By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – This is a hard call - do you limit advertising during war, out of respect for the somber undertaking, or do you attempt to keep as much normalcy as possible? It looks like the latter was chosen and that's good. I'm Maxine Shapiro with KERA Marketplace Midday.
Before the war began, it was estimated that $400 million worth of advertising would be postponed or pulled. That number is now being revised down to less than $100 million. Some see this move almost as part of the strategy of the war. It's important to keep the wheels of the economy moving, and advertising is an indispensable spoke. Psychologically, it also assists in keeping our feet on the ground while are hearts and heads might be filled with worry. It's a great diversion. No one wants to appear disrespectful, and no one is. But resuming the ads on the news stations was the most realistic move. It helped when after this past weekend it was reported consumers shopped and dined out and went to movies almost at a normal pace. Box office sales were just off slightly.
Madison Avenue, though, is pretty careful about what they're doing. The New York Times tells us not to expect to see any airlines, brokerage firms or luxury items during the station break.
But for the already-strapped media outlets, even the $100 million drop in advertising is going to hurt them. In some cases, television networks will have to give cash back to advertisers. Ads bought in the first quarter of the year are typically more expensive then in the second quarter. As one TV executive said, it's important to be sensitive to the advertisers, but on the other hand, they have a business to run. It's on a case-to-case basis. If an advertiser want to pull out of an entertainment show, it might be more difficult to get out of their contract. Magazines didn't report any major pullouts last week. When discussing future bookings, a leading executive told AdAge, it's "like someone pulled a cord out of the wall."
As the war progresses and news intensifies, contract or no contract, the ads will be gone. I never thought I'd see the day I'd be happy to see a commercial break. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m. To contact Maxine Shapiro, please send emails to mshapiro@kera.org.
Email Maxine Shapiro about this story.