"Will the UK remain the pre-eminent advertising hub on the world stage?"
Report by Will Nicholson, Head of Content, IAA
The IAA is proud to be a member of the Debating Group, a group which has been holding debates in the House of Commons since 1975, bringing marketers, politicians, journalists and the public together to discuss the contentious political issues which surround marketing.
Co-sponsored by the IAA and the Advertising Association this very timely debate (which was meant to coincide with initial date for leaving the EU), took place in Committee 10 of the House of Commons and was chaired by Ian Lucas, MP for Wrexham.
Steve Davies, Chief Executive of the Advertising Producers Association opened the motion for the Proposition claiming that despite Brexit, “The deep-seated advantages that the UK has in people, business infrastructure, creativity, competitiveness and London’s status as Europe’s only global mega city will prevail’. He stressed that UK advertising is valued highly by the world. Advertising service exports by the UK were £6.9 billion year for the year ending 31 December 2017 – up by 18% on the previous year – in the first full year after the Brexit vote – and nearly tripling in ten years – far ahead of other sector averages (8%).
He concluded, “We are in limbo at the moment, which is always the darkest point in a decision-making process. It is easy to say I shall leave if Brexit happens…but it so rarely happens in practice so as to be significant. They are emotive positions. The deep-seated advantages the UK has in people, business infrastructure, creativity, competitiveness and London’s status as Europe’s only global mega city will prevail”.
Seconding the motion, Sarah Jenkins, Chief Marketing Officer, Grey London, added that the UK advertising industry is a powerful, forward-thinking titan of talent, experience and success. However it’s not that UK advertising is simply too big to fail, it is critically too creative to fall.
She argued the industry is powered by creative people, which creates a very special momentum. 190,000 people working in the UK advertising and marketing industry, naturally thinking out of the box, looking outwards and being adaptive is a dynamic and unstoppable force.
Sarah summed up that despite Brexit UK advertising shall not just survive but that it has the talent, momentum, and critically, the creativity to thrive.
Opposing the motion, Matthew Bloxham, Head of EMEA Media, Technology and Telecom Research, Bloomberg Intelligence, opened his speech by quoting his ultimate boss, Michael Bloomberg “In God we trust. Everyone else brings data”. Matthew suggested it could serve the debate well to remind ourselves that probably everybody in Committee Room 10 wanted the UK advertising industry’s future to be one of pre-eminence in a highly competitive global market, but that they must put their emotions to one side.
According to figures from the Advertising Association, about 14% of the industry’s workforce comes from the EU, more than twice the national average. These employees have been invaluable to the UK’s industry’s ability to present itself to the world as a creative powerhouse and are already starting to turn their backs on the chaos.
Matthew argued that the £6.9 billion of exports in 2017 quoted by Steve Davies, was unquestionably helped by the weak pound, but it was a backward-looking number – a snapshot of the industry’s past glories. The reality is that to figures from ONS, business investment shrank in every quarter of 2018 and was 0.9% lower for the year as a whole. With less investment, growth is unquestionably going to slow and the full effects of Brexit will not be clear until we actually leave, and how we leave.
However slower growth will make the UK a less attractive place to do business and as a place to live and work for our colleagues from the EU. It also means there will be less money to spend on marketing, weakening investment in the industry and triggering a negative cycle for talent retention and the investment that the holding companies are prepared to put into the UK market.
The data tells us that the UK’s position of pre-eminence is already under threat and that the forces of change are conspiring to help our rivals mount a successful coup. In a post-Brexit world the UK advertising industry will be nothing more than a second-tier market on the global stage.
Many new businesses that chose the UK as their European hub are having a rethink, some by force, and others by choice. And now they are starting to implement contingency plans they hoped they would not need. These businesses are expanding existing or opening new branches in Dublin, Paris, Frankfurt or Amsterdam..
Seconding the opposition, Sarah Taylor, Client Partner, Finch Factor, took on the debating baton from Matthew and argued that not only have we lacked pre-eminence since the Referendum result, we have been losing dominance for far longer.
Having lived in Amsterdam for 14 years and worked within its growing creative industry, she has witnessed first-hand how the Dutch have capitalised on the UK’s waning dominance .
We have been patting ourselves on our backs for perceived dominance for the past ten years and navel-gazing for the past four. We have paid no attention as countries like The Netherlands have been upskilling, upselling and out-bidding us. Corporate incentives have seen the likes of Nike, PVH (Calvin Klein and Tommy Hilfiger), Unilever, Diageo, Danone and Netflix, establish their European headquarters in The Netherlands. Not in response to Brexit, but in response to a sustained strategic growth plan over the course of the past years by the Dutch Government.
She summed up that the UK is not entitled to pre-eminence just because we once had it. If we think that a post-Brexit world is one in which the UK advertising prospers, we have intrinsically misunderstood what drives our industry in the first place – creativity, connectivity and diversity.
THE MOTION WAS DEFEATED.