eMarketer looks at Ad Age's list of leading national advertisers and analyzes ad spending trends.
For 50 years, Advertising Age magazine has published its annual "100 Leading National Advertisers Report." This survey gauges spending for both measured media-television, radio, newspapers, magazines, internet, yellow pages and outdoor-and unmeasured media, which "includes direct mail, sales promotion, co-op spending, couponing, catalogs, business and farm publications, and special events, to name a few," as the introduction to June 2005 version puts it.
By isolating the top 100 ad spenders from the 250 largest national advertisers, Ad Age paints a detailed picture of mostly traditional advertisers, how much they're spending, and where they're putting their money. By analyzing the details of each company's spending for 2004 and 2003, eMarketer identifies trends that point to where the internet and overall ad markets are going.
Numerous analysts have said that internet ad spending still has plenty of room to grow because so many traditional advertisers are still underinvested in the medium. The Ad Age data back that up: total spending by the leading 100 advertisers made up 37.3 percent of all media spending in 2004. However, the same companies' internet ad spending made up only 30.5 percent of all internet spending.
The leading 100 are, as might be expected, highly focused on television advertising, with 61.1 percent of that medium's 2004 spending coming from this relatively small group. That was down slightly from 2003. In fact, the leading 100's share of each medium's total US ad spending dropped in 2004 for television, radio, magazines and newspapers. It rose only for the internet. Radio and newspaper advertising presented the largest declines, an indicator that money for Internet advertising is coming more from those two media than from television or magazines.
In a similar indication of the shift toward the internet, the growth rate for the leading 100's Internet ad spending was 41.2 percent, far higher than the 21.4 percent increase in internet ad spending among all companies, according to TNS Media Intelligence in the Ad Age report. In the case of the other four media, total spending growth was higher than for the 100 companies.
However, when each medium is measured not by the leading 100 companies' share of each medium's spending, but as a portion of total US ad spending, you can see how the 100 top advertisers are only starting to give the Internet its due. In 2003, internet ad spending by the leading 100 made up 1.8 percent of total spending, the same figure as for radio ad spending. By 2004, the portion of Internet ad spending among the 100 rose to 2.3 percent, while radio spending fell to a 1.6 percent share.
David Hallerman is a senior analyst at eMarketer. This article is drawn from his report, Ad Spending Trends.