NEW YORK — Ask magazine publishers just how bad the war in Iraq will be for business and a few might reply that a short war — really short — could actually be good, ending the economy’s funk.
But most are convinced the war won’t be that brief — and their businesses will suffer yet another blow in an already tough year. For proof, all they have to do is look back to the last Gulf War in 1991, when ad pages at fashion-centered consumer magazines like Elle, Glamour, Vogue, Harper’s Bazaar and Mademoiselle posted double-digit declines of up to 27 percent.
On the first full day of fighting in this Iraqi war — while the TV networks stayed commercial-free, forgoing tens of millions of advertising dollars — publishers nervously called on clients and waited to see if the war would last long enough for its advertising repercussions — expected to hit television, newspapers, and newsweeklies first, in that order — to eventually rock them.
“The publishers need to be positive and we all need to, because the economy sucks,” said Tyler Schaeffer, senior vice president of media brand planning at Foote Cone Belding Worldwide, the West Coast office of which handles the Levi’s account. “I think the shorter the war, the better the potential to come back. While war is bad, it does provide a resolution to the uncertainty that has surrounded us all for too long and fostered a more dire economy. It should only lead to opportunities leading into the second half of the year, and a better track either flat or upward.”
It’s a nice theory, anyway. But the dominant school of thought is that businesswise, war is yet another pothole in an already unfortunate year-and-a-half for the retail and luxury goods industries and thus the publishing and advertising worlds. It provides another excuse for advertisers to cancel or postpone campaigns deemed too sensitive for wartime, and another deterrent that could keep consumers from stores.
Lynette Harrison, publisher of In Style, was blunt. While In Style through April is up more than 20 percent in ad pages, she is not expecting that later on. “I think as we go into this war, it will be tough on all of us, and I think that will be true across the board. You’ll start to see it in the third quarter. It is just inevitable.”
This story first appeared in the March 21, 2003 issue of WWD. Subscribe Today.
In fact, many industry executives already were facing declines in ad pages in the third quarter because of weak consumer confidence and the sputtering economy. Rob Gregory, publisher of Rolling Stone, said, “The retail climate was already bad. I don’t see how going to war is going to make it better. Even the big American designers are feeling the pressure at retail. First there was a month of snowstorms, now there’s a war. It can’t be good.”
The potential third-quarter declines are coming against 2002 figures that were already weak. Apparel ad pages in the third quarter of 2002 totaled 3,743.2, down 7.8 percent from the 4,057.5 in the third quarter of 2001, according to Publishers Information Bureau. Beauty ad pages were up 3.8 percent to 3,963 from 3,814.5, according to PIB data.
Looking forward, most publishers declined to comment on the record about which companies were slashing budgets this year, but there is no question that the Gucci Group’s advertising spending will remain at post-9/11 levels until there is a clear sign the company is on an economic upswing. Fendi is also rumored to be cutting some advertising, as are American companies like Levis and Tommy Hilfiger, both of which have had financial challenges as of late.
“It is going to affect things later on,” said Steve Cohn, the editor in chief of Media Industry Newsletter. Additionally, he said, part of the reason why ad revenues looked good in the first quarter were because they are being compared to post-9/11 sales, which were terrible.
“The fashion category is doing well through May,” he said, “but it’s early in the game and the latest numbers reflect issues that closed in December and January.”
There are other bright spots. Harrison, for example, is expecting that beauty advertising (reflecting the famed lipstick index) will remain relatively consistent even though she said high-end European designers are cutting budgets and will remain soft.
The strength of beauty was seconded at Allure, where publisher Nancy Berger said, “after 9/11, our September issue that was on the stands actually had gains. When consumer confidence is down, beauty does better.”
For Rolling Stone, Gregory said that urban-wear lines like Phat Farm, Roc A Wear, and Sean John are all continuing to buy more aggressively.
But even cautiously optimistic predictions are being couched around statements like “it’s too early to tell,” and most seem to acknowledge that fall ads will not be easy to book early.
Ad buyers acknowledge that.
“Some people will start to hold on a little tighter to ad dollars and see what happens. That’s what happened post-9/11, and it’s what may happen now,” said Andrew Black of Laird and Partners, which reps Donna Karan and does campaigns for Gap. “If the war is a success there will be an extra flurry so that a dip in the middle is followed by a rebound at the end of the year.”
“At Marie Claire, we’re planning from issue to issue,” said publisher Katherine Rizzuto. “We don’t know what’s coming into every issue until close. We have 20 pages coming in at the very last minute every issue, and I think that will continue for a while until we know how this ends. In that sense, nothing changed last night. I would have told you that yesterday, I would have told you that two weeks ago and I would have told you every day after Sept. 10th .”
But the war already has had an impact, with advertisers postponing the shooting of ad campaigns until good news comes back from the front, or until they substitute more wholesome ads in their place. As reported, Hedi Slimane postponed the shoot for Dior Homme’s campaign, and there are reports that models have begun refusing to fly to already-scheduled shoots because of the war.
“I’ve heard that even up until yesterday, advertisers were changing their ads at the last minute,” said George Janson, senior partner, director of print at Mediaedge.
There is also trepidation on the part of many advertisers about appearing next to war coverage.
A Newsweek spokesman said some advertisers have called “about positioning and postponing ads temporarily, moving them to later weeks.”
“There are half a dozen clients we’ve heard from who do not want to be anywhere near war coverage,” said Ronald Galotti, the publisher of GQ. “They want to be moved and they want to be notified, and in two instances, we had cancellations because of that.”
“We’ve had a series of phone calls and e-mails outlining the placement policy for ads with respect to war edit,” said Gregory. “You have to be very careful about putting a fashion ad or a sexy lifestyle ad opposite a picture of destruction,” he said.