Tories win the general election: adland reacts
Following an often dirty campaign, the Conservatives have won a comfortable majority in Parliament with Labour’s ‘red wall’ falling to pieces. Meanwhile, the pound has soared more than 2 per cent on the news. Here, a range of voices explain what the historic news means for the media and advertising sectors.
The early reaction today of the FTSE 250, +5%, tells you about the renewed investor appetite for UK domestic stocks.
Sterling is also now at 1.35 vs the dollar, a sharp recovery in valuation. This election outcome is a major positive short-term catalyst for media and tech – both key growth sectors of the UK economy and attractive to international investors. Brexit, for better or worse, is a done deal.
For at least a year from now on, we would expect a tsunami of fresh money to benefit UK media and tech, in terms of investment and enlarged capital expenditure and ad budgets. Agencies of all colours will do very well. UK advertising forecasts will be upgraded.
BT and other broadband suppliers will also be relieved. ITV and Sky – under Comcast – should fly. The BBC and possibly C4 will however be less satisfied, with revised funding models possibly on the cards. The probability of any sort of a tech or digital tax is now also much reduced. The US will increase its exposure to UK assets.
Advertising is and always has been about optimism. As long ago as 1759 Dr Johnson wrote: “Promise, large promise, is the soul of an advertisement.” Uncertainty and political paralysis is the enemy of marketing investment and so, regardless of political allegiances, the certainty that a large majority brings to the markets and business generally should prove beneficial.
However, the certainty that Brexit will happen doesn’t eliminate the considerable uncertainties about what our future trading relationship with Europe will be, so while the immediate impact of the election will very likely be positive for the marketing industries, there will need to be sustained investment to mitigate the predicted negative effects of leaving the EU.
With the clear mandate the Conservatives have won from the electorate we look forward to hearing more about the new Government’s programme for the country beyond Brexit and look forward to engaging in discussions about the future trade deal with the EU.
The UK is the European and global hub for the advertising industry, but this status is dependent on securing a good future trade deal with the EU, with a regulatory environment that enables the free flow of data and services across borders and a flexible, growth-friendly migration system that allows the UK to access the best global talent.
Beyond Brexit, we also look forward to hearing how economic growth and prosperity can be shared more widely across the country. Advertising has a unique ability to foster growth among businesses of all shapes and sizes and drives economic progress across the nations and regions.
It is also a key driver of export growth and is the fastest-growing of Britain’s services exports. As the new administration is assembled, we look forward to engaging with Ministers and with officials from across Whitehall to ensure UK advertising’s voice is heard loud and clear.
This general election should be seen as a massive warning to the ad industry overall. If there’s ever been an exercise in demonstrating how important it is that you have the capability to look beyond your own bubble this has to be it.
Couple that with a ruthless focus on a clear, repeatable and single message: like it or loathe it, this was the ‘get Brexit done’ election. You knew what you were voting for.
Following a turbulent few years for British politics, establishing a stable political backdrop to provide companies with regulatory certainty is essential to continued investment and innovation within the digital advertising industry.
Brexit is now firmly on the short-term agenda and securing a smooth exit that prioritises maintaining data flows between the UK and other countries, and minimises economic impact, is now a priority.
At the IAB, we have long been encouraging members to prepare for all eventualities when it comes to the UK’s departure from the EU and we will continue to support them in doing so.
The B-word aside, regulation is another key area where a consistent and coordinated approach is needed. We urge the new Government to take stock of the policy and regulatory landscape for digital advertising, and to draw together ongoing work by regulators into a coherent strategy that supports the industry as a whole, recognising the critical role that self and co-regulation play in such an innovative and fast-moving industry.
The UK’s ad tech sector employs over 19,000 workers and comprises more than 300 UK-headquartered companies, attracting more than £1 billion in investment since 2013. Over £13 billion was spent on digital advertising in 2018, including by UK small and medium sized businesses (SMEs). The Advertising Association’s research shows that more SMEs now advertise than ever (up from 30% in 2013 to 42% in 2017), taking advantage of the opportunities that digital advertising offers to reach consumers more effectively on a small budget.
The IAB looks forward to continuing to work closely with the incoming ministerial team at DCMS to ensure a sustainable future for digital advertising.
While politics has been divisive of late, the decision as to who will run our country has now been made.
For us to move forward – as a country and an industry – we are looking to the Tory Government to bring an end to the current stasis, uncertainty and economic deadlock. And one that can provide clarity across the board.
Specifically, for adland, we need clarity on Brexit so that clients can allocate appropriate marketing budgets to hire agencies to help transform their businesses; we need clarity on access to EU talent – our industry relies on diverse minds from all backgrounds; we need clarity on political advertising for which we continue to lobby for a machine-ready universal register of all political ads online.
We also need a Culture Secretary in the post long enough to gain a good understanding of the incredible value that the creative industries bring to the UK and who can promote and defend our best interests accordingly.
We welcome the new Prime Minister back to office and look forward to the appointment of a new Culture Secretary. This will be the ninth Culture Secretary since 2010.
It is vital, with challenges such as platform regulation, data ethics and regulatory efficacy that we see an end to the revolving door at DCMS and progress made in key areas.
ISBA has long called for a return to evidence-led regulation when it comes to the consideration of further advertising restrictions; for the creation of a new independent regulator for the social media platforms; and for government to provide long-term regulatory certainty through Brexit and beyond. With that, we can unleash the power of the sector, the third largest in our economy.