Advertisers expected to spend almost £725m less than last Christmas | Media

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Advertisers are cutting more than £700m from their marketing budgets in the run-up to Christmas, as the pandemic puts paid to the big budget extravaganzas that normally bombard the public over the festive season.

While the annual Christmas advertising battle will be as fiercely fought as ever, with a total of £6.2bn spent across the fourth quarter, consumers are unlikely to see glitzy tie-ups such as Mariah Carey’s reportedly £9m deal to promote Walkers festive-themed crisps last year.

UK advertisers are forecast to spend £724m less than last year, a 10.5% fall. This would be the biggest percentage drop for the so-called “golden” quarter since the industry bodies the Advertising Association (AA) and Warc began compiling figures in 1982.

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While the AA/Warc forecast points the finger at factors including the increased likelihood of sustained localised lockdowns over the winter, a disorderly Brexit and rising unemployment, those in the ad industry say brands are struggling with what tone to strike this year because of the pandemic.

“Brand owners and their agencies are wrestling with what is the right tone and what is the right scale to adopt this Christmas,” said James Murphy, a co-founder of the New Commercial Arts agency, who has previously worked on John Lewis’s much-lauded Christmas ads.

“Too celebratory or glitzy and it looks like you are being glib and ignoring the pressures so many people are feeling. But equally if you are too dour and down you miss a chance to cheer people up at a time of year when people expect brands to be jovial. And remember, even in the year of a pandemic Christmas will represent a huge proportion of turnover for many brands.”

The advertising budgets for TV, which is the traditional launchpad of the big Christmas ad campaign, is forecast to be down 2.7% to £1.35bn in the fourth quarter, underlining its continued relative importance for advertisers seeking big audiences.

National and regional newspaper publishers are expected to be hit hard, with spending forecast to be down 15% and 20% respectively, although online ads will fare better with cuts of 3.7% and 11%. The magazine sector faces a 16.6% fall, while radio advertising will be pared back by 13%.

The deepest advertising cut (66%) will affect cinemas, which are struggling to draw audiences with no new Hollywood blockbusters. The out-of-home sector, which covers everything from billboards and posters to sites in train stations and airports, is forecast to be down almost 20%.

While the numbers make for dire reading, industry figures do not believe they mark the start of a wider, longer term decline for traditional media advertising.

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“I wouldn’t ring the death knell for traditional advertising just yet,” said Nat Poulter, the chief operating officer at digital media agency Jungle Creations. “Every year someone predicts its demise and every year they are wrong.”

The AA/Warc report says it will not only be traditional media that face a cut in advertising spending, but for the first time ever brands’ digital budgets are expected to be reduced.

Spend on search and online display, which is dominated by Google and Facebook, is forecast to fall by almost £300m in the fourth quarter. However, with spending on digital ads forecast at £3.57bn, it remains the most dominant media accounting for 57% of the total £6.2bn the report says will be spent on marketing in the last three months of 2020.



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