Having sampled seventeen unidentified US national advertisers – all large scale TV users – investment bank Merrill Lynch predicts a 4% year-on-year increase in advertising expenditure during 2003.
Seventy percent of respondents (that’s just twelve informants) say they don’t anticipate invoking their upfront TV cancellation options.
As to setting ad budgets, 47% of respondents (eight) fix these as a percentage of sales, 18% (three) base their budget on volume forecasts, and 12% (two) on corporate goals; the remainder (four) calculate them via a miscellany of metrics.
Assuming budget targets are not achieved, 31% (five) said they will slash spending to hit target. Conversely, 23% (four) said they would consider upping spend to stimulate sales. Other factors impacting on ad expenditure were corporate goals, market share and competitive issues.
Interestingly, 88% of companies (fifteen) are either negotiating a change of compensation packages with their ad agencies – or have already done so.
The Thundering Herd remained silent about actual dollar spend, atoning for this with much noise about percentages. Good PR copy – if not market research.
Data sourced from: AdWeek.com; additional content by WARC staff