The twin crises could knock the wind out of what was seen as a gradual recovery for the industry from two years of a global economic slowdown, which began with the bursting of the dotcom bubble.
ZenithMedia and CMR had pointed to a nascent recovery after regional publications narrowed their year-on-year declines in advertising bookings to between seven and 12 per cent last year from a 20 per cent drop in 2001.
However, advertisers fearing the negative impact of their brands being placed next to grisly scenes of the carnage of war have pulled their ads.
Many advertisers had pre-arranged to have their ads cancelled in the event of war breaking out, and some publications estimated that the cancellations had lopped 10 per cent of their revenue at the end of last month. The flu outbreak is likely to exacerbate the situation, especially for the travel and hospitality sector, which is facing the double blow of war-linked terrorist attacks taking place and the potential of the disease spreading in confined areas such as an aircraft cabin. Industry sources pointed to pan-regional news television channels taking the hardest hit because the travel and tourism sector is one of their main revenue sources.
"They'll be the most concerned of all media channels, particularly against the huge additional costs of (war) coverage," said Universal McCann executive vice-president and regional director Allan Medforth.
Media owners are understandably playing down the impact of the two crises.
Ivy Choi, Time associate publisher, described cancellations at the magazine as "insignificant", and added: "Most of the current pull-out clients have rescheduled their ads to run after May. So this is more of a postponement." Newsweek Asia-Pacific advertising director, Theresa Yeung, said the market was waiting for the situation to stabilise.
With the war set to enter its third week, and the flu crisis expected to worsen, the worry is that a resolution on both fronts are still weeks away.
Star executive vice-president of advertising sales Toby Hayward added: "If it goes badly for a long time, that will affect everybody."
CMR - 2002 vs 2001 (USdollars, millions)
Publications 2002 2001 Per dif %
TIME Asia 59.3 52.6 12.8%
AWSJ 38.4 48.1 -20.1%
Newsweek Asia 36.7 36.9 -0.5%
Business Week 17.6 16.2 8.9%
Fortune 14.4 14.6 -1.5%
Source: CRM International