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Modest Growth in Ad Spending Continues In 2016
The automotive industry is expected to be the top spending industry with an outlay of over $44 billion, a 2.8% increase, with sales increasing by 1.1%. Chrysler, Daimler, Ford, General Motors, Honda, Nissan, Tata, Toyota and Volkswagen will each spend over $2 billion.
Ad spending for wireless communications services will increase 2%, to just over $23 billion. Meanwhile, advertising growth by telecommunication service companies will be down by 1.8% in 2016 with estimated spending of over $14 billion worldwide. The widespread use of smart phones in everyday activity translates into continuing demand for high speed access and up-to-date equipment.
Large, diversified food companies are expected to spend a total of over $30.7 billion in 2016, up slightly from 2015's $30.4 billion. The malt beverage industry will spend just under $5 billion, an increase of 2.9 percent on sales increasing 1 percent. The 68 separate restaurant chains in the Schonfeld study will average 2.2% ad growth and spend a total of over$4 billion in 2016 as customers return to eating out more regularly.
The pharmaceutical industry will decrease spending slightly by 1.7% in 2016, still exceeding $21 billion. The emphasis on affordable healthcare and industry consolidation has somewhat dampened the pace of increasing pharmaceutical advertising. The industries of biotech and electromedical apparatus both show a growth in advertising spending of 10% or more. As in other industries, there is much interest and activity in social media advertising by the pharmaceutical companies. Most companies maintain Facebook pages and Twitter feeds.
Apple, the well-known provider of consumer electronics, will increase its ad spending by 7%. Advertising growth for the software industry will rise 4.5%. Advertising for semiconductors and related devices will be up 6.4 percent in 2016, while spending by computer storage device manufacturers will increase over 11%.
Variety stores, such as Target, Wal-Mart and Dollar General, will increase their ad budgets 2.3% for a total of just under $6 billion. Retail department stores, such as Macy’s and Kohl’s, will spend just under $ 4 billion in 2016, down 5.8% from 2015.
Advertising by catalog and mail-order houses continues to increaserobustly to over $8 billion. Online powerhouse Amazon is growing its advertising budget by over 15 percent. A presence within the social media universe, along with spending on more traditional advertising, has become an integral part of every retailer's marketing and advertising efforts. Web portal Google is planning to spend over $4 billion, an increase of 17%, while Chinese search engine Baidu will spend $88 million, up 19 percent. Facebook plans to spend $216 million in 2016 and LinkedIn will spend $7 million.
In 2016, the top ad spender will be Loreal, the world’s largest cosmetics company, with a budget of over $11 billion, an increase of 5.2% displacing Procter & Gamble with a budget of $9.2 billion, a slight decrease over 2015. Over 600 major foreign-based firms are covered by this year's study, including such firms as Unilever and Sony.
Advertising Ratios & Budgets is widely used for strategic planning by ad agencies, monitoring competitors, planning ad budgets, and identifying new business prospects. It is also used for selling advertising space and time, and for planning by publishers and broadcasters in developing new media vehicles. Budgets are grouped to show all competitors within an industry. Data from the study are also available in Excel format. Additional information is provided within the datafiles to allow for analysis by corporate location or NAICS code.
Advertising Ratios & Budgets is compiled from a variety of sources such as 10-K Reports. Since reporting may vary from company to company, careful use of the findings are advised. Caution is urged when: (1) financial events such as mergers, acquisitions, and divestitures may distort spending patterns; (2) private ownership of very large companies in specific industries may mean that some advertisers are omitted; (3) multi-industry companies are reported only in their primary industry based on sales of their dominant line of business.
Copies of the 190-page study are available in either hard copy or PDF format for $ 395. Forecasts and data from Advertising Ratios & Budgets are also available for all companies and industries in Excel format. Additional information is provided within the datafiles to allow for analysis by corporate location or NAICS code. The 2015 edition of the 190 page study along with Excel datafiles is $ 495. Contact Schonfeld & Associates, Inc., 1931 Lynn Circle, Libertyville, Illinois 60048. Call for more information: