She pointed out that the advertising industry is quite large, it includes advertising agencies, media agencies, the media, as well as many other companies. Among the members of the association, which are advertising agencies and media agencies, media, public relations agencies and media research companies, there is a decline in revenue in virtually all segments.
Among other things, Liepiņa mentioned that the situation for agencies depends on the portfolio of their clients. “There are agencies that felt the impact of Covid-19 much earlier, before the state of emergency was declared in Latvia. These were global clients whose business slowed down much earlier than in Latvia. This reduction differs for each agency, but in general everyone feels the decline. maybe not everyone felt yet, then in April there is already another scene, “she said.
The head of the association estimated that the revenues of advertising and media companies have fallen from 30% to as much as 70% since the beginning of the Covid-19 pandemic.
“In May, some companies are already predicting a reduction of more than 70%. For others, it may be 50%. In any case, these figures show that the decline in the advertising and media sector is very large. If we look at the profitability and profits of agencies, over time “If the situation does not change, it will be a severe blow,” said the chairman of the board of the Latvian Advertising Association.
When asked about state support for companies in the sector, Liepiņa admitted that most companies in the sector do not qualify for downtime support. “There are companies that have applied for downtime benefit, according to the State Revenue Service, but the support would be much more effective if it were possible to receive partial downtime benefit,” said the head of the association.
Among other things, she explained that the advertising and media industry is highly seasonal – the most productive months for business are usually March, April and May, but the next productive months are September, October and November.
“Therefore, it is very difficult to meet the criteria for the turnover comparison period. If the current high season turnover is currently compared to the average monthly turnover last year, then, of course, some agencies do not meet the criteria and can not apply for support,” said Liepina.
It has already been reported that according to the Latvian Advertising Association, last year the media advertising market in Latvia amounted to 81.971 million euros, while in 2018 – 85.2 million euros.