The UK’s lockdown extension follows the International Monetary Fund’s (IMF) prediction earlier this week that the ‘Great Lockdown Recession' could be the steepest in almost a century. Camilla Kemp, chief exec of M&C Saatchi believes it is a time for a ‘Great Reappraisal', not a ‘Great Recession’.
Joined in discussion with Stephen Woodford, chief exec of the Advertising Association (AA) this morning (17 April), the pair discussed the expected economic outcomes of the UK lockdown continuing for “at least” another three weeks - and likely not ending before June.
On Tuesday (14 April) the IMF estimated that global gross domestic product will shrink 3% this year. Both Woodford and Kemp believe that advertising has an important role to play in reducing the damage. As Woodford put it: “Advertising is one of those big levers that can encourage growth.
“It can get people to resume behaviours, present things in new ways to people," he continued. "It can reflect new realities that will come out of this… because it won't be just back to business as usual. We're beginning to turn our thoughts to what our industry can do, how our industry can help that recovery. And by helping that recovery, help ourselves.”
If Woodford is right in his prediction that it is going to take six months until the economy gets back up and running properly, it is time for the industry to start planning and the thinking about how to help recovery.
Kemp stressed that it is important to understand that the industry is uniquely placed to help drive and stimulate demand.
“The observations that our strategy team is making at the moment is that there will be a movement of enormous reappraisal,” admitted Kemp. “Not the great recession, but the great reappraisal.”
By this, she says that for every product or service that people buy, there will be a moment where they rethink the value of those things.
“There will be an opportunity for brands to not just talk about the product, but spell out what it does for you,” she argued. “When you say to somebody, let's go and have a coffee, you're not saying that because you want to consume caffeine, you're doing it because you want to connect with somebody and you want to have that moment of downtime.”
As chief exec of AA, Woodford admitted that “the level of interaction with the government is absolutely intense” and that he is having daily conversations with the Department for Culture, Media and Sport (DCMS) and the Department for Business, Energy and Industrial Strategy (Beis), which started in the lead up to lockdown."
In the past week alone, he said he was part of a number of ministerial round table calls with other representatives from across the economy, where the focus is largely around the implementation of the job retention scheme and the furlough scheme.
“Hats off to the government for the scale and breadth of the funding of the schemes as some of these things are lifelines,” Woodford stated. “But the devil is in the detail. Making these things work is going to be important and the feedback, particularly on the loan scheme, is still very poor. This is the sort of thing we are feeding back to ministers.”
For Kemp, who heads up an agency that depends on these schemes to keep business alive, she said, “the furlough scheme was a really welcome announcement when it happened. But there's a big question about how long it's for, as the 31 May feels ambitious.”
The speed with which people can access that cash and the other is going to be critical. “We've done everything we can to prepare ourselves for there being a bit of a delay, and we're confident that we're in a good place to be able to mitigate that, but, I think the execution of these really significant and bold ideas will be the thing that helps businesses to survive or not frankly,” Kemp concluded.