TheBuzz
TheBuzz
The Sept. 11 terrorist attack exacerbated revenue losses at adverti- sing-driven media companies already wounded by months of shortfalls. Media ad dollars
diving on OahuHonolulu's major network-affiliated television stations and some radio stations pre-empted normal programming to provide continuous, commercial-free news coverage.
KITV-4 President and General Manager Mike Rosenberg said between four days without commercials and some clients' decisions not to run their advertising this week, Honolulu television stations may be out some $1.2 million. KITV, Honolulu's ABC affiliate, is owned by New York-based Hearst-Argyle Television Inc.
For KITV, KHON, KHNL and KFVE, the commercial-free days alone may have cost some $700,000, he estimated.
KHON Vice President and General Manager Bill Spellman concurs with Rosenberg's projections, "I don't think that's pie in the sky," he said, "It's a significant loss on behalf of every station, because I think every station committed to wall-to-wall coverage for the first days."
Spellman said the future losses could go higher, to "a million and a half," but said "I do think some (lost ad dollars) will come back."
KHON and KGMB TV are both owned by Indiana-based Emmis Communications Corp., pending a Federal Communications Commissions ruling on the joint ownership.
KGMB General Manager Lynne Mueller also believes all is not lost. "Some will be made good over the course of a month," she said.
So-called "make-goods" won't be possible for every client, however. Some ads were tied to scheduled programming that did not, and will not, air.
"I think advertisers are being cautious right now," Mueller said.
A minor sigh of relief comes in that "to some extent we are protected by the fact that we don't get a lot of visitor-related dollars -- even though everything is connected."
Vice President and General Manager John Fink of KHNL and KFVE estimate losses at $1 million and warns, "the rest is yet to be seen -- we'll see what happens in the fourth quarter," when clients normally increase advertising schedules.
"The big question now is, how do clients come back on, when is it appropriate, and nobody knows. That's the human concern we're all dealing with," said Fink, who runs the stations for Alabama-based Raycom Media Inc.
A senior advertising agency executive believes clear answers may prove elusive.
"I don't think anybody has the answers. I don't think the politicians have answers, I don't think hoteliers have answers, I think that's why the governor and community leaders are meeting right now," said Chuck Cohen, senior vice president and executive media director of Starr Seigle Communi- cations Inc., referring to Gov. Cayetano's emergency summit yesterday with county and industry leaders.
"I think we are all attempting to evaluate the situation on a day-to-day basis and develop a long-term strategy."
Cohen said the local retail industry will reflect what happens with the visitor industry, "If the tourists don't come and don't spend money, and people are unemployed, nobody's going to buy cars."
The radio industry nationwide is bracing for already tough times to get worse. Radio industry trade publication Inside Radio, in its online edition yesterday blared the headline, "Radio -- no advertisers, diving stock prices, recession ahead."
In its monthly report on industry revenue dated Sept. 6, the Radio Advertising Bureau said, "If July's revenue numbers are any indication, the Radio industry's economic prospects appear to be brightening." Local sales (not Hawaii specific) were down 1 percent and national dollars were off 14 percent, which marked an improvement over the past several months."
The hemorrhaging also extends to the print industry. The Wall Street Journal this week reported that several publicly traded newspaper groups expected the national tragedy to have a negative impact on third-quarter financial results.
The Newspaper Association of America's early September marketing and advertising page sought to stem the already-receding tide with an article headlined, "Why advertising during a recession is good business."
Cohen of Starr Seigle said, "People don't like to spend money when they read about companies closing or downsizing. It's a difficult situation."
To those ad-driven media outlets with whom the agency places advertising, Cohen said, "We're going to get through it together."
Erika Engle is a reporter with the Star-Bulletin.
Call 529-4302, fax 529-4750 or write to Erika Engle,
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu, HI 96813. She can also be reached
at: eengle@starbulletin.com
