Basic Nets' Ad Loss Adds Up to $32M10/07/2001 8:00 PM Eastern
Basic cable lost almost $32 million in advertising during the days immediately following the Sept. 11 terrorist attacks, according to a CMR survey.
The Taylor Sofres company estimated that cable television lost $31.6 million from Sept. 11 through Sept. 15, as a number of networks, particularly the all-news channels, cut commercials in favor of continuous coverage.
CMR (formerly Competitive Media Reporting) projected that broadcast television lost $188.4 million over that span, while spot or local television outlets in the nation's 75 largest markets sustained a $93.2 million drop.
All told, CMR calculated that TV lost $313.2 million in advertising revenues during the days in question.
The loss of revenues came as Madison Avenue was already reeling in the face of the softest advertising market in a decade, a climate impacted by the bursting of the dot-com bubble, the shrinking economy and a retrenchment in the upfront selling season. The market conditions have forced media conglomerates like AOL Time Warner Inc., News Corp. and Viacom Inc. to downgrade earlier revenue and cash-flow projections.
According to CMR, cable lost 16 percent of its weekly revenue base during the aforementioned period, while the broadcasters took the biggest hit — 49 percent of their weekly take. The spot market missed 30 percent of its weekly ad revenue.
CMR research indicated that cable networks lost almost $10.8 million on Sept. 11, $5.6 million the next day and $4.6 million on Sept. 13. The totals jumped to $5.7 million on Sept. 14 and $4.9 million on Sept. 15.
"We all commend the broadcast networks' decision to forego ad revenue in favor of keeping our nation informed around the clock about the tragic events of Sept. 11," said CMR president and CEO David Peeler in a statement. "Unfortunately, such across-the-board action has resulted in the acceleration of a gloomier outlook for advertising's largest medium. Spending on all television advertising was already showing declines of 2 to 4 percent for this year. Now, we're looking at revenues that could be down in the 6 to 8 percent range."
CMR's calculations are in line with projections made by Myers Reports Inc. CEO Jack Myers, who estimated that total ad spending should decline by 6.6 percent this year and by 7.4 percent next year.
But Myers released updated ad-spending projections on Oct. 3 that predicted a speedier ad-spending recovery starting in 2003 and extending through 2006.
Myers saw a slight uptick of just under 1 percent in 2003, followed by gains of 3 percent, 1.6 percent and 3 percent respectively in 2004, 2005 and 2006.
Myers said cable would be "the primary beneficiary of increased TV advertising" when the increase comes.