After the U.S. began striking targets in Iraq late Wednesday, major American marketers began pulling their advertising from television and other media as planned. But media analysts say the commercial losses should be short-term unless a prolonged war damages the U.S. economy.
BY MIDDAY Thursday, the broadcast television networks had switched to 24-hour news programming and were expecting to suspend all advertising for the first few days of war. Even before the so-called “shock and awe” campaign began in Iraq, Procter & Gamble removed all its commercials from television, the start of the packaged goods giant’s 48-hour advertising blackout from the broadcast networks.
Once the TV networks switched to ongoing coverage, MasterCard, which has been promoting its long-running “Priceless campaign, planned to pull of its advertising, including TV, online, print and radio.
It’s unclear whether MasterCard will air its new commercial, which features the classic song “Homeward Bound,” during the Academy Awards telecast on Sunday, March 23, the company said.
“MasterCard is monitoring emerging developments, reviewing the impact of the situation on television programming and assessing consumer sentiment,” the company said in a statement.
As of Wednesday evening, American Express pulled all TV, radio and newspaper ads for the next 48-72 hours, said spokeswoman Desiree Fish.
“Then we’ll decide what to do going forward,” she said. American Express does plan to go ahead with advertising during the Oscars on Sunday.
On the Internet, Yahoo! and AOL responded to the events by stripping ads from their front screens. AOL pulled ads off the Welcome Screen, AOL News and select other areas, including CNN.com and Time.com, about midnight Wednesday, said AOL spokeswoman Ruth Sarfaty. Early Thursday Yahoo! redesigned its home page to be completely news-oriented, removing advertisements from the front screen and main news page, according to a spokeswoman.
Additionally, MSNBC.com on Wednesday night removed advertising from its home page, news and opinion sections, for a planned 48 hours, according to editor-in-chief Dean Wright. At that point, MSNBC.com will consider whether to extend the blackout.
At both Yahoo! and AOL, select advertisers requested their campaigns be dropped temporarily, the companies said.
An online advertising executive said there was no indication of widespread cancellation of marketing campaigns, although publishers had set up contingency plans for advertisers who wanted out of news coverage.
“We have been working closely with the publisher community and we expect that there will be increased flexibility, including opt-out clauses that will allow clients to pull ads if necessary or make changes to creative or placement,” said Brian McAndrews, chief executive of Avenue A, a digital marketing agency.
Media analysts estimate that the broadcast and news networks could lose tens of millions of dollars in ad revenue a day with a switch to wall-to-wall news coverage. TV networks lost as much as $200 million in revenues when they stopped airing commercial in the days immediately following the September 11 attacks.
But unlike after the tragedy of 9/11, the media and marketers are prepared for the Iraq bombings and have contingency plans such as reducing time for network self-promotion to make room for paid commercials or to shift commercials into war-free programming.
The marketers contacted by MSNBC.com all said they were closely monitoring the situation in Iraq and planned to return to their regularly scheduled campaigns.
“We’re looking at it on an ongoing basis and will seek to return to advertising as soon as we feel is appropriate,” said Joe Carberry, spokesman for Visa International. Visa pulled ads from broadcast networks when news coverage began Thursday.
Although marketers have been quick to retreat from advertising during war coverage, branding experts cautioned that the ad blackout should be as brief as possible.
“Consumers want marketers to show an uninterrupted flow of products and services during a wartime economy,” said Robert Passikoff, president of New York consulting firm Brand Keys. “It’s not a question of whether you advertise, it becomes a question of what you advertise.”
To that effect, the Direct Marketing Association issued content guidelines for marketers Thursday, cautioning against overt flag-waving or humorous campaigns that might be deemed insensitive by consumers.
As long as commercial-free news coverage doesn’t go past 72 hours, the networks won’t lose significant amounts of ad revenue because of war coverage, said Jack Myers, media analyst with The Myers Report newsletter.
“We’re in a strong media economic cycle with pent-up demand as opposed to a recessionary period with virtually no demand,” said Myers.
It’s also possible that as TV networks could make back some of the lost ad revenue when they return to regular entertainment programming. As displaced campaigns return to TV, ad prices could jump because of the increased demand and tightened commercial availability, said Joe Mandese, editor of Media Markets Daily, a Primedia newsletter.
“No network wants to lose days of revenue, but those dollars won’t dry up,” said Mandese. We’re already going into a strong advertising economy, especially for television.”
The risk comes if a sustained war negatively impact the general U.S. economy, prompting advertisers to cut their media budgets for the third and fourth quarters. Any real advertising fallout from the Iraq war will become clearer after March 30, when major advertisers have the option to cancel their third-quarter TV advertising commitments.
“Until then we don’t have a sense of what the impact is going to be.” said Myers.