WILL BREXIT HAVE AN AFFECT ON THE MARKETING INDUSTRY?
The honest answer to this is nobody knows. However, the few things we can do are… look at statistics, speculations and how the markets have already reacted. Reacted straight after the referendum and in the past critical economical events.
An insight into the past…
The IAB UK, pointed out that “the most recent comparable situation to Brexit was the recession caused by the 2008 credit crunch, when digital advertising still grew 5.7% year on year.”
It can be argued that a rise in digital spending is likely to take place due to the fact that leaving the EU means UK businesses will need to increase their advertising budget overseas, and digital is one of the easiest ways to do so. It isa fast and a cost effectively process. However, due to uncertainty and yet to be agreed regulations with other EU member states, some business owners may disagree.
The topic of uncertainty and scarcity
Uncertainty and disappointment are huge topics not only amongst the people living in the UK, but also individuals outside the UK. This has widely spread especially on social media when individuals started to share their shocked and frustrated thoughts with the result on platforms such as Facebook, Twitter and LinkedIn. How is this affecting the marketing industry? Anant Joshi makes an interesting point by suggesting:
The uncertainly caused by the decision means people are less likely to make big decisions, or take much longer to make them, so ad budgets will inevitably take a hit in the short to medium term.”
At a time full of uncertainty, many business owners will hesitate or think twice about their marketing budget for outside the UK.They may hesitate to try and reach new clients in other countries due to future regulations and trade agreements between EU countries. The market is likely to slow down until the government starts to make decisions, which may take a good few years.
Anant Joshi further makes a valid point suggesting “ It’s also worth pointing out that any companies whose financial spending power is based on the pound, will have less to spend in the Eurozone due to the fall in the exchange rates causing a weaker pound”. This with no doubt weakens the ability to reach new and existing clients in other countries, as although a business marketing budget may not have decreased, the fall in the value of the pound creates an impact.
According to the Drum, 2 of the largest AD companies suffered some of the steepest drops, WPP (5 per cent) and Dentsu (13 per cent). The question we should ask ourselves and the government is how do we now grow in this isolated country?
Carolyn Fairbairn, CBI director however suggests, “Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt”. Although, there is a lot of uncertainty and scarcity, lets remember that it is only temporary and the problems are always solved one way or another.
How do you think Brexit may affect the marketing industry or any other market within the UK? Please share your thoughts and views below 🙂 .