George ‘Adscam’ Parker kindly alerts me to some of the goodies in WPP’s current annual report (George doesn’t see them as goodies), in particular this interesting table from WPP’s Kantar Media showing the top 20 US advertisers busily cutting expenditure, for the most part anyway.
WPP CEO Sir Martin Sorrell (left) berates them for short-termism, citing a Credit Suisse report showing that brands do better if they invest consistently in advertising.
It’s an argument as old as the hills. Most clients would take the point but they would also say they need to conserve cash in a worrying commercial world and hacking away at the ad budget is an easy way to do it. They’ll spend more in the future – honest.
It’s also noteworthy that the same WPP report shows that marcoms spending has increased by eight per cent over the past few years while world GDP has risen by six per cent. So advertising and marketing is still ahead of the game. When one big advertiser cuts back someone else usually takes their place – and, sometimes, their market.
If you look down this list of top US advertisers, you’ll notice the absence of the likes of Google, Apple and Microsoft. One reason these companies are so profitable is that they don’t need to spend as much on ads as legacy businesses.
A final point: is one reason for this noisy bee in Sorrell’s bonnet the examp[le of Ford? Ford is WPP’s cornerstone account – Team Detroit and all that – but its adspend in 2014 fell nearly 26 per cent year on year, by far the biggest fall in the US top 20. In 2014 it spent about half what long-time great rival General Motors did – ouch!
US advertising spend (US$m) by company
2014 rank 2013 rank Company 2014 2013 % change
Source: Kantar Media
1 1 Procter & Gamble $2,642.2 $3,081.1 -14.2%
2 2 General Motors $1,648.9 $1,795.7 -8.2%
3 3 AT&T $1,637.8 $1,868.7 -12.4%
4 4 Comcast $1,550.2 $1,648.0 -5.9%
5 7 Berkshire Hathaway $1,431.3 $1,258.3 13.7%
6 5 L’Oréal $1,425.2 $1,554.8 -8.3%
7 9 Pfizer $1,400.6 $1,138.9 23.0%
8 8 Verizon Communications $1,284.4 $1,224.6 4.9%
9 6 Toyota $1,198.3 $1,268.8 -5.6%
10 – Fiat Chrysler Automobiles $1,133.3 $1,169.0 -3.1%
11 13 Johnson & Johnson $1,041.0 $976.6 6.6%
12 10 Time Warner $999.3 $883.4 13.1%
13 14 McDonald’s $951.3 $993.8 -4.3%
14 15 Softbank $919.2 $930.7 -1.2%
15 16 Wal-Mart $900.2 $898.4 0.2%
16 18 Nissan $865.9 $870.2 -0.5%
17 – Deutsche Telekom $863.2 $800.3 7.9%
18 17 Walt Disney $848.2 $876.5 -3.2%
19 20 Yum! Brands $836.1 $859.4 -2.7%
20 11 Ford Motor Co $835.8 $1,127.9 -25.9%
Next year’s list might be different, of course. Apple seems to be doing more and it’s planning to back its retail offer more heavily. Maybe Ford had nothing new to say – that is, no important new models – in 2014. But it’s an illuminating list al the same.
