It’s been a difficult few months for the entire advertising industry and with uncertainty still a key factor, the Government needs to continue its support for business, including a tax credit for advertisers, while brands need to keep a very close eye on consumer sentiment, writes Mark McCann.
So, it’s now mid-May and where are we all now?
At OLIVER, we have seen some revenue contraction. The business impact has differed throughout the various industry sectors we support and we expect the recovery may follow a similar pattern as we emerge from the lockdown.
Employee wellbeing, going above and beyond for our customers by being innovative and having a great entrepreneurial spirit remains our key focus. Managing the fundamentals of our business is a priority and we need to remain “ultra cautious” around cost and cash management. Keeping our communities connected has been a priority for the Group. OLIVER Ireland has been supporting our wider global business with our team working across global accounts.
A recent internal employee sentiment survey suggested employees see key advantages of working from home (WFH), having no commute, spending less money on travel and lunch, eating more-healthily, more family time and better work life balance. Key disadvantages include blurred lines between work and personal time, no sitting with teams and socializing.
The past couple of months has raised the question “what will the new normal be for our businesses”. WFH is delivering benefits and offers great flexibility. The traditional Agency model has always focussed around the physical agency and the energy that the teams derive from the culture and environment. This will have to change with teams now potentially staggered (A/B) policy and remote working remaining for some time to come. The new normal of meetings and pitching through video conferencing is here to for the foreseeable future.
The importance of providing a safe and flexible working environment for our central agency team and all on-site agency teams is a top priority for us. We are looking at the possibility of re-opening our central hub office in Glasnevin in line with HSE and Government phased regulations. As we have a number of teams on site with clients, starting conversations with them around their plans for a phased re-opening of their businesses is our next priority.
We can expect social distancing for some time and the 5 step Government plan has given us a potential roadmap to get back to the new normal with the possibility of some bumps along the way. The Government needs to plan for the continued subsidy supports to the business community, I believe (even in a reduced capacity) the subsidies need to remain beyond the planned June time. They have ensured companies were given a lifeline to continue to trade and keep our talented people employed doing great work for our clients. These continued supports will be key to ensuring companies can exit the lockdown.
There needs to be incentives for consumers to start spending again and in turn boost advertising income. It is time our government stepped up and acknowledged the great services and return on investment Ireland Inc makes from our industry. The AAI’s lobbying of government to support our industry through a tax credit model makes perfect sense. This would go some way to maintaining dedicated talented people in fulltime employment and help boost the sector as we contemplate exiting this unprecedented recession.
Brands are also planning a cautious approach back to market and most are planning for restrictions on movement to continue until September and possibly into October. As they monitor the key forces in the market and the economy stabilises we expect they will spend more. Customer sentiment is changing week by week with every government announcement. With considerable economic uncertainty it is vitally important that we understand how these changing behaviours will impact our clients businesses and keep them fully informed of the changing moods of consumers.
If recessions in the past have taught us anything, key areas that will be monitored closely by brands are consumer sentiment and economic recovery. We can expect a continued contracted period of spending by consumers. The big question is for how long?
Mark McCann is CEO of Oliver Ireland.