A blue light shone brightly over the deserted streets of Piccadilly Circus on Thursday night. There was no red from the Coca-Cola ads and no sign of the Samsung branding. Instead, the iconic Landsec site was taken over with a message of support for the NHS staff who have been working around the clock to fight the coronavirus pandemic.
As much of the nation follows government advice to stay at home, the Westfield shopping centres, London Underground and major roads across the country are also empty. These are some of the busiest sites for out-of-home advertising, but right now there are no consumers to target and an increasing number of big spenders are pausing their campaigns.
It’s a difficult and unprecedented time for the out-of-home sector and one business leader who specialises in outdoor advertising told Campaign that the second quarter is going to be a bust.
The source, who wished to remain anonymous, added that this situation requires pragmatism across the supply chain as everyone works to make sure they have a viable business once the pandemic is over.
"It’s not going to be a great Q2," this person said, pointing out that it’s a case of whether the situation will continue into the third quarter or if the country will get back to some normality – and that depends on how well the government’s stay-at-home strategy works to suppress the virus.
As with other media (such as TV), many brands are deferring spend, not cancelling their campaigns, the source explained. This is a small glimmer of hope for media owners who are trying to be as flexible as possible as they hold on for the market to recover.
Ali MacCallum, chief executive of Kinetic, pointed out that it is a critical time for media businesses because they are so aligned to client services and tend to run lean operations. He asked: "So how can we minimise the impact on cost but not limit the future?"
Outdoor media owners are doing as much as they can to mitigate the impact. On 24 March, Ocean Outdoor issued a trading update saying that it was cutting all discretionary spend, reducing employee hours, approaching suppliers and landlords, and introducing "other cash-conservation measures".
"Covid-19 presents digital out-of-home with a tough challenge," chief executive Tim Bleakley noted. "Governments have ordered DOOH consumers to stay indoors – something which is clearly out of our control, but which will have a material impact on our business if prolonged."
It’s a similar picture for JCDecaux. The following day, the business revealed in a trading update that it was cancelling all of its 2019 dividend proposals in an attempt to strengthen its liquidity and balance sheet.
Jean-François Decaux, chairman of the executive board and co-chief executive of JCDecaux, explained that the company will also cut discretionary spend and capital expenditure, introduce temporary unemployment measures, reduce hours and implement a voluntary salary reduction.
There is a positive side to the doom and gloom, however. When a series of London landmarks turned blue on Thursday night in support of the NHS’s efforts, it was clear to see how fast the out-of-home sector can respond.
MacCallum noted that there is a "huge opportunity to demonstrate the power of out-of-home and its immediacy of getting messages out there very, very quickly", thanks to new digital screens and technology.
Ocean has also been running campaigns across its inventory to support local heroes, key workers and services on the front line. Bleakley told investors that the business, in addition, is supporting local businesses and brands that are "in the eye of the storm" with emergency media funds.
Looking ahead, MacCallum is optimistic that the sector will bounce back once the pandemic is over. He said that the third and fourth quarters of the year are looking busy, although conceded that the impact of the Olympic Games moving to 2021 will be felt across the industry.
"There’s a huge pent-up demand," he said. "Lots of people have had to cancel their holidays and will be rebooking those; they’ll be going to see films like Bond, which was pushed back.
"The interesting thing about Brits is that so much of what we do is about being mobile and outdoors or at restaurants – and that demonstrates how big an opportunity there is for outdoor."
Bleakley echoed these views in the Ocean trading statement. "While restrictions on the movement of people have directly impacted our sector, equally this crisis has highlighted the importance of the out-of-home medium the world over," he said.
"Outdoor is the place where people want to spend most of their time, so as soon as the restrictions are lifted, our medium is ready to take the lead by inspiring people to get back out there and rebuild."
That said, the industry – as are all business leaders – is mindful that at the moment it’s just not clear when exactly the country will return to normality.