is likely to be cut back as well."
But Steven Fredericks, president and CEO of CMR/TNS, sees the trend continuing deep into 2003. "Car makers are still offering zero-percent loans, and especially since sales have recently been sluggish, it looks as if they plan to more aggressively expand those sorts of deals," he said. "And doing so will naturally entail more advertising."
Another sector that did well was government-related national advertising. But spending in that area is likely to decline this year before experiencing another boom closer to the presidential election in 2004. Spending on last November's congressional races topped $900 million, the most ever spent in a non-presidential election season.
"This past election cycle was unusual because the split between the Democrats and Republicans was so close that each side was vigorously contesting each election," said one media executive. "That forced each side to keep spending more."
With no major political races this year, the category should decline substantially, Fredericks said, though 2004 will see a rise because of the demand created by the Olympics broadcast.
Total ad spending for all sectors in 2002 was $117.3 billion, compared with $112.5 billion in 2001, according to CMR/TNS. The 4.2 percent growth was stronger than expected, said Fredericks.
"In 2001, you still had the residual effects of 9/11," he said. "So the increases were expected as things began to return to normal by 2002. In addition, there was a view at the time that the economy was going to pick up modestly in 2003. What surprised a lot of people was not that there was improvement, but the strength of that improvement."
The war has had a dampening effect on advertising of late, with coverage of the situation leading networks to pre-empt shows and ads, Fredericks noted. But that could be temporary, he added.
"This year's growth is a result of a strong second half reflecting the vibrant network upfront, the elections and holiday spending," he said. "Despite geopolitical and economic uncertainties, the marketplace outperformed our expectations for the year." —david kaplan