EXCLUSIVE - Ad agencies and a creeping form of lockdown

Chris Pash
By Chris Pash | 30 June 2021

Advertising agencies are following an established strategy for the latest lockdown in parts of NSW, Queensland and Western Australia.

The systems are in place with many working from home two to three days a week in any case.

The lockdown means the at home work goes to five days. Many of the big agencies are reluctant to comment but agree it’s business as usual while authorities work through the latest outbreak.

But restrictions also have an impact on the economy which flows through to the advertising industry.

Analysts at Morgan Stanley estimate that the direct economic impact of the current lockdown in Sydney -- Australia's kargest economic centre -- is about $2 billion or 0.1% of annual GDP.

Steve Allen, Pearman's director of strategy and research, says the latest lockdown is of the creeping variety, spreading to more markets.

“Non Food Retail, Entertainment, Hospitality, Tourism & Travel are all sent into chaos,” he says.

“Even Automotive is arguably affected. Let alone the live sport scheduling and telecasting issues, which can have a knock-on effect.

“Marketers require confidence and predictability to mount campaigns, as they are nearly always planning in the future. When this is missing hesitancy, and often, procrastination (especially from boards) creeps in.

“The media and advertising suffer. We predict a point or two of recovery growth disappears from the market.”

Ben Allman, sales director APAC at out-of-home player Broadsign: “It seems the path to returned growth may be littered with a few more speed-bumps yet.”

However, he sees the industry likely to exceed forecasts, pending further lockdowns.

“There’s no shying away from the fact that 2020 was a horror year and, while we’re coming off a lower base, we’re certainly on the right trajectory,” says Almman.

“SMI data is showing that over the past few months, OOH bookings are more than double what they were in the corresponding months of 2020.”

Analysts at JP Morgan say the Sydney lockdown is obviously negative and will become more so if they continue past a few weeks.

But they don’t think it’s time to change forecasts. “Our global colleagues have similarly noted that localised European lockdowns this year have not delivered the damage to GDP one would expect.”

Sam Buchanan, IMAA (Independent Media Agencies Australia) general manager, says the lockdown isn’t a big shock to the system.

The not yet released IMAA June Pulse Survey shows 88% of agency members working from home in some form.

“Compared to 2020, we know that there is a light at the end of the tunnel, everyone has learnt from last year and knows what to do,” says Buchanan.

“We will come out of this and rebound again quickly so there is a relatively positive sentiment among our members.”

Phil McDonald, partner and managing director Brisbane-based BCM: “In theory we’ve got to just ignore these new lockdowns and carry out our business 100% as normal.

“As long as we continue to keep an eye on our people, we should be able to survive these shorter lockdowns with minimal disruption. As sad as it is, this is now situation normal for all of us.”

Dan O’Brien, commercial director and head of strategy, Frontier Australia, says lockdown feels more familiar.

“Clients seem to have been less reactive this time around so far,” he says. “When you think about it, we have been very lucky in NSW and greater Sydney to avoid it for this long.

“While obviously not ideal, we have found the transition back to full time WFH a little easier this time around given we are all much more accustomed to the WFH life and processes now.

“Depending on how long it lasts - hopefully only two weeks - the challenge once again will be keeping up connection with staff, particularly those at more junior levels.

“Alongside maintaining a high standard of client service outputs and communication, the priority for us during hard lockdowns is making sure everyone is supported across the business.

“We find that’s one of the biggest challenges with everyone working from home, given what we do relies heavily on team work, collaboration and bouncing ideas off one and other.”

Melbourne-based John Vlasakakis, head of organic search at Next&Co: “All our staff are Melbourne based so we are lucky to be working together again but we are spending a lot more time with clients interstate talking on a more personal level to lift spirits. We know this is very important for mental health.

“We have also noticed client spends going up having predominantly digital spends.”

Chloe Lane, chief operating officer at Hogarth Australia, says working from home, a short-term solution for some businesses, has became the norm for the Hogarth team.

"The push to remote working allowed us to drive our 'smarter' proposition harder, and our people were quick to adapt and apply their brilliance," says Lane.

"Last year, our metrics confirmed that productivity was at an all-time high and our hyper-growth continued allowing us to hire many new specialists.

"To keep our people and clients safe as we navigated the pandemic, we introduced strict protocol and new ways to deliver. We launched virtual set approvals, called upon our global network of talent and locations, used skeleton crews, leveraged our specialist post-production facilities for clever editing, AR filters and VFX, and we repurposed assets through modular platform solutions.

"In the thick of COVDI-19, we successfully delivered a complex brand super-shoot, built out three additional content studios, and kept many eComm sites alive with new content to ensure client sales remained buoyant." 


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