• by Paul Gough , April 6, 2003

The war in Iraq probably won't do much to affect the upfront, particularly if hostilities end before the TV buying starts in mid-May.

That's the opinion of at least some people in the media industry, who are optimistic that whatever's happening in the world right now isn't going to do much to blunt demand for time in broadcast and cable TV.

"There's a cloud of spending right now because we're in the midst of war. However, given that we see a swift and favorable outcome in the Middle East, we should be back to business by the time the upfront selling season actually starts," said Joe Abruzzese, VP of advertising sales at the Discovery Networks and a veteran of many an upfront when he was head of sales at CBS TV.

The spirit of business unexpectedly lifted last year's upfront to a record $8 billion level. Before the war, many in the industry predicted a repeat performance and many were predicting double-digit CPM increases for broadcast TV. Some remain optimistic but others say while there may not be explosive growth they believe upfront ad spending will remain slightly up or perhaps flat. But that will have more to do with the dynamics of the economy and not what's happening on the battlefield.

"The upfront probably will be up but I don't think it will be as much as it was expected," said Brad Adgate, director of research at Horizon Media in New York. The upfront is all about looking ahead. Adgate thinks that the war in Iraq is a short-term concern and not something that's going to affect the media industry in the long run. "When buying upfront, you obviously have to look 12 months in advance. You'd think that even by May or June, when the negotiations take place, that this hopefully at least we'll see the end of the tunnel for what's going on in Iraq," he said.

An advertising researcher thinks that the war won't do much to dampen the market. "The upfront is bought so many months in advance and there's always so much uncertainty surrounding it," said Lance Kinney, an assistant professor of advertising at the University of Alabama. He said that during the upfront, advertisers normally gamble that returning shows will retain their audience and that new shows will gain viewers. "There's a level of uncertainty that advertisers tolerate and understand," he said. Kinney predicts that TV upfront spending will be flat or up in the low single digits, but more because of uncertainties in the domestic economy rather than the war.

"If we weren't in a war right now, advertisers would still have those concerns. The war itself is a pretty short-term concern in terms of the economic impact," Kinney said.

If advertisers say there's not going to be a war-related problem in the media industry, Americans are telling advertisers and the media industry not to be cowed by fear. Mullen, the Wenham, Mass.-based Interpublic subsidiary, surveyed consumers a day before the war started and again last week, two weeks into the war. Sixty-three percent of those surveyed before the war didn't want advertisers to change plans; two weeks later, 78% of those surveyed wanted to life to carry on as normal. Fewer fear shopping in malls or investing in the stock market today than they did before the began.

Ted Nelson, director of brand/strategic planning at Mullen, said the message was clear: That the American public is living with risk pretty well and think it's unpatriotic to make changes because of the war. "I think people are feeling more comfortable on the home front ... We're rallying behind business as usual," he said.

Adgate said that some categories - airlines and travel, for instance - might be dampened but strong demand in automotive, entertainment, technology and telecom will make up for it.

"There's an awful lot of product categories out there. I think that advertisers in a lot of product categories are competitive. If you don't advertise over a period of time, you kind of have to start all over to remind consumers," he said. Adgate said there are many new products and new product categories that are going to pay a premium to get advertising time.