Tacos, cars and Botox drive an estimated $3 billion in yearly advertising by Orange County companies.
The largest advertisers here make up about 3.5% of the $110 billion spent nationally each year on TV commercials, radio, magazines, billboards and sports sponsorships.
The percentage is notable, given that the county makes up 1% of the nation’s population
“Orange County is different from other markets,” said John Gothold, executive creative director at Santa Ana-based DGWB Advertising & Communications. “We’re trend setters and innovators now,a lot more than just Disneyland and orange groves.”
Of course, advertisers here used to spend a lot more just a couple of years ago. Nationally, advertising spending fell 14% to $30 billion in the first quarter from a year earlier, according to TNS Media Intelligence, a unit of London-based ad agency WPP Group PLC. That comes on top of a 6% decline in 2008 from 2007.
Ad budgets are in decline amid the recession and a big pullback by consumers.
But some of the county’s largest advertisers are holding relatively steady as they pitch their products as good fits in tough times. They include the county’s two largest advertisers, Irvine-based Taco Bell Corp. and Fountain Valley’s Hyundai Motor America Inc.
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“Everybody has to have a value message now,” said Sean Hardwick, senior vice president at the Irvine office of DraftFCB, part of New York-based Interpublic Group of Cos.
With the help of advertisers and advertising executives, the Business Journal took a look at the biggest spenders here. They’re profiled below.
The list doesn’t include every sizable advertiser here but captures the bulk of spending that originates from here.
Taco Bell
The Mexican fast-food restaurant chain, part of Louisville, Ky.-based Yum Brands Inc., is pegged to be the top advertiser here with an estimated $500 million spent on marketing annually.
Most of Taco Bell’s spending goes toward TV and radio spots, including its “Fourthmeal” campaign designed to drive sales of late-night meals.
The company long has been known for its ad campaigns. Past commercials included the famous talking Taco Bell Chihuahua, which the company used until late 2000.
The company also is big on sports, with ads at baseball games, motor sports races, wrestling matches and extreme sports events. The chain is in its sixth year as an official sponsor of Major League Baseball, including ads at Angel Stadium of Anaheim. Taco Bell is set to have a big presence at next month’s All-Star Game.
To go after young people, last year the company started a “Best of the Beat” campaign with three alternative rock bands performing on a Taco Bell-sponsored music tour.
Taco Bell is holding up well during the downturn as diners trade down to its value menu of inexpensive tacos, burritos and other items, Chief Executive Greg Creed said.
The company saw a 9% increase in its first-quarter sales at restaurants open at least a year.
Lead agency: DraftFCB in Irvine.
Hyundai Motor America
The U.S. arm of South Korea’s Hyundai Motor Co. spends about $450 million a year on advertising.
The automaker targets consumers with TV commercials on cable channels and the major networks.
It has been buying time during baseball and hockey games on News Corp.’s Fox Sports channels and during basketball games on Time Warner Inc.’s TNT.
In February, Hyundai went after the largest sporting event with its first Super Bowl commercial and sponsorship of NBC’s Super Bowl XLIII “Kick-Off Show.”
There also have been product placements, including on TNT’s crime drama “Leverage.”
Like other automakers, Hyundai has pared its spending but has managed to remain more prominent than some struggling rivals.
Last year, Hyundai launched a $100 million marketing campaign for its luxury Genesis sedan and coupe.
The automaker’s greatest marketing success this year has come from its Hyundai Assurance program, which allows auto buyers to return vehicles if they lose their jobs or income.
Hyundai largely has stuck with TV, radio and Internet marketing but has a sponsorship deal with Huntington Beach-based Rhys Millen Racing.
Drift racer Millen is driving the Genesis coupe in several different series including Pikes Peak race this summer.
Agency: World Marketing Group in Irvine.
Irvine-based Allergan Inc.
Once a sleepy maker of eye and skin drugs, Allergan has become a major advertiser with its medical cosmetic products, spending an estimated $300 million a year.
Allergan regularly spends an estimated $40 million to $50 million on Botox Cosmetic, a wrinkle-removing injection that’s become a household name.
The company splits its marketing among various internal divisions and by consumer and professional markets.
On the consumer front, Allergan was the first medical cosmetics company to sponsor the U.S. Open with its Juv & #233;derm wrinkle smoother brand this year.
Allergan operated a lounge at the tennis tournament featuring free massages and a local doctor who provided facial consultations. The company also had tennis stars Tracy Austin and Lindsay Davenport appear to sign autographs.
