DMA calls for extra help as Covid wipe-out fears grow

The DMA has added its voice to calls for a fresh package of support for the advertising and marketing industry amid fresh concerns that the Government’s new lockdown measures will push many SMEs – the bulk of the industry body’s membership – to the brink.

While esearch for the DMA’s sixth “Coronavirus – The Impact on Business” survey was carried out before this week’s Government announcement, the industry body says the figures are “disappointing”, with revenues remaining at just over two-thirds pre-pandemic levels (72.1%).

This is a noticeable improvement from the 53.7% seen in April, but significant fears about cashflows and the prospect of further job losses across the data and marketing industry remain.

DMA chief executive Chris Combemale said: “Trading remains extremely difficult for many businesses across the data and marketing industry. Despite some revenues gradually returning, we are still nowhere near pre-pandemic levels and many businesses will have difficult decisions to make over the coming months if they are to survive.

“We welcome the Government’s approach, which seeks to protect both people’s health and livelihoods, but it is clear that today’s new measures will slow down the recovery and must be balanced with additional support for businesses.”

Half (52%) of the data and marketing professionals surveyed say their organisation has used the UK Government’s Coronavirus Job Retention Scheme to avoid redundancies. However, a third (33%) of businesses have already or expected to let permanent staff go – a number that will likely increase with further strict measures on businesses ability to operate, the DMA says.

Just a quarter (27%) expect to be able to benefit from the Job Retention Bonus, which offers employers £1,000 for every furloughed employee retained beyond January 2021, implying there may be a difficult decision made into autumn and the New Year.

In addition, the previously thriving freelance economy around the industry continues to struggle, as 37% of organisations either have or expect to not retain these positions over the coming months.

Combemale continued: “In these challenging financial times for many businesses, we are continuing to lobby Government on behalf of our members on a range of key areas that our industry needs to both survive and then thrive post-outbreak.

“Most urgently, the Government announcement combined with our survey results make it clear that an extension of the furlough scheme until at least the end of December is essential to ensure companies have the confidence to retain staff and freelancers.

“In addition to today’s measures, further local restrictions will likely hit regional economies severely too. This could result in small- and medium- sized businesses being the worst hit too. So we would also encourage government, both national and regional, to consider targeted local support to ensure these vital employers are able to survive.”

Meanwhile, the Advertising Association has renewed its call for a tax credit for the industry in light of the latest restrictions; a move which has won the support of agency body the IPA.

AA chief executive Stephen Woodford said: “Advertising is a driver of economic activity and growth, and with business and consumer confidence so fragile, we call on the government to match further restrictions on economic activity with measures to alleviate their impact, particularly to continue to support jobs and businesses that are hardest hit, like many of the media sectors dependent on advertising.”

IPA director general Paul Bainsfair backed the AA’s call, adding: “During lockdown we have seen countless examples of agencies continuing to produce wonderful demonstrations of creativity and effectiveness, despite the restrictions.

“It is a delicate balance to tread but we hope this reinstated [working from home] measure will be an effective short-term move in order to allow longer-term gains in the future.”