Following the UK prime minister's address outlining the beginning of the end of lockdown, Stephen Woodford, chief executive of the Advertising Association (AA) reveals some of the conversations that the organisation has been having with government about the next stage. But what does it mean for the ad industry?
While it is a relief to have at least started on the path back to a more ‘real’ life, the media this week is already showing the importance of clarity on when people who cannot work from home should actually return to work.
There was confusion about whether this was Monday (11 May) or Wednesday, as well as, for example, how many people we are allowed to see in the open air at one time.
We all understand the reason for these rules is to keep everyone safe, to protect the NHS and save lives and also to support businesses and the economy, but clarity is critical. This next stage will be much more complicated than the relatively simple ‘Stay at home’ first stage, so clear, unambiguous and detailed communications are vital.
On the point about business support, if briefings to the press are to be believed, we are soon to see more from the Government regarding an extension to, and then phased reduction, of the furloughing scheme – possibly to September. If this happens, it will be good news as we have been lobbying hard for this measure to avoid a cliff-edge situation for businesses and people in our industry.
We have also, with our partners across industry, been exploring a proposal for a tax credit scheme for advertising and marketing services, with the aim of stimulating investment and encouraging advertisers to continue, or return to, advertising. This plan would also encourage companies that do not currently advertise, including SMEs, to invest in advertising. Such an initiative will serve as a stimulus for the wider economy, support job creation and provide a welcome boost in investment for British commercial media.
All of this is vital to help revive confidence in advertising, which is well known to be the canary in the coalmine of a healthy economy. In 2019, consumer spending accounted for two thirds of UK GDP and so encouraging consumer confidence through advertising would be a boost to the national recovery. But our recent Expenditure Report projections on ad spend for this year showed we’re expecting a fall of 16.7% over 2020, with an expected decline of almost 40% in Q2 alone.
Since the Covid-19 crisis began, advertising’s think tank Credos has been tracking industry sentiment in a fortnightly sample. For our colleagues, the outlook remains largely pessimistic for this quarter and the next, but with signs of cautious optimism when looking at business prospects over next year.
But it is the uncertainty around how lockdown will be phased out that is a large driver of pessimism because it is making it hard for businesses to predict cashflows. Many organisations report they are currently living ‘hand to mouth’ with little ability to forecast for the future. This is not a sustainable way to operate a business and demonstrates the need for more certainty and clarity from Government – admittedly, no easy task for anyone.
Just as advertising is a litmus test for the wider economy, it is interesting to see how much advertising has been central to concerns around the lifting of the lockdown. This has been evident in the new campaign focus around ‘Staying Alert’, which launched over the weekend with the insistence by the First Minister Nicola Sturgeon that the campaign not be carried in Scotland.
With the four nations of the UK opting for subtly different ways and means of exiting lockdown, the messaging is complex with national and regional differences. It is important for advertising and businesses more generally that we get broad agreement on how we reopen the economy. While devolution and different areas of competence should, and must, be respected, business needs as uniform a way of operating as possible across the UK. A patchwork of conflicting policies helps no-one and hinders far more.
The nature of this crisis means we will all have to consider our own personal exit plans from lockdown both at work and at home. From the provision and suitability of workplaces to deliver work safely and effectively, to the choice of transport to and from work, to childcare and meeting family. For the work environment, wherever possible and practical, the message seems to be that our industry should continue to work from home where it can.
There are particular sectors in our industry though which cannot do this, for example advertising production and market research and these are being asked to work in a way that conforms to Government advice. On the production side, the APA has published their Covid-19 Shooting Guidelines this morning to provide guidance on how to manage a shoot to minimise risks and I recommend reading them. Elsewhere, we are working with stakeholders and officials to make sure information safer working is as clear and comprehensive as possible.
In addition to how we operate as an industry in our offices, studios, and on set, we will also have a responsibility to carefully reflect this new way of living in the work that we create.
Advertising will need to represent the ‘new normal’ for people and communities in the campaigns over the coming weeks and months. During this crisis, our work has already helped us all to make some sense of this new enforced way of living and reinforced the strong sense of community we all feel.
There have been examples of adverts using footage from families and people in lockdown settings and this has been coupled with advertising inventory being donated to good causes and to thanking the NHS and other key workers for their efforts. Brands have played their own part, for example, by turning their manufacturing processes to making medical equipment and PPE. We have – and I am sure will continue – to meet the many tasks we face using all our creative energy and ingenuity.
The work of UK advertising has helped to people up and down the country to understand where we stand, to realise that we are not alone and that – in the words of the Queen – memorably shown at the iconic advertising site in London’s Piccadilly Circus, ‘We will meet again’.
We are in for a very difficult few months for advertising as it is for the rest of our economy and country, but I believe that through our creative and entrepreneurial abilities, we will see this crisis through and look back with pride at how we rose to this challenge.
Stephen Woodford is chief executive of the AA