Consumers aren’t immune to the war on terrorism

Marketing doesn’t stop for war, but its practitioners need to be aware that consumer behaviour changes in response to major world events. By John Owen.

Admittedly, it’s not a cheery subject but, with conflict in the Gulf looming ever larger, it’s a subject that marketers and the business community need to address: what happens if there’s a war?

History tells us that travel bookings fall; general consumer confidence dips; the nation turns to the BBC; and people buy more newspapers.

But what else can we predict? Well, brands – especially those in the travel and luxury sectors – exercise extreme care over the way they communicate in wartime, even to the extent of pulling advertising. This, together with the aforementioned dip in consumer confidence, can cause a shortfall in advertising revenues: in the first quarter of 1991, during the last Gulf War, revenues were down 16 per cent year on year. Revenues were also affected in 2001 by the terrorist attacks on the US and the ensuing Afghan campaign.

So war is not good for business. But it seldom lasts long. History also tells us that things soon return to normal.

Except that, this time, things are different. It isn’t just war with Iraq that we need to think about. It’s the “War on Terror”. And that isn’t going away.

The war on terror began, of course, on September 11, 2001. Its impact was far greater than that of the Gulf War in 1991, for the simple reason that it was an attack on US soil. Even for Europeans, this brought home the danger we now face.

So, after the attacks, travel bookings didn’t recover quickly. And even when the recovery happened, there were marked differences in holiday behaviour – people travelled shorter distances for shorter periods. Britons booked fewer holidays, but eight per cent more short breaks last year, while the fastest-growing destinations for Japanese tourists were the closest: Australia, China and Indonesia.

Over a year later, business is still down. UK holiday sales in the second weekend of January – traditionally the busiest of the year – were down ten per cent year on year.

Altered travelling behaviour is unlikely to be the only consequence of the new reality imposed on us by the war on terror. What might the other changes be? Perhaps consumer borrowing, which has reached new heights since the attacks on the US, is being driven by a “live for today” attitude inspired by the tragedy. Perhaps the growing importance of family (noted by Starcom Motive in fieldwork for its forthcoming Family Food Report) is another side-effect, as people seek comfort and security closer to home. What’s certain is that lasting change is inevitable, as we are forced to redefine our outlook on life to fit the new reality.

For businesses, this makes setting benchmarks hard. Strategies and targets will have to be reworked. And more work must be done to understand how consumers are adapting. It doesn’t necessarily mean everything will be worse. But, as Philip Stephens, in the FT, put it: “The world is not as we thought it was. If we want to be optimists again, we must first adjust our expectations.”

John Owen is a director of Starcom Intelligence Unit