Why Brexit is dividing the advertising industry

12 Mar 2018  |  Fredrik Borestrom 
Why Brexit is dividing the advertising industry

A recent debate with senior industry names asked if Brexit is the biggest challenge UK advertising has ever faced. Here, Fredrik Borestrom reports back on the arguments

Advertising in the UK is thriving with spend of £21 billion annually - but could Brexit bring this prosperity to an end?

This was the crux of the motion posed to industry titans by the International Advertising Association (IAA). Gathering in the House of Commons, leading figures argued the burning question: is Brexit the biggest challenge UK advertising has ever faced?

Making the case for Brexit as an unprecedented hurdle were James Murphy, adam&eveDDB founder and CEO, and Karen Blackett OBE, Chairwoman at MediaCom UK & Ireland and WPP UK Country Manager. Heading up the opposition were Rory Sutherland, Vice Chairman of the Ogilvy Group UK, and ID Comms’ Chairman, John Billett.

The two sides covered several hot topics in the far-reaching debate, from market positioning to measuring success as they wrestled with the motion. Here are some of the highlights:

1. Maintaining economic stability

Financial security is a key Brexit issue, so it’s only logical that the conversation swiftly settled on trade. According to Murphy, the industry owes its buoyancy to the UK’s position as the “pivot point between Europe, the Americas and the rest of the world”, which will be altered by separation.

Focusing on the UK’s export business - worth £4.3 billion, with 70% of produce EU bound — Murphy argued that the value of new business deals wouldn’t equal the Brexit benefits.

The opposition, however, responded to these claims with an assertion that the UK would stand firm and hold on to its vibrant economy. Drawing attention to our infamous national spirit of resilience that has weathered many previous storms, Sutherland contended that advertising would not only survive, but also flourish outside the EU by taking advantage of new opportunities.

Moreover, the UK’s ability to produce world-class advertising would endure too: becoming an asset leading the economy, rather than leaving it to rely on artificial trade advantages.

2. Keeping talent standards high

The UK’s doors have always been open to diverse talent and this has made its advertising sector a magnet for innovators and creative minds. But Murphy warned that cutting ties with the EU could disrupt the “virtuous cycle” of talent begetting talent, which attracts business.

ONS research shows UK recruiters are struggling despite record levels of available roles, and Murphy voiced concerns that large businesses will start relocating to Europe where desirable talent is more plentiful.

For Sutherland, however, this anxiety appears unfounded. Stating that the appeal of cities such as London lies in their cosmopolitan nature, not just European connections, he proclaimed the UK would remain a bastion of advertising capability.

3. Tougher issues at hand

Brexit is an unprecedented situation, and from Sutherland’s point of view, this confusion is why the industry should focus its attention instead on issues it can resolve. At the top of his list was the problem of procurement agencies incentivising creative groups to “work cheaper, not better”.

Billet similarly declared “unacceptably poor” digital measurement is reducing advertising value. He added the risks to revenue of ad blocking, editorial expenses, and subscriptions far outweigh those of Brexit.

From across the room, Blackett reasoned the apparent intangibility of Brexit makes it no less of a challenge. While she agreed worries about brand safety, fraud, viewability and transparency are significant, the industry is already taking steps to address them.

For her, Brexit is an “unquantifiable” hazard. Citing the fall in consumer confidence after the referendum - which dropped in 2017 from -7 in January to -14 in December - Blackett contended Brexit has already undermined the foundation of advertising success: trust between brands and audiences.

She also proposed the slimming of marketing budgets could be due to ambiguity around Brexit: with marketers tightening belts in a bid to deliver results in an uncertain climate.

After an insightful and intelligent debate, the final ballot was weighted by a strong margin of 56 to 37 disagreeing that Brexit is the biggest advertising challenge facing us thus far.

However throughout the discussion, it was evident that Brexit is a significant concern - even if the room couldn’t quite agree it is the biggest threat we have ever faced - after all, we have survived periods of economic and political trial before.

And for those at the vanguard, there are several other pressing threats to industry prosperity that also need addressing, regardless of Britain leaving the EU.

Of course, this in no way means Brexit should be ignored - far from it. Everyone agreed that exiting the EU will transform the UK’s advertising landscape, and now we need to focus on ensuring this change is for the better.

We must work together to build informed strategies and protect advertising quality and success, so the industry can secure a bright future on the other side of Brexit - irrespective of whether it is, or isn’t, the biggest challenge we have yet to face.

Fredrik Borestrom is president, IAA UK Chapter


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14 Dec 2018 

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