In 2001 the long-running debate on the role left for big-budget, mass-market advertising took on new meaning. With the prospect of recession looming large throughout the year, marketers steeled themselves for a downturn by cutting their above-the-line adspend and seeking greater return on investment from their campaigns.
In the fourth year of Marketing's exclusive analysis of the top 100 UK advertisers' spend, with figures from ACNielsen MMS, overall spend has declined by 3.7% to £2.86bn, compared with 2000's rise of 2.1% and 1999's 10%. Even more telling is the fact that 59 of the top 100 advertisers cut their spend in 2001, compared with 48 in 2000 and 29 in 1999.
The top three advertisers remained the same as 2000 with one major
difference: COI Communications rose to the top of the table having increased its spend by 38.5%.
Its position at the top of the table has already caused controversy and the government has denied accusations of 'electioneering', as reported in Marketing (February 14). The government says its £142.5m spend, which was poured into dozens of campaigns ranging from literacy and numeracy to a campaign for the 2001 Census, was justified as it meant voters benefited from government services. Its spend puts it more than £25m ahead of the next highest spender Procter & Gamble which owns Ariel, Sunny Delight and Fairy, has decreased its spend by 5.6%.
Last November P&G's UK chief, Chris de Lapuente, hinted in an interview with Marketing that the company was to start channelling more of its budget toward below-the-line marketing. "We've gone through a period where TV advertising costs were higher than we expected and we didn't consider it particularly good value. We've put more effort into developing stronger, deeper relationships with consumers either via direct mail or interactive TV advertising."
Spending cuts
P&G's chief competitor, Unilever, is split by MMS into the separate companies through which it operates. Despite cuts, the combined total for the four divisions would make Unilever the UK's biggest spender, leading COI Communications by £82,566. Its food divisions, including brands such as Marmite and Pot Noodle, suffered cuts, with Birds Eye Wall's falling by 27.1% and Bestfoods falling by 23.5%, while the Lever Fabergé Personal Care and Home divisions underwent a drop of 1.7% and a rise of 0.6% respectively.
The third-biggest spender in 2001, BT, tells a different story. Having decreased its spend by 10.1%, it has concentrated on measuring return on investment rather than consciously shifting to below-the-line.
"Proportionately, the 10% decrease has not gone below-the-line," says Amanda Mackenzie, director of marketing services at BT. "An objective of my job is to spend less and achieve more. The 'Gladiator' ads created a platform for us to advertise products that we have not advertised before, and based on that they are working harder for us than the ET campaign."
Four of the top ten advertisers are car brands: Ford, Renault, Vauxhall and Peugeot. And, with 17 automotive firms in the top 100, 2001 was a prolific year for car marketers. Ten of the 17 have increased their spend, most notably BMW (73.6%) and Mercedes (53.6%).
Yet the sharp increases seen in 2001's car adspends may have been a blip as marques rallied to bolster their budgets after making reductions in 2000 due to pricing issues.
Automotive's ups and downs
"Allegations that the UK car market was excessively priced led to public debate about buying cars in Europe," says Mike Moran, Toyota commercial director. "But people didn't buy abroad, they just held off. By October 2000 marques had all reduced their prices buy around 10% and for quite a long period they didn't want to advertise, which is why Mercedes' adspend went from £18m in 1999 down to £10m in 2000 and back up to £16m in 2001," explains Moran.
Car commercials were ubiquitous on TV screens in late 2001, as car marketers took advantage of the chance to buy cheaper airtime from embattled media owners. Ford's TV spend rose by 36.2%, Citroën's by 21.3%, Honda's by 52.1%, Nissan's by 60.8%, BMW's by 43.7% and Mercedes' by a huge 420%.
Of course, automotive ad budgets fluctuate according to the number of models being launched, but as Moran admits, advantageous TV prices provided a fillip. "If you are in the market for TV advertising, then 2001 airtime at 1997 prices will seem very attractive," he says. "But I don't think it would have affected those that were not in the market for TV space."
Back to the top ten, Sainsbury's' adspend is also on the up. It has leapt ten places to number nine, having increased its spend by 14.7%. Of the 17 retailers in the table, Sainsbury's is one of only five to have increased its above-the-line adspend.
Its Jamie Oliver ads are proving successful, and the chef has agreed a new £1m contract with the chain for the next two years.
"Last year television was relatively cheap and in deflation, so unlike the previous year, we were able to buy what we wanted," says a Sainsbury's spokeswoman. "This increased presence reflected our business recovery and transformation. In addition we wanted to support the Jamie campaign, which we know is effective."
The UK's second biggest supermarket is flourishing under Sir Peter Davis, having reported Christmas sales up 6.8% on the same period in 2000, but although it spends more than twice Tesco's £24m on above-the-line ads, its profits still trail the market leader.
Tesco has, according to the MMS figures, slashed its above-the-line spend by 9%, in line with its emphasis on direct marketing and customer relationship management. "Retailers are looking for lots of different ways to communicate" says Sally Bain, senior analyst at retail specialist Verdict Research. "Advertising is an important part of the mix, but it is a mix and retailers are starting to target niche markets. They are leaning toward using more direct marketing and customer relationship management, rather than the mass-market coverage that above-the-line offers."
Halifax leads the retail banking sector, with a 21% increase and a 22 place leap up the table. Of its £21.4m spend, £14.1m went on TV, while its spend in other media decreased. This rise was due to its 'real employee' TV ad campaign starring staff Howard Brown and Yvonne McBride singing pop songs.
Conversely NatWest, still running its 'trendy wine bar' TV ads, has slashed its above-the-line spend by 37.6%. The main cuts came in TV and press, while its radio and outdoor spends are up by more than 35%. Barclays and Egg, which raised their overall spends by 264% and 206% in 2000 dropped out of the table in 2001.
Cinema boom
This year very few companies hiked their spend substantially. The biggest increase was from Channel 4, which, according to the MMS figures, raised its spend by 109% to £14.6m. "The spend for 2001 included advertising for FilmFour and the launch of E4, which meant an extra spend of between £3m and £4m, and buoyed our press spend," says Bill Griffin, C4 chief marketing manager.
The media hit hardest by the falling spend were TV (£1.8bn) and radio (£136.3m), each taking a 6.4% tumble. "Radio couldn't escape the fact that advertisers weren't spending as much," says Justin Sampson, managing director of the RAB. "But it did well out of sectors such as personal finance, which increased spend by 33%, and automotive, which increased it by 7%."
Bucking the downward trend, cinema saw a boom year, with the top 100 advertisers spending £84.3m -- 108.8% more than they did in 2000. According to the Cinema Advertising Association (CAA), the automotive sector spent the most on cinema,
followed by telecoms and drinks.
Cinema admissions rose to 156 million in 2001, the highest for 29 years -- since 1972 -- and while 67% of cinema-goers are aged between 15 and 34, 20% are now over 45. "More brands are using cinema than ever before," says a CAA spokeswoman. "The increasing diversity of films is attracting a broader audience and a diversity of brands."
Despite their decreases, TV and press remained by far the media of choice, easily outselling cinema, radio and outdoor. P&G was the biggest TV spender, while BT was the biggest supporter of press ads. But it was closely followed by the COI, which was the biggest radio spender. Vauxhall was the biggest supporter of outdoor, with a £6.1m spend in this medium.
Follow the link on the right to view the full list of top 100 advertisers or click . Please note that Top 100 PDF is quite large and may take time to download fully.
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