April is the cruellest month famously opined TS Eliot (can’t help recalling a celebrated Private Eye spoof with January, February and March crossed out by Ezra Pound – try April, he wrote.)
But it’s no laughing matter for UK adland with some pundits predicting a 50 per cent fall in April adspend, which really is falling off a cliff.
Suddenly the Covid-19 outbreak is taking some new turns: the spirit of the wartime blitz is ebbing somewhat as the Government comes under fierce pressure for its lack of testing (we haven’t got the chemicals it says, well you should have say its critics – the country is awash with privately-owned medical labs) and people and companies try to track a way back to normality – which still looks somewhere over the horizon.
The banks too are under fire for demanding personal guarantees for supposedly freely available government loans – but what did you expect from Britain’s awful bankers? Or, indeed, the Treasury.
Conventional wisdom has it that spend cancelled now finds its way back sooner or later but, with a 50 per cent fall, that looks unlikely. The travel and airlines spend, especially significant for ITV, certainly won’t come back (some airlines and many travel companies won’t return at all.)
Euro 2020 will be pushed into next year as will the Olympics, so they, presumably will do their best to prompt a bumper 2021. But the first half of this year looks a total write-off.
Some economists (snowflakes are thin on the ground in these quarters) reckon the mid-term consequence of Covid-19 could actually be good for the economy by weeding out weak companies. Allegedly these have been kept on life support since the financial crisis of 2007 by the tidal wave of cheap money instigated by central banks.
The UK’s dire productivity record in the intervening period is partly blamed on this: there may be a bewilderingly high number of people supposedly employed (many self-employed) but GDP has risen only modestly. So more people are producing less, or not much more, per head.
That’s as maybe, but adland is hardly populated by well-financed companies so there will be very many casualties. There was an over-supply in agency land across the world before the virus struck anyway. The good news, if there is any, is that barriers to entry are low (often blamed for the over-supply) and people will re-form post crisis.
Things can change very quickly. If the UK government and the medical panjandrums can get the virus numbers coming down then guarded optimism could return swiftly and some advertisers will loosen the purse strings. That, though, may be a triumph of hope over expectation.