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Boris Johnson’s latest clampdown leaves the ad industry reeling – what now?

The Drum 24 Sep 2020 07:00
Picture by Andrew Parsons / No 10 Downing Street

UK prime minster Boris Johnson said the country had reached “a perilous turning point” as he set out a raft of tighter Covid-19 restrictions for individuals and business earlier this week. But what does the ad industry – which has been dealt an economic blow since the pandemic reared its head – want from the government?

In July and August – in between asking people to get down their local, have a pint and “eat out to help out” – UK prime minster Boris Johnson pleaded with office workers to return to their desks if they could.

“I want to see more people feeling confident to use the shops, use the restaurants, and get back into work – but only if we all follow the guidance,” he said. Ad agencies, and their clients, were quick to set up flexible working solutions in the huge offices that had been laying empty for months. For some, business lunch meetings resumed at Scott’s and Soho House. The Drum understands a few pitches even saw the reintroduction of chemistry meetings (albeit at a socially acceptable distance).

Amid all this, Britain’s economy is re-entering choppy waters, with the latest indicators suggesting that a summer surge in activity was ending even before Johnson tightened restrictions on socialising and returning to the office.

For the ad industry, the reverberations of Johnson’s clampdowns are wide-ranging – from limiting returns to the office to another potential dip in ad spend and the resulting job losses.

Chris Combemale, chief exec of the Data and Marketing Association (DMA), is calling on the government to further support and work with businesses to find solutions to protect people’s health and livelihoods.

The Creative Industries Federation projects that by the end of 2020, job losses in advertising and market research will amount to 49,000 (or 26% of the total workforce).

“Trading remains extremely difficult for many businesses across the data and marketing industry,” he explains. “Despite some revenues gradually returning, we are still nowhere near pre-pandemic levels and many businesses will have difficult decisions to make over the coming months if they are to survive.

According to the DMA’s latest figures, half of the data and marketing professionals surveyed say their organisation has used the UK government’s coronavirus job retention scheme (52%) to avoid redundancies. However, a third of businesses have already made or expect to make permanent staff redundant (33%) – a number that will likely increase with further strict measures on businesses ability to operate.

“Most urgently, this week’s news combined with our survey results makes it clear that an extension of the furlough scheme until at least the end of December is essential to ensure companies have the confidence to retain staff and freelancers,” he says.

He says this is particularly important, given the indication that such restrictions will be necessary over the next six months, coming as they do during the biggest quarter annually for ad spend in the run-up to Christmas.

More specifically, the AA has asked the government to look again at aspects such as business rates relief on office premises and out-of-home (OOH) poster sites, plus sectoral support for the most challenged areas of the advertising economy including entertainment, leisure, travel and hospitality, as well as the extension of help for SMEs and freelancers and other means to support employment as the furlough scheme comes to an end.

When it comes to pitching and chemistry meetings, an ad agency’s four walls can serve as a differentiator. For creatives, copywriters and planners, the office is a hub where campaigns come to life. For agency management, it can be a concrete monument to their business culture.

Many agency staffers have now acclimatised to a more digital way of working and while it’s understood that major agency network chief execs in the UK were – as recently as last week – keen to push for bums on office chairs, the government’s U-turn will force yet another operational rethink.

“Their creativity thrives on energy, interaction and magic, which is of course made easier by physically being in a room together. Which is why, the general sentiment from our agencies is that, in an ideal world, that is where they’d be. Physically together. Perhaps not all day, every day as was the norm pre-Covid, but at least some of the time,” he says.

He points to the “countless examples” of agencies continuing to produce strong work in lockdown and says that for now these efforts must be continued virtually.

In the meantime, the IPA is providing all of its agencies with legal and production advice, best practice guidance, insight and research, training and development in order to help support them and grow their clients’ businesses through these “toughest of times".

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prime minster Boris JohnsonUKScotts and Soho HouseChris CombemaleData and Marketing Association
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