Media&Marketing: The old saying that the only people who gain from war are the arms dealers and the newsmen is only partially true, writes Emmet Oliver

While CNN and Sky News presenters may get excited in their desert fatigues and gas masks, their companies back in Atlanta and London will be more worried about the escalating cost of covering events in Iraq.

War presents a conundrum for media companies - ratings and circulation do go up, but the cost of covering wars is huge and advertising usually dries up during the period of hostilities.

In Ireland, however, few media companies need worry about this. With the exception of RTÉ and The Irish Times, no other Irish owned media outlet is putting reporters on the ground in Iraq. Most will be relying on wire or agency reports.

Some newspaper groups, like Independent News & Media, will piggyback on reports from British newspapers such as the Times of London, the Daily Telegraph and the London Independent, which is owned by Sir Anthony O'Reilly.

On the radio side most will also utilise the reports of others with ITN, BBC and Sky being used from time to time by stations here. In terms of TV, RTÉ is making a major commitment, but TV3 is not planning to put any staff into Iraq.

The costs involved are considerable and the consequences of spending the money can be long lasting.

In New York, some analysts have already cut the earnings predictions of big newspaper groups because of the drop in advertising revenue during war time.

In Ad Age this week, an influential analyst from investment bank Blaylock & Partners, Mr Ed Atorino, said because of the war: "There is a good chance that earnings will come in at the low end of estimates and some companies may miss hitting estimates as well."

Even the giant Newsweek magazine, owned by the Washington Post Company, has said increased sales at the newsstands will not offset the loss of advertising revenue and costs associated with putting reporters on the ground. However, media groups are hoping for a pay-off in terms of long-term circulation and ratings gains. Wars allow newspapers and television networks to show themselves at their best, with garish gadgets and elaborate maps.

If the coverage impresses, a particular newspaper or TV station may leapfrog its rival and gain more respect among the advertising community, as well as viewers and readers.

In Ireland, like elsewhere, the gadgets cost money and there is normally a slump in advertising, particularly in the press and, to a lesser extent, on TV.

Wars and cataclysmic events also force media organisations to drop advertising themselves. For example, ITV is clearing its schedules to make room for extra war coverage and this will have a knock-on effect on ad space.

Mr Richard Law of the MediaVest Ireland, a large ad agency, expects this war to be no different. "TV companies clear their schedules and ads are often turned away. That was certainly the case during 9/11 when RTÉ cut back its ad space considerably," he says.

Even the TV powerhouses like CNN adopt a similar stance. Its head of sales and marketing Mr Larry Goodman, said this week the station would drop advertising for three days on its main channel and for one day on its spin-off channel Headline News.

"If there is mass casualties, we would keep advertising out for who knows how long," said Mr Goodman. With stations and newspapers pulling ads themselves you can expect revenue to drop, but advertisers themselves are usually squeamish about taking space during war.

Mr David Verklin, chief executive of Carat North America, one of the biggest agencies in the US, said this week adverts in news magazines and newspapers would dry up over the next few weeks. "Its going to be hard for clients to feel comfortable in the back half of Time. I'm not sure we'd want to be in the middle of a news weekly with a picture of a dead American soldier on the cover".

Based on this kind of comment in the US, it would appear a third of US advertisers will pull their adverts during the Iraqi invasion, with TV adverts disappearing over an initial period, usually about six days. In Ireland things are not likely to be that drastic.

Mr Richard Law, who buys media space for giants like Proctor & Gamble, says because Ireland is distant from the war and has no direct involvement (if you don't count Shannon) adverts should still flow freely, although certain clients may defer major campaigns. He says press is likely to suffer most, with radio probably remaining mostly immune.