Agencies get back to business

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B-to-b advertising agencies, already struggling in a down economy, said they were getting back to business in the wake of the terrorist attacks, but the tragedy was bound to have a negative effect on the industry.

"It has made it tough to do business," said Pete Kovac, president-CEO of NKH&W Inc., Kansas City, Mo., whose clients include Baldor Electric Co., Micro Motion Inc. and Sprint. "Were in the attitude business, and attitudes have been tough."

However, Kovac said he was not aware of a single client that had canceled advertising as a result of the disaster, and the company was not making any revisions to revenue projections for the rest of the year. He said hes been impressed with the renewed spirit of American patriotism, and advertisers should promote that in their messaging.

"This is a time for all companies to stand proud," Kovac said. "Its a prudent thing for corporations to send the message, Lets keep getting bigger and stronger. "

He said his agency was now reviewing upcoming and new campaigns for clients and would most likely build some nationalist images into the campaigns.

Recovery may be delayed

Other b-to-b advertising executives echoed this message of standing united in business.

"Putting our nose into the work in front of us is the best defense against the negative ramifications this may have on our industry and our agency," said Rick Segal, chairman-CEO of HSR Business to Business Inc., Cincinnati, whose clients include Cincinnati Bell, General Electric Co., AK Steel Corp. and Xerox Corp. "We took the president seriously when he said get back to work," he said.

HSR B2B had to pull and revise some ad campaigns as a result of the attacks, including a print campaign for GE Aircraft Engines that featured the World Trade Center in the creative.

Segal said no clients have cut spending or ad programs as a result of the attacks. He said its too soon to determine the impact on revenues for 2002, but the ad recovery may not come as soon as the industry had hoped it would.

"Coming into [the week of the attacks], we saw 2002 being stronger," Segal said. "Now, we must certainly wait and see."

In the long run

Karen Breen Vogel, senior VP-strategy for online marketing agency B2B Works Inc., Chicago, was in New York with about six executives from the agency for the American Business Medias B2B 2001 E-media Conference & Expo during the attacks.

The conference was canceled and Breen Vogel and her colleagues returned to Chicago by car or train, where they immediately began reviewing campaigns with clients.

She said so far no clients have canceled advertising as a result of the attacks, and her agency is not revising revenue projections for the remainder of the year.

Breen Vogel said one effect of the tragedy is that certain industries, such as financial services, insurance and travel, may need to shift some ad dollars into PR campaigns to reassure customers, business partners and the public of their strength.

She also said that because the Internet was used in "many purposeful ways" during the disaster, such as helping people communicate quickly and send messages to friends and colleagues around the world, it may provide a long-term benefit in marketing communications.

While its too early to see the immediate impact of the disaster on online ad revenues, the Interactive Advertising Bureau reported last week that Internet ad revenue was $3.76 billion for the first half of the year, down 7.8% from the same period last year.

"In the long run, companies will see the Internet as a vital communications medium," said Breen Vogel.

But for Breen Vogel, like other ad executives, one message is clear: "The best thing we can do in America is return to business as usual."

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