Allergan’s latest push is for Latisse, a version of a glaucoma drug the company found could grow eyelashes. Actress Brooke Shields pitches Latisse.
The company also spends on marketing to doctors, Web sites and Allergan’s field sales force, according Henry Lee, senior vice president and director of client services at Costa Mesa-based Pacific Communications, a marketing unit of Allergan.
The company also gets a boost from doctors who do their own advertising for procedures using Allergan’s products, including Lap-Band, a weight-loss device that’s a billboard staple along local freeways.
Agencies: Pacific, Grey Group.
Irvine-based FreeCredit Report.com
The unit of Experian Group Ltd. spends an estimated $300 million on advertising, including a campaign built around down-on- their-luck musicians concerned about their credit scores.
A large part of FreeCreditReport’s current plans includes exclusive ads with some of the biggest cable channels including FX, USA, Fox Sports and VH1.
The company, which provides free credit reports for those who sign up for its monthly credit score tracking service, also is doing Internet campaigns including a “Roommate of the Year” contest and a Facebook fan page for its quirky TV spots.
Agency: The Martin Agency in Virgina.
Irvine-based Kia Motors America Inc.
Kia, also part of Seoul-based Hyundai, spends about $260 million a year on advertising.
The automaker’s advertising of late has been geared toward young people with brisk sales of its quirky, boxy Soul.
The company is the only auto sponsor of the 2008 and 2009 Vans Warped Tour, a music and extreme sports festival that kicks off this month. It’s also done marketing campaigns with Viacom Inc.’s MTV, Cartoon Network LP’s “Adult Swim” and Microsoft Corp.’s Xbox 360.
Kia also sponsors the National Basketball Association and has deals with 16 NBA teams.
The company expects to launch its Forte sedan in July.
Agency: David & Goliath; in El Segundo.
Irvine-based Mazda North American Operations
The automaker, part of Japan’s Mazda Motor Corp., spends about $215 million a year on advertising. The company’s “Zoom-Zoom” commercials are among the catchiest of local advertisers.
Like others, Mazda’s become more selective with its marketing.
“Budgets are all smaller than they used to be, causing us to use more of a rifle-shot approach to marketing than a shotgun approach,” spokesman Jeremy Barnes said.
Mazda’s sales were down 33% for the five months through May versus a year earlier.
The automaker is in its eighth year as name sponsor for the Mazda Raceway Laguna Seca in Monterey. Along with naming rights and signs, Mazda does product development at the world-famous race circuit.
Mazda also has other racing partnerships.
Agency: W.B. Doner & Co. in Newport Beach.
Anaheim’s Disneyland Resort
Walt Disney Co.’s two theme parks, three hotels and shopping center in Anaheim do an estimated $90 million in yearly advertising.
Disney relies on TV and radio spots along with billboards and direct mail to bring visitors to Anaheim. It also does a lot of marketing on its own networks, including Disney Channel and ABC. A recent episode of “America’s Funniest Home Videos” doubled as an infomercial for timeshares opening at Disney’s Grand Californian Hotel & Spa in Anaheim.
Advertising for Disney in Anaheim is down from 2005, when the company made a big push around the 50th anniversary of Disneyland.
These days, Disney has been pushing promotions to drive visitors during the recession.
With no major rides opening this summer, Disney is promoting evening parades, fireworks and other entertainment in what the company calls “Nightastic.”
Irvine Company
The county’s dominant real estate company spends an estimated $50 million advertising its apartments, shopping centers, hotels and office buildings.
Newport Beach-based Irvine Co. is a big advertiser on local cable TV, newspapers, online and in magazines, including its own Rental Living, which showcases its apartments.
Irvine-based Boost Mobile LLC
The prepaid mobile phone division of Overland Park, Kan.-based Sprint Nextel Corp. spends an estimated $35 million on advertising with commercials, print ads and sponsorships.
Boost sponsors IndyCar Series star driver Danica Patrick along with Motorola Inc. It also plans to show commercials in movie theaters before the upcoming summer blockbuster “Transformers: Revenge of the Fallen.”
Boost is working with Miami-based Burger King Holdings Inc. to sponsor a six-city FamFest tour in June and July featuring free family activities, a live concert by R & B; singer Mario, free food and other giveaways.
A second phase of Boost’s Hispanic marketing push is due at the end of July.
Agency: 180 L.A. of Los Angeles.
