Ad sales to drop in 2001, 2002
But advertisers having a hard time getting message out to distracted public

One of the biggest questions marketers are asking themselves in the wake of the September 11th attacks is about the consequences on ad spending and consumer demand.

By most accounts the immediate effects were severe. Many Canadian and U.S. networks ran commercial-free coverage of the events for the first two or three days. Some postponed the beginning of the fall television season.

But while short-term effects are heavy, the long-term picture is less clear, and many remain bullish. "Some customers asked us to postpone, or move around ads in the first week or two after," said George Goulakos, vice-president (sales and marketing) at CFCF-12. "But now we are seeing more of a 'let's get back to normal' approach."

While CFCF-12 experienced cancellations from airline and tourism clients, and one from an advertiser (reportedly Molson's) that was planning a "Party on top of the World Trade Center," contest, Goulakos sees a silver lining in the crisis.

"Forget about the loss of advertising for a moment, said Goulakos. "Television's strength was shown once again. People were glued to their sets for days after."

Goulakos is not the only optimist. Many media buyers only see slight incremental damage from the attacks.

"The U.S. economy was slowing even before September 11th, said Gilbert Paquette, vice-president of Carat Canada, a firm that places television, print, and other advertising for blue-chip clients such as Hydro Quebec and National Bank of Canada. "Many advertisers such as General Motors, (which reduced ad spending 25% in the first five months of 2000) had already cut spending significantly."

Carat Canada's U.S. parent is predicting that U.S. spending will drop by 4.0 per cent in 2001, and another 1.7 per cent in 2002, numbers which understate the decline somewhat because they don't include inflation.

"The projected decrease may sound bad, but the industry is coming off several years of strong growth," said Pacquette. "Between 1999 and 2001, ad spending increased by 14.7 per cent. So the slowdown is not as severe as it looks."

But ad spending doesn't tell the whole story. There are indications that advertising's effectiveness - already open to questioning - is dropping, at least for the next few months.

People are scared. Many, --particularly in the U.S. - feel their country in a state of war and as a result attitudes are hardening, and debate is discouraged. Policies deemed unthinkable a month ago - such as covert military operations, restrictions on press freedom, and a U.S. de facto assassination policy against suspected terrorists, - are now accepted by the public without question.

In that environment, advertisers have to watch what they say. Some have deemed the "age of irony" -black, sarcastic humor-to be over, and questioning conventional wisdom - always dangerous for advertisers - is out.

One of the victims is the airline industry. For example despite the fear prevalent among the general public, among the many ironies emerging from the plane crashes is not how dangerous air travel is, but how safe.

Most of the fatalities in the attacks were among people on the ground. Only a few hundred were air travelers. This may seem like a lot, but about 100 people die in car accidents every week in the U.S., while the September 11th attacks were a one-in-a-century event. To give an idea of how safe air travel is, during 1998, not a single passenger on a scheduled U.S. flight died on a U.S. airline.

But in today's climate - with governments seeing terrorists behind every door and networks endlessly broadcasting crash footage --there is no way airlines can talk about their safety record, which is actually quite good.

It appears that even under existing security arangements, the hijackers were unable to get a single firearm on board, and likely pulled of the job with nothing but knives and sharp objects. The fact that a pistol in each cockpit and a deadbolt their doors would make a repeat of these attacks just about impossible, will do little to calm the public in the short term.

In this environment, people don't care as much about what brand of jeans Britney Spears wore on television last night. And it's probably not the best time for marketers to be putting out a new brand of toothpaste.

As one ad industry executive told industry rag Marketing magazine: "The most immediate impact (of the attacks) is that it puts things in perspective about how seemingly insignificant what we do is in the face of this kind of thing."


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