How Brexit Is Impacting the Advertising Industry in the UK

How Brexit Is Impacting the Advertising Industry in the UK

May 04, 2018 | Marketing Blogs

The impact of Brexit will be felt by many employed in the U.K. It was on June 23, 2016, when 52 percent of the 73 percent participating U.K. electorate voted to leave the EU for good. Now, with the U.K. preparing to leave the bloc, there are skill shortages in many sectors of the economy. One such sector that will face a major talent crunch is the advertising industry. According to the U.K. Advertising Association, about 36 percent of the clientele in the industry — which accounts for 40 percent of the revenue — does not belong to the U.K. It is also important to note half of the workforce in London’s advertising industry comes from overseas.

How Agencies Are Handling the Situation

As of now, the creative industry is one of the fastest growing sectors, accounting for $106 billion of the U.K. economy. The creative crown of the ad world is in jeopardy, as 15 percent of the U.K.’s talent in the design & creative industry comes from outside the U.K. The current situation is expected to result in a gain for some and a loss for others. Countries like the Netherlands and France are grabbing the opportunity with both hands. Amsterdam, for example, is freeing up 30 percent of its salary tax for the creative talent flowing out of the U.K. Amid the ongoing situation, the U.K. Advertising Association along with the Department for International Trade (DIT) has launched a campaign — Promote UK — to endorse British advertising around the world. The campaign aims to secure more international work and spread awareness on the U.K.’s advertising industry, thus targeting key influencers and decision makers. The campaign will also test new markets and reach out to new clients globally. Promote UK’s objective is to ensure that marketing services are encompassed in FDI pitch presentations across all sectors by the DIT. Promote UK has identified eight priority markets: North America, China, India, Japan, the Middle East, Germany, France and Hong Kong. The campaign will likely have an active presence at international industry events, including Cannes Lions, dmexco and the World Retail Congress. Going forward, it is also expected to help tackle the talent crunch faced by the U.K. advertising industry.

Meanwhile, marketing agencies are also taking baby steps to handle the situation. Y&R, Karmarama, Grey, Mindshare, McCann, M&C Saatchi, Ogilvy, Framestore, DDB, etc. are some of the suppliers that have supported the Promote UK campaign. The agencies with the Advertising Association are planning to urge the government to support the industry by easing immigration rules post Brexit. Adam & Eve, the agency of the DDB group, has created ads portraying a number of international executives who work in the U.K. advertising industry. Superimpose Studio, an East London-based creative agency, has rolled out a digital outdoor campaign to stimulate opponents of Brexit to act on it.

In March 2018, in a move to offset the uncertainty post Brexit, Total Media entered into a joint venture with Mediaplus in Germany. The newly formed organization, named Total Mediaplus, will have hubs in London and Munich. The British agency believes it is necessary to take this measure in order to maintain the clientele and talent pool. The decline of the sterling against the dollar has also acted as a trigger for mergers and acquisitions (M&As) taking place in the industry. Going forward, the ad industry in the U.K. is expected to see many more M&As. With agencies wanting to continue the influx of business and retain talent, the move is imperative.

It is the best and the worst of times for the British ad industry. The marketers need to keep a close tab on the current situation and act judiciously to benefit from Brexit.


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