The UK ad market is facing a drop of about 50% in April as the coronavirus pandemic hits vast swathes of the economy, according to multiple sources in agencies and media owners.
The boss of a leading media agency group expects the market to "halve" in April. A senior broacasting figure also estimated a 50% slump for TV next month. "It's a car crash," this person said.
One ad sales chief at a news publisher described trading conditions as "very, very bad", partly because of some disruption for print newspaper distribution.
"All bets are off" for the second quarter, according to a leading digital media platform, which forecast a double-digit decline in online adspend since mid-March.
Cinema ad sales have ceased, after a UK shutdown of all cinemas. An independent agency founder added that it was "very, very tough" for the indie sector.
The ad market is expected to have dropped about 20% in March, industry sources say.
The UK government ordered a lockdown on 23 March – a move that has hit plans for April. May could be worse and be down as much as 75%, although estimates vary wildly.
"Clients who we thought would spend are changing their mind," one agency leader said.
Marks & Spencer and Dixons Carphone are among the many brands to have told investors that they have cut marketing spend. Sources said travel adspend has fallen to virtually "zero" and automotive has slumped by as much as 85%.
Retail adspend, including a significant amount of ecommerce, has also been hit hard by the government’s lockdown. Some brands, including Next, have shut online delivery centres. Subscription-TV streaming services, supermarkets and the government are among the few bright spots.
However, some of the online grocers have not increased advertising because they can’t keep up with demand, according to one agency.
"A key question with these cuts is: are they cancellations or deferments?" one top-five media owner said, looking ahead to a possible recovery in the later part of 2020.
Most advertising and media companies have already cut discretionary spend in the past two weeks.
Many have said privately that they are looking to put some employees on part-time hours, such as a four-day week, and to "furlough" other staff, meaning they are not required to work.
The government will pay 80% of salary up to £2,500 a month for furloughed staff as part of the Coronavirus Job Retention Scheme.
City AM and Time Out are among titles that have stopped print publication temporarily, Ocean Outdoor is moving employees to part-time working and Newsquest has put some staff on furlough.
Stephen Woodford, chief executive of the Advertising Association, told Campaign: "This is clearly a very difficult time for all parts of our industry – advertisers, agencies, media and tech companies alike – and we are likely to see more reports over the coming weeks of extreme pressure being exerted on short-term adspend.
"The government has put in a series of measures to help businesses across our industry in many different ways and we urge everyone to review and access these as quickly as possible.
"We are in daily conversations across government so please feed back directly to us, or to your own trade association, wherever you might be facing issues accessing these schemes and with what additional help might be needed."
A Campaign survey two weeks ago found more than half of readers expected a drop of at least 20% for the UK ad market, but trading conditions in UK advertising have worsened dramatically since then.
A drop of 50% in April would be the worst monthly fall in living memory.
Research from Millward Brown and other organisations has shown that brands that continue to invest in advertising during a downturn perform better, particularly during a recovery.