Business as Usual?

Its almost a week now that the U.S. has been officially at War with Iraq and other than the omnipresent sound of helicopters cruising around San Francisco, it would appear as though it is back to business as usual for most of the people that I encounter.

So far, the distress of the world has not had too much of an effect on our everyday business. The stock market had a rather interesting run of 8 positive days and there have been no published reports of any other changes in ad spend projections or other financial indicators that would seem to signal a change in the American economic climate. Is it possible that this conflict will not affect our world much from day to day? Don't count on it.

It is still too early to tell if the War will have a negative impact, but over the coming weeks we may see some indicators that will help us determine what will happen to our daily business:

If the White House changes its tune in the slightest...
about our ability to make progress against the regime of Saddam Hussein, then you can expect that the markets will reflect this in their performance. Any indicator that is contrary to our projected impact of the War will have a negative impact on the economy, and as such could have an effect on ad spending.



If the actual War extends too far into the summer months...
then the potential impact on Q4 may be felt. Right now the fourth quarter is still very far away, but as more companies begin to plan their ad spending for late in Q3 and into the holidays, they may hold off slightly to see what the impact will be on consumer confidence, which could be reflected in ad spend as well. If consumer confidence is low heading into the latter part of the year due to a concern for governmental spending and/or retaliatory terrorist attacks, then ad budgets will be reflective of this. This translates into the fact that you may be getting a number of RFP's right now, but they may take longer to lock in based on the instability of the conflict.

If protesting in major cities continues at even a portion of what we saw last week...
then the impact on local economies will be even more significant. Here in San Francisco, the Mayor's office estimated the price tag for Policing and managing the protests last week at somewhere between $450,000-$850,000 per day. This would have a severe impact on the local tax situation as well as the fact that these protests had an impact on local business as they were forced to shut down to avoid violence and other negative implications, which results in less business and lower revenues. This could have a similar effect on consumer confidence, which translates into ad spending as well.

If there is any sort of major terrorist threat to the U.S...
the impact would be devastating on our consumer confidence. The shadow of September 11th still hangs like a shroud over our economic status and a blow of any sort would serve only to weaken our knees.

So what do we do? We continue on our current path and service our businesses as we would at any other juncture of the year. We support our troops in mind and in spirit and we do our best to keep America working in a "business as usual" format, anticipating the best and having contingencies for anything less. It is a tenuous balance that we have to work with, but our ability to steer the ship in the right direction is what will keep us afloat.

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