The Conservative Woman has a must-read piece by writer Frederick Edward on the dramatic change that has taken place within the advertising industry over the past year. First, it tells of the shrinking trade that newspaper advertising it is getting from the companies that were its biggest customers.
According to reports, the industry-wide ad-spend for 2020 was down 14.5%: a decline of £3.6 billion. Some areas of advertising have witnessed complete destruction as the Government has clamped down on businesses’ ability to operate and has restricted civic freedoms.
The UK’s top advertisers, led by McDonald’s and Procter and Gamble, have slashed their budgets: why put adverts on the telly when your outlets are closed? A report from August 2020 states McDonald’s year-on-year advertising had already fallen by 97%. Even Amazon’s fell by 77% and Sky’s by 60%. Entertainment and leisure (-£207million) and travel and transport (-£138million), hit hardest by restrictions, saw the largest cuts.
Such reductions had a dramatic impact on companies reliant on them for their advertising revenue, namely newspapers.
Daily Mail and General Trust reported an advertising revenue fall of around 25% between September 2019 and September 2020; given that half this date range is pre-pandemic, the impact is likely greater still.
Fortunately for the industry there is one customer that has stepped in and kept the industry afloat.
Until 2020 the Government was not a major advertiser in newspapers. According to Newsworks, the marketing body for national newspapers, between February 1st, 2019 and January 31st, 2020, the Government was 30th on the list of UK’s spenders on newspaper advertising, shelling out £6.23 million over that one-year period (approximately 13% of HM Government’s advertising budget), a figure dwarfed by Amazon and Sky, which spent five times as much.
All that changed during the pandemic, when the Government became the nation’s largest advertiser across all media. Between March 23rd and June 30th, 2020, Public Health England’s advertising spend increased by 5,000 per cent (year-on-year), reaching £44 million in that three-month period.
Though less than a quarter of the Government’s total outlay for COVID-19 information and communication, the spending has proved significant enough for the newspaper industry to hail this continued Covid advice blitz as vital for its revival in 2021.
This market shift is not without consequences.
The Fourth Estate is supposed to hold the Government to account. It should be the newspapers’ responsibility to scrutinise the unprecedented state actions taken in response to the pandemic under the emergency powers of the Coronavirus Act, now twice extended, and bringing about the greatest loss of liberty in our country’s history.
When newspapers find themselves increasingly reliant on the largesse of the UK’s now-largest advertiser, can they be trusted to question robustly and independently the approach the Government has taken?
As Laura Perrins pointed out last week, the media rarely ask any tough questions. Pretty much every question they put is, why didn’t you lock down earlier, and why didn’t you lock down harder? Why didn’t you enact more draconian measures sooner?
Finally, the piece concludes:
It is nothing new that the media has a symbiotic relationship with Government. For journalists, it’s their need for access to information and promises of scoops; for the politicians, it’s their need for the platform to promote their policies or their personal profiles. But now the balance has changed. With the Government increasingly becoming the editors’ paymaster, paying to push their policies, where is the quid pro quo? What chance of these newspapers raising and ruthlessly pursuing the questions so urgently in need of asking, or indeed, of running a campaign against lockdown for example? A lot less likely is my guess.
Worth reading in full.