• by Ken Liebeskind , September 11, 2002

The anniversary of Sept. 11 is a time for reflection for everyone. In the advertising/media world, it's a time to reflect on what happened in the industry over the past year. There have been countless revenue reports and projections filed since then, mixed with gloom and hope. What really happened?

When one examines the numbers across the major media -- TV, radio, newspapers and magazines -- one sees drastic drops immediately after 9/11 that continued to the end of the year. A few hundred million to a half billion dollars was directly preempted from 9/11, according to one observer, who says that was the amount of inventory bumped from the airwaves immediately after the terrorist attacks.

All suffered. Network TV revenue was $12 billion for Sept. 2001, compared with $21 billion for Sept. 2000, according to Competitive Media Reporting. Revenue for Oct. 2001 was $17.8 billion, compared with $20.4 billion for Oct. 2000. Chris Rohrs, president of the Television Bureau of Advertising, says spot TV revenue was already down 11% in 2001 before Sept. 11 due to the recession, but it dropped 34% for September, 20% for October, 16% for November and 12% for December. "A soft year crashed in September," he says.

Numbers from the Radio Advertising Bureau show total revenue down 14% for Sept. 2001, 8% for October, 10% for November and 6% for December. Gary Fries, president/CEO of the RAB studied the New York and Los Angeles markets, finding revenue fell in New York by 28.7% on Sept. 23 and 18.5% in LA. "There was a major impact in September," he says, which was followed by continued declines that weren't as severe.

The Newspaper Association of America reports that newspaper revenue was $1.6 billion for Q3 2001, a 10.3% drop from the previous year. Revenue for Q4 2001 was $1.7 billion, an 11.9% drop. Sept. 11 had "a dramatic effect on the overall economy and we were reflective of that," says John Kimball, the NAA's senior vice president and chief marketing officer.

Magazine spending was $1.2 billion for Sept. 2001, dropping 1.2% from the previous year. Revenue dropped 9.6% in October and 11.2% in November and December. The lag time for magazine is the reason the dip didn't start as fast, according to Ellen Oppenheim, executive vice president and chief marketing officer of Magazine Publishers of America.

The initial losses following Sept. 11 were compounded by another problem -- is it okay to start advertising again? "The risks were too great, no one wanted to be commercial at a time when commerciality was improper," says Erwin Ephron, a consultant. In addition, the advertising that ran changed. "Humor was dead, people were trying to appear sensitive and not offend," he says.

Oppenheim says magazine advertisers "were worried about their messaging strategies coming out of 9/11," with advertisers changing or possibly dropping ads that didn't reflect the times, and with a longer lead time for magazine the impact lingered into 2002. Kimball says newspapers suffered from a drop in retail advertising because retailers "didn't know how quickly they could get back into business." They cancelled store sales, which they would have advertised in newspapers, and that hurt revenue.

Certain advertising categories were hit hardest, including travel and financial services. Consumer magazines were heavily impacted by the drop in travel advertising and business magazines were hurt by the drop in financial services. "Business magazines relied on tech and finance and were hit harder than home magazines," Oppenheim says. For instance, Business Week's ad revenue dropped 45% in October, 2001, while Cosmopolitan's revenue was flat.

Newspapers were hit hard by the drop in travel advertising, with the loss of airline revenue impacting national numbers, Kimball says.

The biggest hit for newspapers from Sept. 11 has been the drop in help wanted classifieds. The category had been falling before Sept. 11, "but the 11th made it worse," Kimball says, and it remains low a full year after the event since the job market hasn't rebounded.

The impact of 9/11 caused forecasters to lower their projections. On Sept. 6, 2001, five days before the attacks, the TVB forecast 2002 revenue would be up 5 to 7%. In November, it revised the forecast downward to 2-1/2 to 4-1/2% growth. In December, 2001 Zenith Media predicted total major media revenue would drop 1.5% for 2002. Before 9/11, Jack Myers, publisher of the Jack Myers Report, forecast total media revenue would be down 4% to up 1% for 2002. He lowered it to minus two to minus 6% after 9/11. Universal McCann's Robert Coen, the preeminent forecaster, says his forecasts were impacted by 9/11, too, though he wouldn't say how severely.

Many forecasters are now raising their projections, with all media rebounding this year. Television's rip roaring upfront led the way, with other media reporting gains, including magazine which has announced revenue up 6.1% and 8.6% for June and July, 2002. Radio revenue increased 3% for Q2 2002. Newspaper has continued to report losses, though not as severe, with Q2 2002 revenue down 1.8%.

Things may be returning to normal but the impact of 9/11, which devastated the media world, continues to traumatize it. "There's a threat of terrorism and more uncertainty," Oppenheim says. "There's still an unknown factor going forward."