Terror Attacks: The Media Costs

Two weeks after the terrorist attacks in the US, the cost of the event to the media in Europe and the US is beginning to be calculated. In general the approach to news coverage of the attacks and aftermath have been well thought of, but there was a high cost in the necessary pulling of advertising, the resultant further downturn in the market due to lack of confidence (see ‘Deteriorating Prospects’ For Media Sector) and the costs to news services of covering the disaster, which are expected to spiral.

Advertising agencies’ job losses due to the existing difficulties in the advertising market, are now expected to increase as a result of the attacks. Today netimperative reported that AOL Time Warner has warned of a further drop in revenue growth, partly due to the cost to CNN and Time magazine of covering the events; CNN, like many US TV stations, showed no advertising during the immediate aftermath. Websites which rely heavily on advertising revenues are also expected to suffer due to an expected dramatic fall in advertising demand.

Meanwhile, the future prospects for Tempus remain uncertain, after Havas abandoned its bid for the company last week (see Havas Will Not Renew Tempus Offer) because of the worsening marketing conditions. Tempus today announced a muted set of results, and awaits a move from the remaining bidder, WPP.

In Europe, however, several major media players pledged their support for the US today by announcing a “joint initiative for freedom and compassion”. RTL Group, Bertelsmann AG and Gruner + Jahr are uniting to run advertising across German and European media tomorrow, expressing sympathy and solidarity with the victims of the attacks. A website is to be set up linking to similar initiatives, and a fund-raising drive established.

Bertelsmann chairman and CEO Thomas Middelhoff commented: “A wave of solidarity and cooperativeness has swept our company. The joint initiative between Bertelsmann, Gruner + Jahr and RTL Group will lend expression to this solidarity and embrace our viewers and readers as well.”

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