Global giants wary of economy

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Marketers around the world are trying to repair fallout from the still-faltering U.S. economy, which most agree is a bigger ongoing problem than last year's terrorist attacks.

In Asia, marketers are "definitely viewing the U.S. with different eyes," said Stephen Li, managing director, Lowe, Hong Kong, part of Interpublic Group of Cos., "but this is more as an effect of the continuing downturn in the economy, and the Enron and WorldCom fiascoes, than as a continued knock-on from 9/11."

"The U.S. is still the powerhouse of the world economy," said Miles Young, Hong Kong-based chairman of Ogilvy & Mather Worldwide for Asia, part of WPP Group. "Sept. 11 has made absolutely no change to this whatsoever. All Asian exporters to the U.S.-the Korean and Japanese electronic and automotive brands in particular-continue to be aggressive in their plans."

The markets least affected by the double whammy of the U.S. economy and 9/11-and the fastest-growing ad markets right now-are those that are largely self-contained, such as China. Still, concern continues to center around the U.S. economy in Asia, where some large markets besides China-such as South Korea and Indonesia-are posting double digit ad spending growth this year.

In fact, other worries come into play for Asian watchers of the U.S. economy. Toby Hayward, exec VP-advertising sales at News Corp.'s Star Group in Hong Kong, said, "The biggest blow to corporate USA over the past year was not the terrorism enacted by Al Qaeda on Sept. 11, but the lingering effects of the bursting of the dot-com bubble and the continuing revelations of malfeasance and greed emanating from some of the country's largest companies."

The falloff in travel since 9/11 has particularly hurt the U.K., which relies heavily on its $114 billion tourist industry. Britain, which draws most of its tourists from North America, was just recovering in early September 2001 from an earlier outbreak of foot-and-mouth disease that drove away foreign visitors. After the terrorist attacks, the number of U.S. visitors to Britain fell 30% in October and 23% in November.

Faced with a tourism crisis, the U.K. government and travel-related marketers anted up $60 million for Britain's biggest-ever international tourism campaign, starting in May 2002. The $37 million media effort was split equally between North America and Europe.

Ads by BMP DDB, London, part of Omnicom Group, feature ordinary people extending an invitation to visit Britain during the Golden Jubilee year that marks Queen Elizabeth II's 50 years on the throne. Ads focus on the U.K.'s diversity, heritage and humor, with the tagline "Only in Britain. Only in 2002."

Tourists are returning, but American travelers to the region aren't flocking back. During the first quarter of 2002, tourism was down 9% compared with the last normal year of 2000, but was down only 3% in the second quarter of this year. For the first half of 2002, U.S. traffic to Britain fell 11% compared with the same period in 2000.

Other international efforts were postponed, especially in the travel industry, but not forever. Cathay Pacific Airways, for example, was scheduled to roll out a global campaign in late September 2001 to promote the airline's new business-class cabin. Due to the attacks, the ads from McCann-Erickson Worldwide, part of Interpublic Group of Cos., were quickly shelved-until January 2002, when the campaign finally broke.

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