When we consider advertising, we often think that the biggest brands must spend the most on advertising. Though this is often at least partially true, companies that are involved in industries with the fiercest competition tend to spend the most in order to stay relevant and at the top of consumers' minds. In fact, the industries that typically spend the most on advertising include automotive, retail, financial services, telecommunications and personal care products.
Procter & Gamble
A global organization providing many of the most popular personal care and cleaning products, Procter & Gamble (P&G) often ranks in the very top spot for advertising dollars spent - both in the United States and internationally. Kantar Media's 2011 index of top advertisers indicates that P&G spent just shy of $2.95 billion on advertising. This astronomical expenditure was actually a 5.4% decrease from the $3.1 billion expenditure spent in 2010, though it still secures its spot at the top of the index for the ninth year in a row. Though television advertising took the top spot according to the index, P&G actually reduced its TV advertising expenditure by 6.8% in 2011. Magazine advertising took second place in P&G's budget.
Why, in a world that's going digital, would such a huge portion of advertising dollars go towards television? This could be due to the huge cost associated with this form of advertising. Just imagine how much money it costs to get a well-known celebrity like Taylor Swift to appear in P&G's Cover Girl commercials. Add to that the high price tag of creating and airing ads on primetime television and the cost is bound to add up quickly. Interestingly, P&G's significant expenditures on magazine advertising can likely be attributed to the fact that some of their products have an easily targeted audience. Just think of makeup advertisements appearing in fashion magazines. However, as a general trend, advertising in newspapers, magazines and radio have seen significant decreases over recent years.
Competing with many of P&G's personal care products, L'Oreal put 18.1% more towards its advertising budget in 2011, with the largest volume of these dollars going towards its L'Oreal Paris, Maybelline and Garnier lines. L'Oreal's grand total came in at $1.34 billion spent on advertising according to Kantar Media's index.
Whether you pick a GM, Chevrolet, Buick or Cadillac, General Motors really wants to get you into one of its cars, which isn't terribly surprising considering that they're still emerging from years of financial difficulties. No other car company beats the amount of General Motors' $1.78 billion investment in advertising, though this was a decrease of about 16% from the previous year's expenditure of nearly $2.13 billion. In 2011, the automotive industry spent the most on advertising overall with an increase of 6.3% for the entire category, making a total advertising expenditure of nearly $13.9 billion for the year. Even though General Motors may have spent the majority of its advertising budget on television, it actually directed 15.7% more of its advertising budget towards online advertising in 2011.
Chrysler put the second largest sum of money towards advertising when compared to all the other automotive companies with its expenditure of $1.19 billion. This was a whopping increase of over 36% from $875 million in 2010. What accounts for the significant increase? Chrysler laid out the cash to help educate the public on a number of vehicle redesigns and also to take advantage of the recent improvements to the new vehicle sales environment.
It's a tough race to take command of the wireless world. Verizon is currently the largest mobile service provider based upon the number of customers it serves, so it's no surprise that it's making every effort to stay at the top of consumers' minds. Verizon spent the second-largest sum of all wireless providers (AT&T having a slightly larger expenditure of $1.9 billion) according to Kantar Media's 2011 index. Of the $1.64 billion spent by Verizon on advertising, more than half of this was spent in television.
Media company Time Warner increased its advertising expenditures for 2011, coming in at roughly $1.28 billion. Kantar Media indicates that though this total expenditure is up 5.8% from the previous year, its television advertising expenditure also went up nearly 10% in 2011 with a total expenditure of $766 million going towards this form of media. This is an interesting statistic since it's predicted that online advertising is the way of the future. Typically the vast majority of Time Warner's advertising dollars goes toward the marketing of films.
SEE: Why Movies Cost So Much To Make
Just think of all those clever Viagra commercials you see on TV. Those ads were brought to you by another of the nation's big spenders on advertising. Pfizer spent $1.2 billion in advertising according to Kantar Media's 2011 statistics. Considering how frequently some of its more clever ads can be seen on television, there's no shock that television accounts for the largest portion of its budget, but magazine advertisements also make up a considerable volume of its expenditures.
The Bottom Line
The world is always changing and evolving, and this is certainly true for the advertising industry as well. It is predicted that online advertising, including mobile ads, will overtake all other forms of advertising by the year 2016. Considering the high rankings of television expenditures listed on the Kantar Media index, this may seem hard to believe. However, the very way that people watch television is changing as more and more people go online to catch up on their favorite television shows, current events and movies. It will be interesting to see how advertising changes in the coming years, especially as social media continues to change and evolve. Though we can always be sure of one thing--corporations will do everything in their power to alert us to new products and remind us of old ones that we may have forgotten in order to wrestle those hard-earned dollars from our wallets.
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