What Brexit vote means for adland – bad or worse

As British PM Theresa May waits to hear the verdict of Parliament on her proposed Brexit deal (they won’t like it) various forecasts are emerging about the likely fate of advertising in the event of various outcomes: no deal with the EU, a so-called “orderly withdrawal” and stay as we are (either via reversing Brexit through a second referendum or delaying the evil day – the equivalent of going for a lie down in a darkened room.)

The IPA releases its latest Bellwether report on Wednesday. While all the recent ones have shown likely growth (with a few jitters) this will be the first one to reflect marketers’ concerns as Brexit Day March 29 looms.

Droga5 for Ancestry

Enders Analysis has produced two models: it reckons that without a deal ad spend will decline three per cent this year to £22.54bn, a drop of nearly £1.4bn. TV will take the biggest hit, down nine per cent or around £500m. The last time ad spend went into reverse was following the financial crisis in 2009.

In the event of some sort of deal being struck (with or without May) it reckons ad spend will continue to grow this year, by 2.7 per cent to £23.9bn (down from last year’s 4.7 per cent growth.)

Most forecasters seem to think that so-called main media – TV, national press, billboards – will take the biggest hit as advertisers switch to short term sales promotions. Even digital, which has hoovered up most of the new money coming into the market, is showing signs of a slowdown in the UK.

So a no deal outcome will be bad news for adland although not nearly as bad as it will be for the likes of retailers and car companies – dependent on cross-Channel supply lines – and the travel and hospitality industry. It’s still more likely that there will be some sort of deal or at least a delay as the EU and its bureaucrats belatedly wake up to the damage Brexit will do to their industries, trying to cope with trade wars and a sharp slowdown in China.

But it’s hardly a reassuring outlook, whichever way things go. Particular for those premium suppliers of main media, ad and media agencies.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.