In the Persian Gulf war’s first 24 hours alone, the three broadcast networks and Cable News Network combined temporarily displaced around $20 million worth of advertising time. How much the shifted ad dollars actually will cost the nets, however, won’t be determined until the desert dust settles.
When the conflict began at about 7 p.m. EST Jan. 16, CBS, NBC and CNN dropped all commercials, keeping spots off the air until early the next morning. ABC took three commercial breaks during its primetime coverage on the 16th and occasionally aired spots as the crisis continued on.
(Leading up to the gulf deadline the night of Jan. 15, ABC had told advertisers that if coverage went around-the-clock, the net would continue to air commercials, although only when appropriate, according to an ABC News spokeswoman.)
The broadcast networks annually garner some $9.5 billion in advertising revenues, representing about $8 million in billings a day. CNN bills roughly $1 million a day. But because ad sales are typically slow in January and the advertising market already is depressed because of the recession, ad execs estimate the daily billing figure to be much lower.
It’s unclear, in fact, if the networks will see any actual loss in income or whether the buys would be rescheduled until the nets get back onto a regular broadcast cycle.
“The networks are confident that the advertisers will do everything they can to reinvest the money,” said John Sisk, senior v.p. at J. Walter Thompson. “Advertisers are willing to cooperate where they can.”
According to John Mattimore, a v.p. at Backer Spielvogel Bates, some clients have said they don’t want to be part of 24-hour news coverage or adjacent to news updates. “We’re looking at it on a client-to-client basis,” he explained. “Some clients want their money back and some are willing to wait.”
Advertisers not airing spots during the crisis include the following:
* TWA, which has a $47 million annual ad budget. It has vowed not to place new advertising in any media until the gulf situation has been settled.
* General Motors, one of tv’s largest advertisers, which has suspended all ad spots until the networks resume regular programming schedules.
“We will continue to meet whatever previous ad commitments we have [such as through rescheduling],” said a GM spokesman, who added that for the duration of the crisis no corporate or divisional GM spots will air during news coverage.
Toyota and Clorox, which have notified the webs to suspend airing their spots until the crisis is settled.
Not all advertisers are shying away from the newscasts, however. A spokesman for Anheuser-Busch said the company was not changing its marketing plans, although the beer giant understands that commercials that do air have to reflect the mood of the company.
And although some advertisers decided to back out of the National Football League playoffs scheduled to be held over the weekend, including United Airlines and the U.S. Army, other advertisers reportedly have picked up the slack, albeit at lower-than-normal pricing.
Reduced prices during the crisis already appears to be the norm. When CNN and the broadcast networks increased their commercial loads during the day on Jan. 17 on a limited basis, those spots were either bought on the open market at drastically reduced prices or were used as make-goods, according to an advertising source.
“There are scavengers who are willing to buy into anything on the air,” said one agency source. Any lost advertising dollars obviously would add to the huge cost of covering the war. It is estimated that gulf war news expenses would meet or exceed $1 million a week.