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AA WRITES TO RISHI SUNAK

/ March 25th 2020
Advertising and the Economy Coronavirus

The Advertising Association’s Chief Executive Stephen Woodford has written to the Chancellor of the Exchequer with details of the effects of the COVID-19 outbreak on the British advertising industry and the steps we believe are necessary in order to safeguard our sector throughout this difficult period as it continues. Read the letter in full below. 

Dear Chancellor,

I am writing on behalf of the Advertising Association, which represents all the parts of the advertising and marketing communications industry, including advertisers, agencies and the commercial media. I would like to address our industry’s main concerns during this difficult period and what we would like to see the Government do to support the advertising industry moving forward.

This is an incredibly difficult time for British business and the advertising industry, like other sectors, will be hugely affected by the COVID-19 outbreak. Despite strong growth forecasts, the disruption caused to the hospitality, retail, travel and tourism sectors, combined with the likely wider economic downturn, is creating significant challenges and uncertainty for the advertising and media industries, which is set to continue for some months to come.

Whilst we appreciate the targeted support for businesses and workers announced by the Government in recent weeks, which will be helpful for advertising businesses, we need confident leadership from the Government to encourage companies to continue to invest in advertising production and in marketing campaigns, rather than withdrawing from them. This is crucial so that other parts of the advertising supply chain weather the storm.

We urge the Government to take the following steps in order to safeguard our industry throughout this difficult period:

  • Introduce a package of financial relief for self-employed/freelancers. We welcome the measures already in place to protect workers and urge the implementation of a minimum income scheme for freelancers and the self-employed who are not included in the current policy.
  • Extension of business rates relief: clarity on definition of ‘leisure, entertainment and retail’; and extension of this relief to other affected sectors.
  • Faster access to Coronavirus Business Interruption loans. Many companies need financial support now, so it is vital that banks are able to provide this service immediately.

The strain on the economy is seriously suppressing our industry, with Q2 advertising inventory being cancelled across different media sectors. Creating and producing adverts is the primary output of advertising agencies and advertising production companies. Without the availability of ad space or clients willing to advertise, these businesses will struggle to function and in the absence of the funding streams provided by advertising, broadcasters, online platforms and publishers will suffer too.

Advertising mediums which project to audiences in public spaces such as Out of Home and cinema advertising will face their own challenges as social distancing measures set in. Without an audience these mediums do not have a business proposition and consequently forward advertising bookings have collapsed. The major Out of Home vendors are estimating that Q2 income will decline between 80-100% year-on-year. For these subsections of our industry this is an existential crisis.

Our industry is a catalyst for growth, competition and employment, with around 1 million jobs being dependent on advertising. It is therefore vital that the industry is protected.

We would be grateful to you for any additional support, you could give our industry at this difficult time. While we have outlined our immediate business concerns in this letter, we continue to believe that Government should also consider running a large-scale public information advertising campaign on COVID-19, which our industry would only be too happy to support.

If you would like to discuss any of these issues in more detail, please do not hesitate to contact me.

Yours sincerely,

Stephen Woodford
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