Now that the dust has settled slightly on last week’s in/out referendum results we take a look at what Brexit will mean for brands and advertisers.

 

Uncertainty…

 

…is the overriding feeling across the advertising industry. And no wonder. A CIM study revealed that 62% of marketers didn’t feel confident in their understanding of how Brexit would affect their business. And that’s not through lack of trying. The truth is no one knows. And it’s that fear, that uncertainty, that’s really rocked the adland boat.

 

Sir Martin Sorrell, Chief Exec of WPP, summed this up when he addressed the media at Cannes on Friday: “I am very disappointed, but the electorate has spoken. The resulting uncertainty, which will be considerable, will obviously slow decision-making and deter activity. This is not good news, to say the least. However, we must deploy that stiff upper lip and make the best of it. Four of WPP’s top ten markets are in Western Continental Europe and we must build our presence there even further. It just underlines the importance of implementing our strategy: fast-growth markets (BRICs and Next 11), digital, data – and horizontality, which ironically means getting our people to work together, not apart!”.

 

As the stock market tumbles, five of the six largest ad groups suffer – with WPP and Dentsu suffering some of the steepest drops. And predictions from Zenith’s Head of Forecasting suggest Brexit could result in £1bn growth reduction by 2030. Against talk of a looming recession, consumers will be tempted to start tugging at the purse strings. And brands, of course, will react by being financially cautious. Advertising spend will drop and adland will suffer.

 

What should’ve been a day of celebration as Cannes 2016 came to a close, was instead spent assessing growth plans and reassuring clients. “I’ve already had clients from big corporates emailing and texting me, worried about whether to invest in the UK,” admitted Johnny Hornby, founder of The&Partnership on a panel in Cannes. He warned “this is completely uncharted territory”, adding that “every sensible view said this would be a terrible thing”.

 

Elsewhere, leaders at Havas, an organisation that was founded in France, put forward a reassuring message. Before the announcement was made, Global Chief, Yannick Bollore tweeted: “Dear British friends, Whatever the result of the vote tonight, the UK will remain at the forefront of our Havas European Family! #Brexit”. This was followed up by Paul Frampton, the CEO of Havas Media Group UK & Ireland, who stated that “The Leave vote will not change Havas’ investment in the UK. We are opening a brand new HQ in London in early 2017 in King’s Cross and have just opened premises in Manchester. The development in King’s Cross connects us more easily to Manchester and to Europe via the Eurostar and that remains an important connection for us despite the Leave vote.”

 

What we think this means

 

Now we’ve had the weekend to let this sink in, we’re sharing the uncertainty felt by the wider advertising industry. However, we remain confident that the best way for brands to continue connecting with their customers is to open their ears, eyes and minds to what it is the customers want. If there’s ever been a time for brands to champion their values of honesty, confidence and integrity, it is now.

 

It was this quote from the CEO of Brothers & Sisters, Matthew Charlton, that most struck a chord with us:

 

“It’s easy for everyone in advertising living in London, whilst devouring the Guardian every day, to think this is a shock. In reality it shows how careful we all need to be as an industry to not live in our micro bubble, full of hipsters and craft beer drinkers.

 

We cannot dismiss the will of the majority of the country as idiotic because they voted for something that appears opposite to our values. We have to take heed and realise that the ways and view of people we make work for can be significantly different to the industry echo chamber.

 

Never has there been a bigger warning to us to stop making ads for ourselves, awarding ads that we all like, and that we need to develop a wider taste of what’s good and what works for real people who our clients pay us to connect with and understand.”

 

By Angharad Edwards

 

References

 

The Drum – As the UK prepares for Brexit, the nation’s advertising industry moves into uncharted territory

Mediatel – Brexit: Media industry reactions // adspend analysis

The Drum – Sir Martin Sorrell ‘disappointed’ as Britain votes to Leave European Union