The impact of the Iraqi war on US advertising is being exaggerated and overall losses could be as low as $100 million, according to Jack Myers Report.
The implications of war for the economy are not clear cut (see
INSIGHTanalysis: War And The Ad Economy) but it is estimated that $130 to $150 million worth of advertising was removed from TV schedules during the first week of the conflict as broadcasters allocated time to rolling news coverage and marketers kept their distance.
However, Myers is at pains to point out that much of this ad spending was postponed, rather than cancelled. Moreover, prominent networks such as CBS, returned to limited regular programming soon after the outbreak of hostilities and almost three-quarters of advertisers who had pulled commercials during the first 48 hours of the war are either back on the air or are planning to return by the end of this week. Larry Goodman, President of Sales for CNN, is quoted as saying that there has been a “quicker return to a normal advertising climate than there was during and following the 1991 Gulf conflict.”
Myers asserts that most losses will ultimately be recouped through make-goods and replacement schedules and he is dismissive of other media observers, some of whom are predicting that war-related lost revenues could be as high as $2 billion. “This estimate is naive and paints an unfairly bleak picture of network economics,” he insists.
The Myers report claims that of the $250 million of lost revenues expected in the four weeks after the start of war, between 45 and 60% will be recovered by the industry and re-invested in future advertising schedules. This is assuming that the conflict contines at its present pace and that there are no major acts of terrorism in the US. As a result, the author is confident that overall losses will total between $100 million and $200 million, hardly a cause for concern in the wider scale of things.
