UK ad industry leaders have warned that the government’s decision to tighten social-distancing rules because of a second wave of coronavirus infections poses a threat to economic recovery, and urged Chancellor Rishi Sunak to consider extra measures to support adland.
The Advertising Association renewed its call for a tax credit for the industry in light of the latest restrictions, announced today by the prime minister Boris Johnson, which encourage people in England to work from home where possible and will impose early closing on pubs and bars.
Chief executive Stephen Woodford said the government should provide more support in the run-up to Christmas, which is the biggest quarter for adspend every year.
Woodford said: “Advertising is a driver of economic activity and growth, and with business and consumer confidence so fragile, we call on the government to match further restrictions on economic activity with measures to alleviate their impact, particularly to continue to support jobs and businesses that are hardest hit, like many of the media sectors dependent on advertising.”
He added: “Advertising can play a major role in both helping the national public health effort and the recovery and the AA has proposed an advertising tax credit for consideration in the Chancellor’s autumn statement as a means to stimulate the broad economy.
“More specifically, we ask government to look again at aspects such as business rates relief on office premises and out-of-home 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.”
Adspend since the coronavirus outbreak took hold in the UK has suffered. The latest figures from the Advertising Association/Warc Expenditure Report show that adspend dropped 39% over the second quarter of the year. As footfall dropped, cinema and outdoor advertising were the two of the hardest-hit sectors.
However, things had been improving, as a revised forecast in July predicted a faster recovery, with Q3 set to decline by 20.7% and Q4 by 6.7%.
Paul Bainsfair, director general of the IPA, backed the AA’s call saying that measures such as tax credits and relief from business rates would benefit adland as a whole.
He added that the body will continue to provide its agency members with advice and support through a difficult time.
Bainsfair said: “During lockdown we have seen countless examples of agencies continuing to produce wonderful demonstrations of creativity and effectiveness, despite the restrictions.
“And so, for now, with the government advising a working from home approach where possible, they will have to continue their efforts virtually, ensuring that the quality of the work continues to thrive and that the mental health of their employees doesn’t fall.
“It is a delicate balance to tread for all of us but we hope this reinstated measure will be an effective short-term move in order to allow longer-term gains in the future.”