Ad chiefs are calmer as second lockdown hits

Fears are mounting that the new national lockdown in England, and similar measures in the rest of the UK, to stem a second wave of Covid-19 cases, will hit the economic recovery.

However, advertising chiefs around the UK – many in cities that had already faced heightened restrictions under a system of regional “tiers” during October – expect activity to suffer less disruption than in the spring.

Euan Jarvie, Dentsu’s chief executive for the UK and Ireland, which has nine offices across the UK and more than one-third of its 3,175 staff based outside London, said: “I don’t think we’re going to see anywhere near that shuttering back [that there was from advertisers during the first Covid-19 wave], because I think people have adjusted. The shock value is what caused it.”

From his home in the Scottish borders, Jarvie has been navigating the challenge of dealing with three governments – in London, Edinburgh and Dublin – each with its own approach and requirements, plus some of the key metropolitan regions such as Greater Manchester, where its mayor, Andy Burnham, has clashed with Downing Street over emergency funding.

Jarvie admitted the new wave of cases is “another darker unknown” but is cautiously confident because of “the fact there are more platforms for brands and consumers to engage and to transact than ever before”.

Referring to comments from Scotland’s national clinical director, Jason Leitch, that people should prepare for a “digital Christmas”, Jarvie said this was not a portent of disaster for brands. “He’s right, it is going to be a digital Christmas – but that’s still a platform.”

Greater Manchester was one of the first areas of England to move into tier three, which had stricter rules against mixing between households, and banned pubs from serving alcohol without
a meal – although the government’s recommendations on avoiding office working were the same across the country.

Jessica Scott, co-founder of Love Sugar Science, a Manchester media agency founded in 2019 and backed by Goodstuff, described the city as “very quiet” but she does not expect a repeat of the damage to ad businesses seen in the spring. “I feel like the wheels are starting to turn again,” she said. “People are starting to get back on board with: ‘This is just what’s happening at the moment, so we’re not stopping advertising, and let’s do that new business pitch.’”

The timing of the pandemic was somewhat fortunate for Love Sugar Science as it had been about to sign a lease on a big new office space.

The central belt of Scotland has faced tougher rules since the start of October, with pubs and restaurants forced to close entirely.

Simon Crunden, managing director at Edinburgh-based Republic of Media, said: “At the moment everyone is a bit: ‘When is this going to end?’ It’s starting to set in that this could be a very long winter, and with not that much to look forward to.”

At the end of last year, the Scottish government consolidated its media with RoM – a turn of events Crunden admitted had been “very serendipitous” for the agency, as he estimated that the Holyrood executive had tripled its media spend to support a barrage of health campaigns.

This has put the agency in a position to bring in pay rises that had been scheduled for March, and refund temporary salary reductions.

“Because our business is in a good position everyone feels secure, and that’s really important at the moment,” Crunden said. “But it is frustrating because we’re an industry where we need to spark ideas off each other… I think most of that happens organically with conversations.”

Another problem, he added, is that the business recruited three graduates at the start of the year, and “we’re just not bringing [them] on in the same way as we normally would, because I would say two-thirds of what they learn is just by osmosis”.

Sam Rainey, chief commercial officer at Leeds-based creative agency Home, said it suffered a hit and furloughed some staff in the spring lockdown but September had been the strongest month in the agency’s 18-year history. He put this down to a broad client base and focus on offering business and brand strategy services.

However, he added that plenty of businesses in Leeds have been badly hit, even before the city went into tier 3 in October and then the new national restrictions kicked in.

“I know a few people whose agencies have closed – certainly some small or medium-sized agencies where they just haven’t been able to keep afloat,” he said. “The businesses that adapt to change quickly, are the ones that survive.”

Indeed, Jarvie points to the way that several of Dentsu’s clients have shown resilience and adapted to the crisis, citing Next’s greater emphasis on ecommerce and Microsoft’s expansion of the Teams platform as examples.

He continues: “I’m bizarrely quite optimistic having gone through so many recessions. I started my own business in a recession and it’s a great time to focus.”