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economy? Who knows?
Key will be how Americans react to the bombings
By Elizabeth White
As New York digs out from the wreckage of Tuesday's bombings, many in media are pondering just what effects the tragedy will have on the U.S. economy as a whole and on media spending in particular.
Will advertisers pull back in panic, or will they decide the aftermath of such a tragedy is an ideal time to put reassuring messages before consumers?
As with so many things related to this tragedy, opinions vary widely. The general consensus is that it is simply too early to say. Some analysts say they won't have any indication until after Monday, when stock trading resumes.
But most agree that much will depend on the leadership President Bush provides the nation and how Americans respond to the tragedy.
"My own expectation is that this is going to be a serious hit to advertising budgets, and the economy will really take a tremendous hit as a result," says Allen Banks, executive media director of Saatchi & Saatchi in New York.
"The expectation is that oil is going to be more expensive and that energy costs will go up. We're talking about $30-plus billion of loss effect in lower Manhattan, and that has to have a ripple effect. It can't be just business as usual."
There is already a significant loss in ad dollars to both television and print media, with some advertisers trimming back or entirely pulling out of newspapers and newsmagazines. Much of that advertising is being rescheduled, but some will surely disappear entirely.
The networks are reported to be losing as much as $100 million a day with their nonstop, commercial-free news.
"We've said $320 million for three continuous days without commercials," says Deana Myers, an analyst with Paul Kagan Associates in Los Angeles. "That’s probably a little on the high side because it’s still summer, but it's about that much.
"The networks say that the ad revenues are not the important thing right now. They’ll probably be able to recover some of the ad revenues later, but there will also be different issues," says Myers.
"Airlines may not be advertising, and some global brands, holiday operators and banks are said to be skeptical."
The airline industry is expected to have one of the largest financial aftermaths from the attacks, with early reports estimating the cost to world airlines at as much as $10 billion.
Yet some say that the airlines may push forward with advertising in order to assure consumers that it is safe to fly.
"Maybe the airlines won’t advertise, but I think they would be very interested, if not in brand and image advertising so much as reassuring, yeah-it's-ok-to-fly advertising," says Sean Carton, managing partner at Carton D'Onofrio Interactive, a Baltimore-based agency.
"We've been talking to our clients, and nobody really knows what to do yet. I would expect to see a lot of people coming out and doing the we-support-the-people-who-were-there sort of thing and reassuring people that their business is OK."
Paul Benjou, vice president and director of media services at Mediaplex, also thinks that advertising content may be affected more than advertising dollars.
"I don't think there's going to be any significant impact on our business," says Benjou.
"I believe that under any kind of disaster situation--airlines are a good example--airlines traditionally pull their advertising for a while. That's not an abnormal reaction to a disaster. But I haven't seen any clients pulling back because of this. The resiliency of not only the city but the entire ad community is very strong."
"Other industries may be considering an advertising pullback, but I think it would be a mistake," says Benjou.
"They should show their resolve and move forward. If anything, now is when the financial community should show strength and resolve even more than they have in the past, just to support the confidence level in the American consumer and show the consumer that we're here, we're strong, your money is not going to go away."
September 14, 2001 © 2001 Media Life
-Elizabeth White is a staff writer for
Media Life.
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