US Adspend Holds Up Despite War

28 March 2003

Entrail-rakers and economists are twitchy folk at the best of times – and this is not the best of times. Although most analysts and media commentators are relieved there is as yet no sizeable fall-off in ad revenues due to the war on Iraq, there is an outbreak of sweaty palms and differing of opinion as to how damaging the effects of the war will be in the longer term.

In the main, TV and radio have held back from continuous war coverage, allowing normal program schedules to run - and there is widely varying guesswork about the amount of adspend lost over the last seven days. Estimates vary from under $100 million (€93.42m; £63.63m) to $250m.

The usual talking heads are not backward in sharing their guesswork. As ever, Merrill Lynch’s resident advertising clairvoyant Lauren Rich Fine is to the fore, even though her published prognostications over the past year have been none too impressive [WAMN: 09-Sep-03].

“To the degree it is a short war, the money could come flying back, re-expressed in the second or third quarter,” she opined sapiently. “But that could change if the war changes and there's wall-to-wall coverage.”

Another spread-odds bettor is Robert J Coen, senior vice president and forecasting director at Universal McCann in New York. “ I’ve got scenarios all over the place, six one way, six the other,” he admitted. “At the present time, I don't have any good, strong reasons for changing my current forecast one way or the other. I would hold for another couple of weeks before reassessing.”

America’s largest advertiser General Motors said: “We're not running ads in anything devoted 100 percent to war coverage but we're keeping our normal presence in sports, entertainment and general news, which may include some war news.”

Number two advertiser Procter & Gamble revealed it was “getting back to normal” after a 48-hour advertising moratorium starting Wednesday last week. The firm’s media buys are proceeding as planned, said a spokeswoman, except for commercials during war coverage on radio and television.

On the media front, Gary Fries, president and chief executive at the Radio Advertising Bureau in New York reported: “The mood, particularly in local markets, is not on a war plane. Car dealers are advertising, and people are shopping. People are eating out, and restaurants are advertising.”

Chris Rohrs, president of the Television Bureau of Advertising in New York, representing local TV stations thought otherwise, noting that there had been a slowdown in ad spending this month – less because of the war but “because of the buildup to war, which slowed things for about two weeks.”

“Advertisers realize viewers welcome advertising as a reassurance of normalcy,” Rohrs continued, “which contributed to keeping commercials in the mix instead of going `wall to wall' … most of the dollars that were moved or pulled are going to be recoverable, But I'd use a `but' with a capital `B,' because it depends on events [in Iraq].”

Representatives both of the Magazine Publishers of America and Newspaper National Network offered like opinions.

Data sourced from: New York Times; additional content by WARC staff