With the broadcast networks offering around-the-clock coverage of the terrorist attacks in New York and Washington last week, advertisers were left pondering when and with what tone they might return to the airwaves.
Already sapped by a sagging advertising marketplace, the Big Four broadcast networks alone (ABC, CBS, NBC and Fox) lost a total of $150-160 million in ad revenue from Tuesday through Friday, not including the costs associated with news gathering. Moreover, three of the Big Four lost another $35-40 million in total from the cancellation of the weekend's National Football League games, although those games will be made up later in the season.
In addition, advertisers in categories including aviation, travel, finance, insurance and entertainment were contacting the networks to pull ads that were scheduled to run once the networks resumed regular programming. In every instance, the networks complied without question.
"A lot of commercials have that 'happy, happy, buy me' tone, which will just not be appropriate at this point in time," conceded one network sales executive.
The highest-profile advertiser to pull spots is Coca-Cola, albeit only for the next week. At the other end of the spectrum, the Catholic League, which had scheduled a membership-solicitation campaign to run on cable, has put its spots on hold indefinitely. "It is nothing if not scurrilous to exploit a tragic moment like this for the self-interest of any individual or organization," said Catholic League president William Donohue.
Still, at least for now, major media buyers say those among their clients who may be pulling ads do intend to come back into the marketplace. Additionally, these buyers believe the money that was displaced last week by news coverage will be re-expressed, probably in the fourth quarter.
"The TV network execs have been phenomenal," said Dan Rank, director of national broadcast for media buyer OMD. "They totally appreciate that some of our advertising is not going to be appropriate, and they are being very considerate about letting us pull out. Technically, they could have held us to our commitments."
Rank added, "The networks have been pretty good about serving the public needs and not thinking about just their cash registers."
Michael Mandelker, UPN's evp of network sales, said cooperation between the networks and media buyers has been extraordinary. "I've never seen this type of un selfishness on the part of the TV industry," he said. "We received a few calls from buyers saying their clients just don't want to be on the air, and we've honored that."
UPN, which does not have a net work news operation, pre-empted its prime-time programming on the first night of the crisis to leave coverage to its affiliates. It began feeding its regular prime-time programming the next night. However, affiliates, particularly those in New York and D.C., remained free to continue airing news coverage.
Dealing $150 million in displaced ads on the Big Four networks will be somewhat complex because they were to run across four dayparts-morning, daytime, evening news and prime time. In most instances, money will be rebated unless the advertiser wants to re-express. Most buyers expect advertisers to choose the latter. "I don't think there are any clients that are looking at this as an opportunity to save money," said Rank.
One buyer, who requested anonymity, pointed out that all of the broadcast and cable networks have sizable commercial time holes to fill in the fourth quarter, so moving third-quarter money there should be a simple and smooth transition. "This could actually benefit the advertisers by getting them into better-quality [new fall] programming and the networks by tightening up inventory, which could help them in the soft scatter market," the buyer said.
Most buyers contacted for this story expect to begin talking with network sales executives this week to see how to redeploy the ad dollars. Amicable solutions are expected. "The TV marketplace is one of long-term partnerships between advertisers and the networks," said John Rash, chief broadcast negotiator for Campbell Mithun. "We will come together and find equitable solutions."
Cable networks that are part of media conglomerates also took revenue hits by foregoing adver- tising. All-news CNN, owned by the increasingly bottom-line-driven AOL Time Warner, dropped its advertising once the crisis began. Soon after, CNN's sister cable networks, TBS Superstation and TNT, picked up the CNN feed. Last Tuesday in prime time, Viacom-owned cable networks MTV, VH1 and BET canned their entertainment programming and commercials and aired CBS News.
CNN continued to telecast in a commercial-free environment into Friday, while TBS and TNT went back to their regular entertainment schedules with commercials last Wednesday. Ads considered inappropriate by the networks were automatically pulled.
Compounding the financial burden for the networks is the increased manpower and production costs they have had to bear for their news divisions covering the events in New York, Washington and other markets where FBI investigations are breaking news. Since news coverage was rapid-fire and ongoing, costs could not be ascertained. But Sandy Genelius, a representative for CBS News, said her network's news division had called in "every able-bodied employee" and also hired freelancers.
"The cost of covering this is enormous, and there is no revenue coming in," said one network executive. "But there are times when you do things like this because it is the right thing to do. The media conglomerates have taken their share of criticism for caring only about profits, but in this case they are doing it for the public. They know that people are getting their most immediate information from television." (It is also true that every broadcast station is bound to public service by virtue of its FCC license.)
Some 60 million people watched prime-time news coverage on the Big Four broadcast networks on Tuesday night. CNN, Fox News Channel and MSNBC drew a combined 15 million viewers on the first night of coverage.
In addition to pre-empting regular programming on their own, the broadcast networks and cable sports networks all had holes to fill over the weekend caused by the postponement of college football games by the collegiate sports conferences and of professional games suspended by Major League Baseball and the National Football League.
CBS replaced its college and NFL games with movies and filmed sports specials. Fox was scheduled to return the time to its local affiliates. With no sporting events to show on Thursday night, Fox Sports Net ran a still shot of the American flag with a streamer announcing postponement of the MLB and NFL games.
Advertisers scheduled to run spots during the postponed sporting events will receive make-good ads to air when the games are eventually played. A Fox executive said if this past weekend's games are not made up later in the season, the NFL will be asked for some type of licensing-fee adjustment.
Looking ahead to the new TV season, NBC and CBS last week said they were delaying the introduction of new shows scheduled for this week until next week. The WB delayed the premiere of its new kids' programming season from Sept. 15 to Sept. 29.
Fox replaced its scheduled Sunday night movie Independence Day, in which the White House is blown up, with the tamer Mrs. Doubtfire, and replaced a movie scheduled for tonight, Rats, with The Nutty Professor.
John Consoli, ADWEEK. September 17, 2001
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