Ad agencies grapple with COVID-19 disruption

Public health measures have delayed shoots, campaign launches and pitches, with disruption to clients' business looming.
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Advertisers are trying to figure out how to operate in a rapidly changing environment due to COVID-19, as regular functions of day-to-day operations have been disrupted by public health best practices and client business faces a great deal of uncertainty.

Strategy has spoken with several executives at Canadian agencies about the impact it has been having on their business, and most referenced the constantly evolving and erratic nature of the coronavirus.

“You almost have to ask that question a few times a day. It is literally changing as we speak,” says Arthur Fleischmann, group CEO of John St. and Ogilvy Canada.

Like Fleischmann, Dave Lafond, co-founder and president of No Fixed Address, is assessing the potential impact of COVID-19 as it unfolds. “Like the rest of the world, we are taking it hour by hour and putting people first,” he tells strategy in an email. “The situation is fluid, much like the business world of today.”

Dom Caruso, president and CEO at BBDO Toronto, is taking a measured approach to business and operations in the age of COVID-19. “BBDO is going to take a responsible approach to best serve our clients and act as appropriately as possible given the pandemic,” he said in an email.

Most executives have said they have been following best practices as laid out by public health officials in order to keep staff safe and healthy, such as limiting larger meetings, non-essential travel and providing capabilities for employees to work from home and not have their day-to-day tasks be disrupted – though as the week has gone on, more agencies have been encouraging staff to work remotely. And, speaking on background, many of those say some of those best practices have disrupted things that are essential to an agency’s business.

Some agencies are among the businesses that have closed offices temporarily due to staff attending functions where infection may have happened, or a risk of infection at a different office in the same building. Edelman’s Toronto office was closed this week and the agency instructed staff to work from home after “a limited number” of employees attended the PDAC conference last week, where an attendee tested positive for COVID-19, though it is just a safety precaution at this point, as no staff have tested positive for the virus.

Other executives have said that several major campaigns and client projects have been delayed – not just in terms of public activations and experiential campaigns, but integrated work and shoots for future campaigns. Several pitches and RFPs have been paused, while others say planned new staff hiring processes have also been put on hold.

“The impact is really putting in place business interruption protocols, should this thing get worse,” Fleischmann says, adding that constant communication with staff and clients has been key to keeping staff on top of the rapidly changing situation, both from a business and a personal health perspective. For an example of how quickly the situation can change, Fleischmann had told strategy on Thursday afternoon that guidance from public health agencies didn’t suggest that any shoots, pitches or major meetings would need to be cancelled. By Friday morning, he said that both Ogilvy and John St. “will move to a work-from-home policy” effective Monday, remaining open only for critical meetings or for staff to retrieve personal belongings.

Sébastien Fauré, co-founder of the Humanise Collective and CEO of Bleublancrouge, says his agency’s main priorities are its staff and those that are at risk, as well as the cash flow impact on the agency. A third “big pillar” Fauré identifies is its plans for its clients. He says they’re looking at every client situation to identify which mandates are critical to them, as well as which ones have risks of being cancelled or postponed. And, at the same time, it is looking ahead to “how do we allow them to cope with what’s coming up?”

Fleischmann notes that in some of John St. and Ogilvy Canada’s business, the risks are not just for the agencies, but the supply chain for clients, especially for those who have inventory coming in from overseas or are currently in high demand.

“The impact is, for most businesses, probably a negative impact, or a risk of a negative impact,” he says. “It hasn’t happened yet, but the concern is that products won’t come in if people are self-isolating. They’re not spending on entertainment and going out. You’re not maybe buying as much clothing. So this could have a very, very serious impact on the economy and on our clients’ businesses in the second quarter and third quarter.”