First victim of fuel prices likely to be advertising

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At a time when a $3 gallon of gas has turned the automotive market upside down, it's hard for a company not to want to circle the wagons for safety and cut seemingly unnecessary expenditures. "The rising costs of oil have a huge ripple effect on our economy," wrote Shannon Burke, a media planner in Syracuse, NY. "It takes fuel to transport that fresh produce from a warehouse to your local grocer. It takes fuel to get that new winter clothing line on the racks at your local mall. It's been my experience that advertising budgets are usually the first to get cut in a time of financial crisis."

Ms. Burke shared a sentiment with more than half of Advertising Age's poll respondents. However, many who fell into the remaining 47% felt that this is exactly what companies should not do. McCann Erickson's senior VP-group account director in Los Angeles, Dennis McLaughlin said, "Those who retrench now will give the advantage to marketers who continue to support their brands when energy prices either return to acceptable levels or we learn how to live with and/or budget for higher fuel costs. The answer is to keep your brand message strong ... if consumers get used to cocooning, a lot of categories will suffer."

Jim VanHorn Jr. of Tinley Park, Ill., argued that the "crisis" is in the eye of the perceiver: "People who can afford to spend $30,000 to $50,000 on these SUVs just to cruise around town aren't the ones who worry about $3 a gallon. ... It is the 'have nots' who worry about the price of [everything], not just oil. But everyone likes to complain about oil prices, especially the media." Others, like John Monk, a Pepperidge Farm general manager in Norwalk, Conn., think the worst is yet to come. "I would guess that spending will continue through the fourth quarter to try to maximize the holiday season," he wrote. "I'm more worried about quarter one 2006."

Correction

At the time the poll should have closed last week, 81% of AdAge.com voters had stated that Advertising Week should be restaged for a third year. The figure quoted, 72%, was based on a later poll close due to production issues.

What you say:

53% of Ad Age.com voters think marketers will cut their fourth quarter advertising budgets in response to rising oil prices. Only a slim margin separates them from those who disagree. Among the dissenting voices, many say that the truly savvy marketer will do anything but cut the budget if it wants to keep its brand strong and on top of the market.

Next week's question is "Will the video iPod change TV advertising as we know it?" To submit your answer log on to AdAge.com, QwikFIND aao29v

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