Some advertisers have been giving radio stations orders to pull their ads off the air once war with Iraq begins. But unless the war goes badly for the US, broadcasters are looking for a quick bounceback.
Those stop orders are largely coming from national advertisers, rather than local merchants. Katz Media Group CEO Stu Olds told RBR that 25% "at most" of his firm's national clients have orders out to pull their ads when war breaks out, with most saying they expect to stay off the air for 3-5 days. "Most importantly, though, I do not know of one so far who is not just pushing the schedules back - - they're not actually pulling money," Olds said. "That's real good news. What were afraid of was that people were going to pull schedules, cancel the dollars and then determine when they want to come back in." The Katz CEO said the orders to temporarily pull ads aren't coming from only particular advertiser categories, but seem to be a decision made company by company.
"We have been notified by advertisers such as Verizon Wireless, as an example, if war is to start, they want to discontinue advertising until they evaluate what the impact has been," said Warren Lada, Sr. VP/Operations at Saga Communications (A:SGA). "My hunch is, from all the conversations that I've had with our national reps - - and I think that's where you'll find it, more so than on a local basis - - is that although there might be some temporary hiatuses, I don't see them as being long term. I think it's more just a reflection of them trying to have the appropriate copy on the air to reflect the mood of the country." Lada said he expects some of the cancelled ad buys to be made up, but not all, so Saga and other broadcasters will lose some revenues.
With such a long build up to war, Lada said it seems the country has gotten accustomed to the idea of a war with Iraq being inevitable. "So my guess is that most people are going to want to go to as much of a business as normal basis as they can," he told RBR.
While some national and regional advertisers have given instructions to pull their ads off the air temporarily once war begins, Lada said that has not been the case with local advertisers, and there have been few cancellations even with war at hand. He also said theirs is no evidence of the advertiser hesitancy seen in March extending into next month - - although he noted that "things can change quickly," depending on what happens in the war.
"What reaction we're getting from advertisers is almost entirely from national and regional advertisers," Triad Broadcasting CEO David Benjamin told RBR. "If there's a blanket response, it's that we'd like to cease being on the air for 72 hours and then we'll check back with you. That has been from national and regional - - not all national and regional, but a number, and that seems to be the formula."
Under the circumstances, Benjamin says that will likely leave stations with some unfilled inventory that they may not be able to resell on such quick notice. But, with little or now advance warning when the bombs will start falling, Benjamin said it's not a good idea to try to get tough on enforcing cancellation notice requirements. "It's a time for unity and not a time to be in conflict with your customers," he said.
While March was soft for Triad, as it has been for most broadcasters, Benjamin said April and May have been running well ahead. "So, we'll see if that continues," he added.
From the advertiser and agency side, RBR sources agree that few, if any, advertisers are actually pulling ad dollars out of radio because of the war.
"I know of one client who has pulled out. Everybody else is running as normal," said Bruce Heim VP/Group Director Horizon. "The reason the one guy pulled is because [the war] would directly impact on our campaign in terms of how it runs, that's all. Now, the people I've talked to really, for their accounts, are not seeing that many pulling. Here's what everyone has to realize: People may be cutting out their advertising this moment, but they're really just moving it. It's the same monies. They're not losing any money here. So if you have two or three days of getting bumped, you just take this adverting and move it later. If you want a perverse way of looking at this, it artificially creates a tighter environment later on as you move into Q2 and Q3 - - which are more expensive."
At Carat, VP/Senior Spot Supervisor Fred Coady told RBR: "I think people are being a little cautious. This company, however, really isn't pulling out of anything right now. Our company is pretty stable and we had really no major pullouts of clients. I mean, should the war start, we do have some war contingency plans. For example, if a station changes format from music to news coverage, then we would be taken out for say 48-72 hours until they got back into their format. But if they don't change format and continue playing music, a lot of our clients are staying in."
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