Adspend is set to rebound in the second half of the year and in 2021, but, says Keith Weed, the industry must continue to work hard to drive economic growth.
At the start of this year no one could have predicted the huge impact that Coronavirus would have on the economy and, consequently, the challenges that we would end up facing in the advertising industry. But just as we have learnt to adjust to the ‘new normal’ since March in our own lives, so too is our industry having to adapt to a changing world.
The latest AA/WARC Expenditure Report, published last week, tells this story vividly. Despite 2.9% growth in Q1, UK adspend is predicted to fall 15.6% year-on-year in 2020 before rebounding by 16.6% in 2021. The Advertising Association and WARC produce these figures each quarter and, since 1982, they have been the Gold Standard for tracking growth, or decline, in our industry. I have always respected the accuracy and authority their data offers. The latest report, therefore, demonstrates starkly the deep impact that Coronavirus is having on our industry and the challenges that lie ahead for us all. This impact is further compounded by the fact that total 2021 adspend is still expected to be lower than the 2019 figure. This will be no simple and quick recovery.
Faced with this unprecedented situation, it is vital that our industry continues to do all it can to support economic resurgence, including working with Government on key issues such as the tax incentive scheme and ensuring that we have a regulatory environment that is open and fair, giving businesses the confidence to invest.
The support that business has received from Government over the course of the pandemic has been hugely appreciated. But just as businesses begin to reopen, and as shoppers return tentatively to the high street, it is disappointing to see measures proposed such as those recently announced concerning HFSS advertising. Anything that stymies growth should be avoided, especially measures like these which have been shown by the Government’s own data to be ineffective in achieving their end goal of reducing obesity.
However, despite the awful nature of the pandemic, we have never seen a greater push from across adland in rallying together to spread positive messages and information across the country. The latest such campaign is ‘Enjoy Summer Safely’ from Government, which again highlights that when you need to share a message, you turn to advertising. But, in order to recover we must sustain this momentum and continue boosting confidence in the economy and among consumers. I would encourage more brands to join in and promote key new behaviours like handwashing and social distancing to mainstream and embed the practices we all must do to keep safe. People need to know what to do and to feel safe if they are to reengage post-lockdown. It is in everyone’s interests. The public goodwill that we have gained in recent months should not be wasted but should rather be embraced. This is linked to my determination to see public trust in advertising return, and the decline in levels of trust that we have seen over recent decades reversed.
Amid a global pandemic it is both easy and understandable to concentrate on the here and now and the present economic situation. The AA/WARC figures show that there is light at the end of the tunnel, but we should not forget the other issues of the moment, for example the social recovery and what this means around issues such as climate change and building a truly inclusive workforce. Creating a sustainable, diverse and inclusive industry will make us fit for the future and, to use a popular slogan of the moment, enable us to Build Back Better. Have a look at the UK launch of the #Unstereotype Alliance from UN Women that 28 top brands have just launched. I would encourage you to join the coalition and help build momentum – the more companies that take part, the better. All these issues will be central to our work at the Advertising Association over the coming months.
I have been incredibly proud of our industry during these tough times, but the AA/WARC figures demonstrate that there may still be some pain to come. Having come through the economic and social turmoil of recent months, it’s now up to us all to win the recovery and for advertising to join that fight to the fullest.