Media count blackout costs

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Networks, cable, local and syndicated TV outlets lost $100.5 million, according to Advertising Age estimates. And that was in the 48 hours before the all-out assault on Iraq.

Much heavier losses are expected to hit TV networks and other media sellers, particularly magazines and newspapers, in the weeks ahead.

The initial losses were significantly less than earlier forecasts as many TV and radio stations continued to run ads and some regular programming schedules between March 19 and 21, when air strikes against Baghdad intensified.

"It's different from what we initially expected," said Jim Hoffman, senior VP-ad sales for NBC News and MSNBC, speaking as the all-out attack began. "It all changed a couple of hours ago. Certainly, when the war first started on Wednesday, we were all waiting for this `wow' thing to happen. But, obviously, it was delayed, and it was probably appropriate to run commercials at that time because it was pretty soft; we weren't seeing the pictures we are seeing right now.

"It could be that an hour from now the [Iraqi] Republican Guard surrenders," he added. "Does that mean there will be no more hard news, and give us a rationale to go back to ads? We don't know. "

But no matter when ads fully resume, the networks are bracing for a big hit. "This time it is a real economic cost to them," said Mel Berning, exec VP-national broadcast for Publicis Groupe's MediaVest Worldwide, New York.

Because there's an extremely tight marketplace, networks have sparse inventory to offer make-goods for advertisers' media buys that didn't run last week. In addition, since the conflict began at the end of the first quarter, broadcast networks need to move spots that were pre-empted into the second quarter, where the cost per thousand typically commands a price premium over the first quarter. That could even force broadcast networks to give cash back to advertisers.

strictly business

To protect their financial flanks, some networks are taking a hard line against advertisers seeking to also cancel commitments in entertainment programming. "We aren't arrogant people-we service our clients," said a veteran advertising executive. "But we are operating a business."

At least initially, however, it was expected that cancellations in entertainment programming would be rare. "I don't get the sense advertisers are looking to get off the air," said Rino Scanzoni, president-national broadcast, WPP Group's Mediaedge:cia, New York. "There is not a mass defection at this time. It's a very fluid situation."

Walt Disney Co.'s ABC and News Corp.'s Fox executives declined to comment, while an executive from General Electric Co.'s NBC didn't return phone calls. A spokesman for Viacom's CBS said, "We are working with advertisers on a case-by-case basis in an attempt to be sensitive to their needs."

Media agency executives expect networks to allow advertisers to escape from their prime-time commitments, particularly those with ads especially sensitive to the war, such as airlines, cruise lines and the armed services. "I would be stunned if a network didn't work with a category where their business would be affected by the war," said Mr. Berning.

"Even if there wasn't a war, if advertisers asked to pull their ads, we would make every attempt to try and get them out.," said Mr. Hoffman. "If we really can't, then people have to stick to their initial agreements."

While most major networks returned to entertainment programming March 20-CBS, for example, broadcast the NCAA game with advertising during prime time-the cable news networks ran wall-to-wall news coverage with no advertising. AOL Time Warner's CNN has been advertising-free since the start of the bombing last week. "Our advertisers are our partners and we are going to be flexible," said Greg D'Alba, exec VP-sales and marketing for CNN networks. "We are hoping most of them will come back."

Cable entertainment networks, for the most part, have been programming with their regular schedule, which could help them attract some new ad dollars, said Mr. D'Alba, should advertisers try to distance themselves from war coverage on the big broadcast networks. Cable may also benefit because, with broadcast-network inventory so tight, returning advertisers may have little choice but cable.

`a cord out of the wall'

Print, too, is steeling itself for sustained economic damage. Widespread pullouts at magazines were not yet reported, but a leading executive was blunt when asked whether booking had slowed last week: "Like someone pulled a cord out of the wall."

Ed McCarrick, publisher of Time Inc.'s weekly Time, said last week that "about six" of his magazine's committed advertisers, which total around 40, were pulling out of this week's issue. "It's not a massive, wholesale pullout by clients," he said.

A statement from a spokeswoman at Time Inc.'s People said "less than a dozen" advertisers had pulled out of this week's Academy Awards-themed issue. She would not divulge how many advertisers were staying in, but added that last year, its Oscar issue carried around 100 ad pages.

contributing: richard linnett and jon fine

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