Prime Minister Boris Johnson’s optimism that Covid will be beaten by spring has yet to filter through to marketing businesses, with the sector looking for its own miracle vaccine to avoid what some are predicting will be a challenging festive season.
Despite announcements of additional Government support and positive early signs on a variety of potential vaccines, the latest figures from the DMA’s “Coronavirus – The Impact on Business” survey suggest the optimism felt over the summer months may have dissipated slightly.
The estimates of revenue decline amid the pandemic had improved over the summer, from a low of almost half (-47.2%) in May to around a quarter in September (-27.9%). However, these early signs of recovery appear to have slipped as new restrictions have meant revenue decline has risen to around a third (-34.2%).
In November, the majority (79%) of organisations surveyed reported the economic impact of the pandemic as being negative – with a quarter (25%) believing it will be extremely so. Key concerns about cashflows (76%) and cutbacks (53%) continue to lead the way, but there is also rising sentiment about the burden of social distancing (41%) and restrictions disproportionately impacting certain sectors (38%).
Moreover, nearly three-fifths (59%) of businesses expect to see overall budgets decrease in the coming year, with staffing (59% expect the budget to decrease), marketing (57%), and capital expenditure (56%) expected to be worst hit.
DMA chief executive Chris Combemale said: “Across the data and marketing industry, trading remains extremely difficult for many businesses. Revenues remain significantly below pre-pandemic levels and budgets for the coming year look set to be similarly reduced.
“Even as news of positive progress on vaccines offers a beacon of light, many businesses will have to make difficult decisions over the coming months. We welcome the Government’s unprecedented support for business and will continue to represent our industry, ensuring it has the assistance it needs.”
Three-quarters (75%) of professionals surveyed reported they are continuing to work from home and avoid unnecessary travel, a rise from 66% in September. They also increasingly expect to remain in this home working environment well into the New Year – on average respondents expected to work from home for around 50 days, up from just under 40 just two months ago.
However, there are some concerns about the ability to continue to serve customers effectively in this environment. Over one in three of the organisations that responded to the survey said their ability to serve customers’ needs was becoming harder (43%) and to carry out marketing was also getting worse (35%).
The DMA study follows the IPA Bellwether Report published earlier this month which revealed that, while Covid-19 was still wreaking havoc with companies’ marketing plans, direct marketing had fared better than most and there is a new sense that increased investment in digital, data and customer experience is just around the corner.
Meanwhile, BlueVenn’s recent Maturity Index Report found the number of companies that are unifying their data in a sophisticated way has grown by 16% in the past year alone; and those businesses that do unify data are more than twice as likely to achieve their business goals and see a return on their investment compared to peers that do not.
Brands urged to tap data to fight ‘Blue Xmas’ forecast
Customer data platforms ‘trigger double digital growth’
Direct mail industry bullish about fighting off Covid hell
Ad budgets derailed again but is that a light ahead?
Digital weathers the storm as forecast proves spot-on
Digital to escape Covid ad wipeout but still shrink 5.5%
Ecommerce sites lure adspend as Brits admit addiction
Covid lockdown fuels the growth of subscription Britain
Brands’ response to Covid will define business for years
Over half of brands have increased spend since outbreak