Strata

STRATA Study: Advertising Impacted By Oil Spill; Attorney Ads Increase; Tourism Takes a Hit; Uncertainty Dominates

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The oil crisis in the Gulf has spilled over to the advertising industry.  From tourism to restaurants, political ads to attorneys – advertising has been impacted in the Gulf.  That according to a supplemental study done by STRATA, the leader in media buying and selling software.  STRATA, who conducts a quarterly survey of ad firms across the country, has done a supplemental study of areas in the Gulf to get a gauge of challenges firms are facing in that region.  Among the markets studied: New Orleans, Louisiana; Mobile, Alabama; Houston, Texas; Biloxi, Mississippi and Pensacola, Florida.

Surprisingly, most of the areas were fairly split on the BP oil spill’s impact on their economy.  One of the most publicized areas impacted, New Orleans, had many firms notice an increase in advertising business.  A few firms questioned feel that bump in advertising was due to political advertising and also ads for attorneys.  According to one firm, “I heard of lawyers popping champagne when the spill happened because they knew they were going to make a lot of money.”  The fishing industry is one that is greatly impacted and one firm commented, “It’s not a pretty picture for the state of Louisiana. (Overall), it makes us feel we are the center of something that may ripple. There is a lot of uncertainty.”

Tourism (and the advertising that goes with it) has taken a big hit in Florida.  Although oil hasn’t reached many of the areas yet, the perception of it has caused uncertainty and many issues for advertisers.  As one firm said, “Everything is affected by tourism at this time of year.”  Hotel and restaurant business is down for many parts and some have created campaigns out of state to help boost the area.

Response in Mobile has been a bit different, likely because it is one of BP’s command centers.  The firms questioned in Mobile and Biloxi generally are seeing an uptick in advertising with BP running a lot of ad campaigns in the area.  The influx of BP personnel in the area has helped some offset a drop in tourism due to the spill with a number of hotels and restaurants seeing an increase in business because of BP workers.

An interesting area surveyed was Houston, Texas.  Most rated business as good heading out of the second quarter.  The spill hasn’t directly impacted firms in this area yet, but some firms are worried how it will affect their large oil and gas market.  One firm talked about companies pulling back spending on drilling equipment and directly impacting the market there, thus creating uncertainty in ad spending.  An intriguing fact that one firm discussed was the fact that they always have some oil on their beaches due to general seeping in the Gulf area.  If you add that seeping to the spill area, they felt it could be trouble for the economy there.

This is not a simple issue and the effects will be wide ranging.  The paramount question is – what will the impact be when the focus of the news changes off this area and only the oil remains?