NewsLine Column: What Lies Ahead In 2003?

With 2003 well and truly underway Media Planning Group’s Denise Turner looks at what lies ahead for the advertising industry…

The 21st century marches on, 2002 is over and 2003 is already a week old. Last year was spent trying to recover from the hangover of the uncertainties of 2001, especially September 11th. Businesses were still being cautious, particularly in the area of marketing and advertising expenditure, although there were some signs of recovery.

So what does 2003 hold for us? Will it be a success? Opinions are varied as to how good this year will be. Some forecasts indicate that the signs of recovery are just around the corner and are predicting a gentle upswing for the advertising industry. Others believe that growth will not come until 2004 at the earliest.

One of the major issues that could affect us and any growth that we might see is the possibility of a war with Iraq. The Gulf War saw the rise in importance of news channels such as CNN. And there are those that argue that media placement planning should recognise the increased viewing/readership/surfing of news environments. But higher ratings for such channels could have a detrimental effect as advertisers may not want to be associated with war. We could see a similar effect in press – many early main news press sites could be lost due to extended coverage of events. And again clients may not want to be placed within ‘war’ editorial and the associated ‘feel bad’ factor.

On a broader scale, however, war does have a serious effect on our industry and that naturally varies according to the categories and advertisers involved. The airline business with its particularly high levels of capital investment and short-medium term inflexibilities can be hit particularly hard. The cost of oil and therefore flying increases whilst confidence and willingness to fly bottoms out. The net result is what airlines fear the most and simply can’t afford to do and that is fly fresh air back and forth. So in many cases airlines will drastically reduce advertising expenditure in an industry that is still recovering from the effects of September 11th. Some clients would be hit very hard and almost instantly with the predictable knock on effects that that has for their agencies.

The far more serious affect of a war in Iraq, however, is the impact that it would undoubtedly have on the global oil markets. As in 1991 the cost per barrel would drastically increase and would be highly likely to cause the global economy’s shaky recovery to regress. For advertising is an industry that tends to mirror the confidence in an economy and not necessarily the economy itself. So another war in the Middle East could spell grave uncertainty and all that goes with it.

So at the start of 2003 should our prognosis be one of cautious optimism? Or will we be at the mercy of factors outside our control? Only time will tell.

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