ANALYSIS: Media - Terror strikes dim recovery hopes. A bounce-back was tipped for the first quarter of 2002. A sharp recession is now feared. Alfred Hille reports

The beleaguered Asia-Pacific advertising industry is bracing itself for a longer spell out in the cold as the aftershocks of the horrific terrorist attacks on New York and Washington ripple through the region. While the US is still counting the loss of lives from the atrocity, businesses are calculating how to move forward to ensure that more people don't suffer. But key advertising categories are clearly reeling in the aftermath, some more than others, and the impact is particularly devastating on the aviation sector. Following on the heels of the hard-hit US aviation industry, other airlines have indefinitely stopped all marketing communications campaigns, while a number of major hotel chains have selectively reined in their exposure in the marketplace. The prognosis is grim for regional economies, which have been struggling to stay afloat in the past half year. It's now feared that any upturn will come later than the predicted second quarter of next year. While the move by airlines to suspend advertising is standard procedure following an air tragedy, media agencies say the reaction from hotels to the unprecedented attacks has been equally swift. Leading chains such as The Peninsula Group and Shangri-La Hotels and Resorts are among a number of major hotels groups which pulled their ads as a mark of respect to victims of the tragedy. The Peninsula's manager of communications May Wong said: "It wasn't a decision based on the effect on our business, but we don't think this was an appropriate time to be advertising." Shangri-La's image campaign was halted because the 'Paradise Found' strapline was deemed "insensitive", according to the hotel's group director of public relations, Julia Record. However, she adds: "We will continue with tactical advertising such as special promotions as these don't have the 'Paradise Found' strapline." But, while some have taken a pessimistic stance, others are nurturing the hope that the impact - provided the US avoids an all-out war - won't be as devastating as has been forecast. A ZenithMedia report published in July forecast Asia-Pacific adspend to grow by 1.5 per cent year-on-year this year. However, Zenith Asia-Pacific chief executive officer Antony Young said that while the outlook is looking somewhat bleak at the moment, it's not as bad as it seems. "The airline and hotel sectors aren't the biggest spenders. The big spenders are the telecommunication, financial retail and packaged goods sectors. The impact will still be there, but I think growth will still be near where we have been projecting, barring any more major shocks to the system," Young said. DY&R Asia chairman and CEO Peter Steigrad agreed, saying the recent tragedies in America only served to amplify the economic negativities. "Nothing really has changed. The fundamentals are the same and I believe that we'll come out of this economic downturn whenever we were originally supposed to come out of it." But the big question on everyone's minds, especially for the airlines, is when to start advertising again. With the more pressing issue of survival, slumping stock prices and a ratings downgrade occupying them, it may take the once big-spending US carriers some time before they return to the advertising scene. For the others, the answer will depend on how political and military developments unfold over the next few weeks. Few expect airlines to resume advertising before November at the earliest. If this happens, it will put a further dent on adspend figures this year because autumn is traditionally the peak spending period for the travel industry. The Economist advertisement manager, Rupert Harrow, said: "Should there be an air crash, airlines normally stop advertising for at least a week. But this is an unprecedented situation which will require weekly, if not, daily attention." M&C Saatchi Hong Kong chief executive, Ian Thubron, said British Airways had suspended its campaigns. Its other major airline client Qantas has followed suit, although it is still running a limited outdoor promotion for its Hong Kong to Sydney route. "We had been approaching this year with cautious optimism. We're now approaching it with caution and we're keeping a close watch on the industry and developments around the world," Thubron said. CIA Hong Kong managing director, Charles Brian-Boys, added: "In general, it's not advisable to be advertising at the moment because people's attentions are elsewhere." However, the slowdown in adspend in the airline and hotel categories are likely to hit regional publications and broadcasters the hardest. A source at one magazine said the two sectors make up about 30 per cent of its total advertising revenue. The longer the current state of affairs lasts, the worse it's going to be, the source warned. According to Competitive Media Reporting, adspend for regional publications totalled US$159.6 million in the first six months of the year, down five per cent from the same period in 2000. When the last CMR report was released in July, the worst-case scenario was for an industry decline of up to eight per cent for the full year. It's now feared the drop could go into double digit figures. However, both publications and broadcasters are taking the hit in their stride; they have given advertisers the opportunity to opt out without penalty. Newsweek International Asia-Pacific advertising director, Theresa Yeung, said: "This is not the right time to promote products and services. Within a day of the attacks in America, we asked the airlines if they wanted to pull out of the upcoming issue and then we made the last-minute changes." Newsweek and Time also published advertising-free special reports on the tragedy, which were distributed with their regular issues. Said Time and Fortune president Andrew Butcher: "We chose not to sell advertising into that issue as we did not think it was appropriate. We resumed our normal publishing cycle this week and the issue did feature more on the effects and consequences of terrorism as well as all of the regular components of the magazine." News channels like CNBC, BBC and CNN also dropped advertisements when they moved into a rolling broadcast format to report on the attacks. The networks resumed carrying advertising six days after the devastation. CNBC Asia general manager of marketing and communications, Miguel Bernas, said: "Dropping the ads was done in the interest of viewers and advertisers. No one would have benefited from airing or seeing ads during a time like that." Nic van Zwanenberg, BBC World Asia head of network development, concurred, saying that because of the devastation "we had to be careful and sensitive". However, Hong Kong's Cable TV decided to throw sensitivity out the window after it ran a subscription ad with a visual of the twin towers of the World Trade Centre on fire. Creatives generally described the ad as being in bad taste. Ron Cheung, head of creative at Hotdog Workshop, said: "The picture behind the ad is full of sadness and tragedy. As a consumer, I feel bad for Cable TV." The current pessimistic climate, meanwhile, has resulted in the postponement of some media projects. South China Media, which was due to launch Jessica Girl a title aimed at female teens and twentysomething readers in Hong Kong, will delay the project by about six months amid fears of a lack of advertising support. In another development, Getty Images says that its stock of more than 1,000 photographs of New York city's skyline will have to be replaced. Hong Kong business development manager Rosa Cheung said: "The old pictures will go into an archive. And we'll be commissioning new pictures soon." ASIA-PACIFIC ADSPEND (USdollars million) Year Newspaper & TV Radio Other Total Magazine (incl cinema and outdoor) 2000 24,829.3 27,547.7 2,742.0 7,679.2 62,801.2 2001* 24,966.3 28,305.6 2,816.0 7,640.2 63,724.1 2002no. 3126,553.3 29,641.6 2,934.0 8,475.2 67,601.2 2003no. 27,706.9 30,816.5 3,017.1 8,990.4 70,529.8 *Estimated no. Forecast. Source: Zenith Media.

Sign In

Trouble signing in?

Reset Password: Click here

Contact Customer Support at

Customerservice@campaignasia.com