Post-Brexit, Adland Should Keep Calm and Carry On

What a frenzied few weeks.  The referendum party, which was supposed to be a quiet, reflective affair, was anything but and whether you celebrated hard or drowned your sorrows, you have probably spent the intervening time wondering what happened and what happens next. 

Now is not the time to kick back on the sofa, sleep it off and wait for Monday morning, there are things to do.  The UK is still open for business.

Let’s begin by taking stock. 

Much has been said about what a leave vote means for advertising.  Less than a decade ago, advertising was rocked by a whirlwind of wider economic strife and a pervasive air of uncertainty.  This time around the industry seems much better placed.  Since the referendum and amidst another round of uncertainty, the forecasts for ad market growth have been adjusted widely from a little off the top to doom, doom, doom. 

In reality, the UK’s advertising market has proven to be extremely robust and is structurally sound. The media landscape is increasingly competitive and technology adoption and usage, which will help drive digital ad spending, is as strong in the UK as anywhere else in Europe. Furthermore, consumer spending, which may stall, will certainly rebound.

When we were last in a period of such uncertainty, we got a flavour of where the world was heading. Brexit could simply be a catalyst that gets us to a future state a little quicker than anticipated.  From all sides, the mantra will be one of efficiency.  On the one hand, the spotlight is likely to shine brightly on internal processes and organisation - EY recently found over two thirds of agencies believe they could do a better job of allocating resources to projects.  On the other hand, the bigger cry will come from advertisers searching for more performance based advertising.  The quest for ROI, as the holy grail of advertising, will see attention shift more rapidly to digital and more programmatic models.

So what’s first on the to-do list?

Divorce discussions rarely conclude without a little haggling and Brexit is a fight over a lot more than just custody of the cat.  What’s up for grabs won’t be restricted to advertising as a sector or even the creative industries as a whole but to the entire economy.  As trade-offs are made, a “wait and see” approach is clearly not an option.  It’s imperative to get on the front foot, not only to think about the lines in the sand but where you do have to give way, what will you want in return?  As withdrawal discussions play out, two areas will be critical for advertising and marketing services.

First up is talent.  The advertising industry is cosmopolitan, multicultural and focused on creative capabilities not country of origin.  The prevailing talk tends towards creating a points based system but these are not all or nothing.  They contain caveats, exemptions and grey areas based on different roles, sectors and economic needs.  What would it take for the industry to remain competitive, what would it take to attract the best talent and how can that be baked into the negotiations.

While thinking through future scenarios, also be the good Boy Scout and be prepared for whatever the future looks like.  Even without significant restrictions on movement of people there will be increased layers of complexity, cost and administration.  These already need planning for.  How many UK companies actually have a record of their EU employees?  Exactly!

The second big bucket is trade.  A vast amount of the UK’s advertising and marketing industry relies on exports.  According to the IPA’s Advertising Pays, some £4.1 billion is generated from overseas trade.  The imposition of tariffs is not a given and may not happen but once again planning ahead gets you on the front foot.  Whereas the lens may have historically been turned to Europe, already there are plenty of conversations about other markets and other opportunities.  If nothing else, Brexit is forcing a rethink about opportunities further afield, not least in Asia.

In reality, the UK’s advertising industry has long been recognised as world class.  Of late it has also shown itself to be robust.  By whatever criteria, whether that’s the strength of innovation, technology, creativity, leadership, it is in a remarkably strong position.  It is an important contributor not just to the creative economy of the UK but to the economy full-stop.  None of that is going to change.  There may be some short-term adjustments, forced by the necessity of an economic malaise, and there may be acceleration in longer-term trends but either in a post-Brexit world or despite a post-Brexit world, the industry will thrive.