CLOSE-UP: LIVE ISSUE/IRAQ CONFLICT - Advertisers cautious as media gears up for war

Build-up to war is making advertisers feel even more nervous, John Tylee writes.

As the US war machine prepares to roll into Iraq, advertisers everywhere are hunkering down in their foxholes hoping the conflict will be swift and the crossfire minimal.

Stay out of trouble and don't upset anybody is the order of the day. War with Saddam Hussein is polarising opinion and clients are wary about running any ads that might be interpreted as taking sides or that show images with even the most tenuous military associations.

One London agency recently had an idea for an ad turned down because it featured night vision goggles. The client was fearful it would be linked to the infra-red camera images of Iraqi targets being destroyed during the last Gulf War.

Agencies are sensing a growing reluctance by UK clients to feature strong American imagery in their ads in case it should be interpreted as showing support for US military action in the Middle East. "Everybody is very sensitive and some ads that would have been OK only a year ago are not acceptable now," Leon Jaume, the executive creative director at WCRS, comments.

"Creative ideas are being rejected even if they need a huge leap of imagination to associate them with military action or with being pro-American," another senior agency manager says.

"The US is seen to be sabre-rattling and the rest of the world is uncomfortable with it," another adds. "We are having to be very careful about using language or imagery which might be seen as supporting a war."

And it isn't just clients who are sensitive of the prevailing climate.

One major agency network is having to rethink the name given to a media planning tool it is about to introduce following serious misgivings by some local managers. Its title: Battle Plan.

Behind the culture of caution, however, lurks a suspicion that clients are using the threat of war as an excuse to procrastinate and suppress spend. One major UK agency is bracing itself for a £2 million drop in income this year because of reduced client budgets. And it isn't alone. "The war is a good hook on which to hang your vacillation and indecision," a network chief complains.

Martin Jones, the owner of the AAR, acknowledges that the prospect of Middle Eastern turmoil has put the brakes on a returning feel-good factor and a healthier new-business market for agencies. "Give clients a reason not to make a decision and the chances are they'll take it," he says.

Certainly, the majority of advertisers remain more concerned about the long-term effects of a global economy still stuck in a slough of despond than the short-term turmoil of a Gulf conflict.

"A war would make an extra contribution to a general lack of confidence," Julian Ingram, the European business development director at BBDO, explains. "Corporations have no confidence to invest and consumers lack the confidence to buy."

Maurice Levy, the chairman of Publicis Groupe, says: "None of our clients is reacting as if they believe a war will have a serious impact on them and none is cutting back budgets or postponing launches because of it. But there is a general concern about the state of the global economy and what a war might do to oil prices."

John Banks, the chairman of Banks Hoggins O'Shea/FCB, also believes that the economic effects of a war are overshadowed by other factors - a probable slump in the property market, the impact of tax increases announced by Gordon Brown last year and the possibility of a UK economy slowed still further by fresh tax rises in the autumn. "That's what clients are really worried about," he says.

Mike Walsh, the chairman of Ogilvy & Mather for Europe, the Middle East and Africa, says: "The prospect of a war is just adding to the general uncertainty in clients' minds. They are much more concerned about President Bush's tax reforms releasing money into the US economy to stimulate recovery."

Carolyn Carter, his counterpart at Grey Worldwide, suggests the inclusion of more war-cancellation clauses in media contracts - rather than substantial downsizing of budgets - is likely to be the only real manifestation of client concerns about a Middle East crisis.

If there's to be a conflict, then have it now and get it over with is what most clients hope. There's even optimism that a quick and decisive outcome could stimulate the global economy in a repeat of what happened after the Gulf War.

The long-haul airlines, in particular, are watching the developments closely. But there is no talk of a sudden halt to marketing activity.

"Nobody is thinking of a massive wind-down," a British Airways source says. "We just have to be fleet of foot and careful about the launch of major new initiatives."

