We Interrupt This Recovery…

Folio: The Magazine for Magazine Management, Oct 1, 2002

Byline: Jesse Oxfeld

It's been a brutal couple of years in the magazine business, as the economy has battered companies' finances and the battered companies have cut their ad budgets. A 2003 recovery - or at least a bit of one - seemed possible, but now there's a new worry. If America goes to war with Iraq, would that kill a nascent advertising uptick?

Maurice Levy, chairman of Publicis Groupe, thinks it would. London's Guardian newspaper reported in mid-September that Levy believes a war would cause a surge in the price of oil, which would disrupt the world economy, cut into corporate profits, sour consumer confidence, and drive down ad spending.

But here in the States, the damage may be more contained. Several U.S. media buyers contacted by FOLIO: think a war with Iraq would lead to decreased advertising in relatively few categories. A war "is not a good time to be in the travel sector," for example, says Alan Jurmain of Lowe Worldwide. But other categories might well increase. Caroline Riby, of Saatchi & Saatchi Rowland, notes that spending by insurance companies might grow. And wartime actually plays in the favor of the news mags, which benefit from in-creased newsstand sales.

Sheree Johnson, of NKH&W, Inc., says, "Comfort kinds of things, sales to government, b-to-b, and tech," might be categories that see a boost should war break out. "You'll see some categories pick up, some cut back."

"If it's a short-duration conflict, I don't think the effect would be large or long-lasting," says Tyler Schaeffer of Foote, Cone & Belding Worldwide. Besides, he says, since September 11 "we have more tolerance for this type of news." Which, in the end, is maybe some of the saddest news of all.