Cable ad meet gets serious

Feb 17, 2003  •  Post A Comment

Impending war was on the agenda at the annual Cable Advertising Conference last week in New York, where uncertain times meant that a military analyst was required on one panel forecasting the future of the TV advertising marketplace.
The most likely scenario is for a short, successful war in Iraq, military analyst Laurence Korb, a former assistant secretary of defense in the Reagan Administration, told the assembled Madison Avenue and cable-industry troops. But, he added, the “nightmare scenario” is something akin to Armageddon in the Middle East.
Contrary to a gathering consensus that TV advertising revenues will take a substantial hit in anything but a short war, Sanford Bernstein & Co. analyst Tom Wolzien, another panelist, predicted that advertising in wartime will likely to continue to be “robust,” absent Armageddon or a home-front recession.
Mr. Wolzien based his opinion on historical data showing that, for example, “In 1943, just one year after the United States got into a [world] war, advertising jumped 15 percent-9 percent inflation, but 6 percent real growth.”
For conflicts in Vietnam and during the Gulf War the impact of war on advertising was “murkier,” Mr. Wolzien said, because those conflicts had “embedded recessions within them.” But in the second year after the recession hit bottom, whether there was a war or not, advertising expenditures “basically matched GDP growth,” Mr. Wolzien said, adding pointedly, “This is the second year after the bottom.”
What the data means for television advertising buyers and sellers, Mr. Wolzien suggested, is that “as long as there’s flexibility built in for the advertisers-that they can get out of something, they can change their copy, they can change the commercial, they can pull [it] off for a couple of days, then go back-probably it’s not all that bad [a situation].”
Mr. Wolzien even posited that a surprising category could benefit during wartime: “You may actually see domestic travel advertising,” he said, “assuming we don’t have a horrible recurrence of domestic terrorism. … If you think about Disney World and Disneyland, the fear from an investor standpoint has been, `What if the Europeans stop coming?’ Well, the Europeans already stopped coming. They can’t stop coming again. The reality is people are concerned about traveling overseas. They may well decide this is the year for domestic travel.”
Another battle was, somewhat surprisingly, on the conference’s agenda: the Federal Trade Commission’s crusade against deceptive weight loss advertising, including the infomercials that litter so much of late-night cable TV. FTC Chairman Timothy Muris called on the cable TV industry to monitor the deceptive ads that prey on Americans engaged in the life-and-death struggle with an expanding waistline and to reject the ads if they make patently false claims.
“Do the right thing” and stop running ads that contain obviously deceptive weight loss product claims, Mr. Muris said, showing a video excerpt from one ad in which a morbidly obese woman in a swimming suit ducks underwater and magically pops back up as a much thinner blonde. The “plague” of false ads is on the rise, he said, and is rampant in “all forms of media, with the notable exception of network TV.”
Cable television, Mr. Muris said, is an “egregious” offender.
“Profit and prosperity are not at odds with ethical advertising,” Mr. Muris said. But an informal survey of some of the cable ad sales executives present found them shrugging off the FTC’s plea, citing both free speech and financial concerns.
A recent FTC study of 300 weight loss ads found that “almost 40 percent made a claim that was obviously false; another 15 percent made at least one claim that was likely to be false or unsubstantiated.”
The advertising conference, held Feb. 11 in Manhattan, was sponsored by the Cabletelevision Advertising Bureau, which pegged attendance at the one-day event at a record 1,427.
The event was also something of a valediction for Joe Ostrow, CAB’s CEO and chairman, who is stepping down next month after nine years at the head of the trade organization.
By deadline, a CAB spokesman had not replied to requests for information about what action, if any, the organization would take on the deceptive-weight-loss-ads issue or what recommendations, if any, it would make to its members about it.