One unwelcome by-product of a war is that it provokes long-term instability in the Middle East, a region upon which global advertisers and communications groups have been focusing because of high oil prices that have been pumping money into the local economies. Even more worrying is the possibility of terror groups taking their revenge on the West for a subjugated Iraq.

Bob Wootton, ISBA's director of media affairs, believes a major reason why consumer spending has held up is because people still feel distanced from the Middle East crisis. But he warns that could change if hostilities get up close and personal.

"For the first time in a long time, clients are beginning to see where they're going," he says. "But a major terrorist outrage in the UK would change everything. All bets would be off."

Meanwhile, a self-imposed censorship is preventing blatantly insensitive creative ideas from getting through. John O'Keeffe, Bartle Bogle Hegarty's executive creative director, has just been persuading his young teams that featuring Saddam Hussein in a National Union of Students campaign opposing university top-up fees isn't a frightfully good idea. Another creative chief recently binned a creative execution for an asthma treatment which featured the line: "Stops attacks on the tube".

Simon Dicketts, the M&C Saatchi executive creative director, says: "Bad taste just isn't fashionable at the moment."

And maybe not for a considerable time to come. Grey's Carter believes a war with Iraq will simply extend the shift in public sensitivity that began with the attacks on the Twin Towers and Washington. Movies such as My Big Fat Greek Wedding are symptomatic of people's renewed interest in family and home, while the enduring fascination with James Bond confirms the lingering need for escapism, she claims.

"These sensitivities have been with us for some time now," she adds. "And they're trickling down into advertising."

THE MEDIA OWNERS: how they are preparing and what they expect

TIM WARD, UK marketing director, Financial Times

"We have a marketing campaign planned throughout the year, which incorporates above- and below-the-line advertising. If war occurs, our tactical messaging will be amended to include the benefits of our war coverage and its related business coverage. The fact that we have the power of both print and online media - with the FT newspaper and - means that we can provide breaking news as well as in-depth commentary and analysis, ensuring our readers and users are kept updated. This is an important message to convey through any campaign.

"If there were to be a war, in terms of circulation and readership, we would expect the figures to increase. During the Gulf War in 1991, our figures increased by around 5 per cent. Based on our experience of 11 September , we would anticipate a significant increase in unique users and page views for

"Our global perspective and the impartiality of our coverage suggest more people would turn to the FT brand for information - whether in print or online - in times of conflict.

"If there is a war, our global network of reporters ensures we'll have a real insight into events in Iraq, as well as an understanding of their implications. Our editorial is impartial and authoritative, which sets us apart from much of the UK's national press.

KEVIN RAZVI, Executive vice-president, TBS international news networks "A common misconception might be that war is good news for us war-mongering news channel executives. That is far from the truth. Sure, it seems that viewers from all over the world tune into CNN during a crisis and there is no question that we are seen by many as the channel to watch as important events unfold.

"But the costs involved and the dangers to our reporting staff cannot be underestimated. There are the costs of safety training our journalists; the cost of investment in safety equipment and the cost of transporting newsgathering equipment as Iraq, for example, has no technical infrastructure.

"And of course, in many cases if we are covering a conflict, advertisers are keen to pull their advertising. For more than a week after 11 September we ran no advertising at all, so far from being financially advantaged by events, our bottom line was severely hit."

MICK DESMOND, Chief executive, Granada and joint managing director, ITV

"War has a number of implications on schedule, impacts and revenue so we need to be prepared. In terms of scheduling, we've organised contingency plans with the two sales houses to minimise disruption to advertisers and to minimise the commercial impacts we lose. It will affect commercial minutage.

"Viewers will flood to BBC1 and ITV1 as the most trusted channels, so we will raise our game accordingly. We must reinforce why people came to us in the first place. The experience of 11 September showed that people want to consume, mourn and self-educate. The schedulers' challenge is to put the appropriate pieces in at the appropriate time."