As Madison Avenue continues to re-evaluate what exactly business as usual may mean after last week, analysts are pondering the short- and long-term effects on advertising related to consumer mood and the direction of the economy.
Meantime, industry organizations like the Advertising Council and the American Association of Advertising Agencies are beginning to coordinate a response — perhaps tardily, according to some executives who had sought action before now.
How consumer spending bears up in coming days and weeks is crucial, said Alan J. Gottesman, an analyst at West End Communications/Consulting in New York, because in crises, marketers have a simple strategy: "If you think consumers are not going to buy, you stop selling to them. If it looks like people are out there buying stuff, the people who make stuff will be out there selling stuff. Period. End of analysis."
CMR, formerly Competitive Media Reporting, which tracks local and national advertising spending in major media, said categories that were particularly vulnerable included automotive, the largest, which typically accounts for 11.6 percent of annual American ad spending; financial services, about 6 percent; and travel and transportation, from airlines to lodging chains to car-rental companies, about 3.7 percent.
"Those categories were already down for the year," said David Peeler, president and chief executive at CMR in New York, "so this is just going to drop them again."
Other categories that may see declines, he added, are luxury goods; movies because of alterations to films and changed release dates; issue-advocacy and political advertising; and advertising by media companies. CMR is a division of Taylor Nelson Sofres.
"There's a lot of bad things to be concerned about," said Robert J. Coen, considered the leading forecaster of ad spending, because of "the uncertainty" among consumers that would probably lead them to "delay and put things off" in categories like travel. Mr. Coen is senior vice president and forecasting director at Universal McCann in New York, part of the McCann-Erickson World Group division of the Interpublic Group of Companies.
"Everything is going to be at a standstill for a period of time" as consumers digest last week's events, said Michael J. Russell Jr., an analyst at Morgan Stanley in New York. "The question is, for how long?"
Such hesitation is to be expected, he added, because "this is a bad event and consumers are going to be impacted."
As for the effect on the ad industry, Mr. Russell said: "When agencies are talking to clients to make sure everyone is O.K., that's the kind of `normalcy,' we're dealing with right now. And that should be respected."
At the same time, Mr. Coen said, "we've lost a significant amount of dollars," as the media temporarily stopped accepting advertising and many marketers withdrew to reassess their ad plans.
How long advertisers delay returning to regular schedules may help determine how severe a slowdown occurs.
"What we're busy doing this morning is seeing how we can re-express the money our advertisers did not spend in the last five days," said Dan Rank, managing partner at OMD in New York, a media agency owned by the Omnicom Group.
While "I don't have any advertiser looking at this as an opportunity to save money," Mr. Rank added, some are considering waiting a while, when the outlook may become more certain.
Demand for advertising time and space "was soft already," Mr. Rank said, because of the sluggish economy. So the process by which compensatory ads, known as make- goods, will be scheduled should proceed more smoothly, he added, than if the economy had been robust until last week.
Turning to the advertising organizations, the Advertising Council, which is the industry's clearinghouse for public service and pro bono campaigns, said yesterday that it had volunteered its services to the White House and State Department.
"It is rather eerie to remember that the Ad Council was founded during the time of our nation's crisis in World War II," said Peggy Conlon, president and chief executive at the council in New York, referring to its start after Pearl Harbor as the War Advertising Council.
"Who would have ever thought we would have an event to compare?" Ms. Conlon added.
So far, two agencies have started working on specific campaigns, Ms. Conlon said: GSD&M in Austin, Tex., part of Omnicom, is producing one "with a message of unity and diversity," centered on "film of Americans of every nationality saying `I am an American,' " and the New York office of McCann-Erickson Worldwide Advertising, part of the World Group division of Interpublic, is helping with campaigns for NYC & Company, the New York City convention and visitors bureau, and the A.F.L.- C.I.O., centered on soliciting donations for victims of the attacks.
The advertising agency association, also in New York, sent members a letter yesterday from O. Burtch Drake, president and chief executive, in which he asked them to contact Ms. Conlon and the council "if your agency is contemplating preparing, or has been approached to develop, disaster-related messages."
The board of the agency association is to meet next Tuesday in New York, he added, "to discuss what additional steps can and should be taken."
As for complaints from some executives about a delayed response from the industry organizations for instance, the association board will not meet until two weeks after the attacks — Ms. Conlon said that "communications with our campaign sponsors and government contacts have been difficult."
There were logistical problems as well. Mr. Drake and John J. Sarsen Jr., president and chief executive at the Association of National Advertisers in New York, the trade organization for marketers, were unable to return to their offices last week because, coincidentally, they were both out of town on business and had difficulties returning to New York.
Some national television networks are undertaking separate public service initiatives.
CBS "is shooting public service announcements today with a lot of our stars for the Red Cross and other relief agencies," said George Schweitzer, executive vice president for marketing at the CBS Television Network division of CBS in New York, part of Viacom, "and we want to get them on the air as soon as we can."
"It's not `Watch my show,' " Mr. Schweitzer added, "The point is what they're saying about assisting."
And the NBC Television Network division of NBC in New York, owned by the General Electric Company, began showing earlier than planned a new series of commercials in its long-running public service campaign, carrying the theme "The more you know." The new spots, produced in-house, seek to fight violence and prejudice and promote tolerance.
"We thought they had some particular application so we began running them on Saturday," said Kassie Canter, senior vice president for corporate communications at the network. "We also introduced some spots on Friday encouraging viewers to contribute to the Red Cross and the Salvation Army."
Stuart Elliott, The New York Times. September 18, 2001
Copyright © 2001 The New York Times Company. All rights reserved.