The report from Goldendale, Wash.-based Adscope tracks spending in high-tech publications as well as some business magazines and newspapers for the top 1,000 advertisers in the category. It found expenditures grew to $667.9 million in the first half of 1993, up from $586.9 million during the same period last year. Total ad pages during that time increased 9.8% to 50,109 from 45,628 in the first half of 1992.
Ad executives interpret the increase as a sign that the economy's downward spiral has hit bottom. It may also reflect some long-term changes in the way these companies view the role of advertising. As the industry matures, marketers are relying more on advertising to create awareness of their name, not just to deliver a laundry list of product features as they have done previously.
"Products are getting harder and harder to differentiate technically," said Agnieszka Winkler, president of Winkler McManus/S.F. "There's the beginning of an understanding of the importance of branding that's new to high-tech companies."
Still ad execs said they were skeptical that the healthy increases would continue through year's end. They've already begun to see signs of erosion in overall spending in the second half of the year.
"I don't think it's an accurate reflection of the current market," said Michael Austin, president of Austin Associates/San Jose. He said companies that comprise the nuts and bolts of the category, such as disk drive and peripherals makers, are trimming their ad budgets. The increases, even in the first half, have been "very uneven," he said.
Sheila Craven, president of AdScope, said the proliferation of targeted publications that address specific sectors of the market has helped fuel the spending increase by allowing smaller marketers to advertise more. PC Week, for example, now publishes six different versions including Netware and Resellers editions. Though PC Week saw less than a 5% gain in ad revenue in its main edition, it achieved nearly a 9% gain overall when the other editions were taken into account. "Only the top-ranking companies can afford to advertise to everyone everywhere," said Craven.
LEADING THE WAY
Top high-tech ad spending for first half of 1993*
1993 1992 Change
IBM Corp. $29.7 $19.9 $49.1%
Microsoft Corp. $24.9 $18.8 32.4%
Digital Equipment Corp. $12.8 $19.7 34.9%
Dell Computer Corp. $14.4 $9.8 45.9%
Gateway 2000 $10.9 $7.9 38.4%
Source: AdScope, Goldendale, Wash.
* in millions
Copyright Adweek L.P. (1993)