NewsLine Column: Counting The Cost Of Conflict
Geoffrey Russell, director of media affairs at the IPA, discusses how the continuing war with Iraq will affect the already battered advertising industry.
The UK advertising industry does not like publicly voicing concerns about potential falls in media expenditure. In a world in which client confidence is all too easy to shake, worries, once expressed, have a horrible habit of turning into reality. And yet it is very difficult to avoid something as all-dominating as a major war in the Middle East.
According to reports, America’s six leading TV networks could lose up to $350 million in advertising revenue in the opening weeks of the fighting against Iraq, as companies pull back from advertising in an effort to avoid possibly upsetting their customers.
In the United States, household names like Procter & Gamble, Nissan, Visa and General Motors are either cutting right back or considering their options, adding to another section of the country praying for a rapid conclusion to what at least at this stage looks like turning into a prolonged and bloody conflict.
And what is happening in the USA is being mirrored in the UK.
Major media owners like Granada and Daily Mail & General Trust have hinted darkly about the potential repercussions of the war, while city analysts have scurried off to assess the potential damage.
Based on experience during the Gulf conflict, media spending could drop by 10% – but in reality nobody knows. The war to free Kuwait was a quick effort with limited objectives and fought largely with the blessing of the UN.
Experience of the latest fighting suggests a very different situation and one senses a real dilemma on the part of the broadcasters as they grapple with the hideously expensive need to keep people informed about events in Iraq, while at the same time working to preserve their advertising revenue.
Airlines and holiday companies have understandably shown themselves to be nervous – others are concerned that their advertising does not crop up in the midst of war coverage. Beers, entertainment and oil companies are sure to be cautious. For some with humorous commercials the risk of appearing in the midst of tragedy is a recurrent nightmare.
And yet life has to go on. People will still be going to the supermarket, buying cosmetics and eating out. We are far from being part of an all embracing conflict like World War II and dare I say it, there are already hints in some quarters that having failed to see a rapid victory the public is beginning, after little more than a week, to grow slightly tired of the extended news bulletins.
Normality, as they say, has a habit of reassessing itself. As horrible and as soul searing as war is, unless it affects you personally, the world continues.
But where does this leave the advertising industry? Like Prime Minister Blair and President Bush, advertisers will be hoping that the fighting is over quickly. What happens next is anyone’s guess.
After the last Gulf War there was a massive upturn in demand. For the time being most of us, would settle for a little stability and the gradual recovery of an industry which has already suffered more than its fair share.
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