Politicians and "Project Fear" have been blamed for reduced spending in the UK’s advertising market.
GroupM, part of Sir Martin Sorrell’s WPP, has reduced its forecast for adspending growth in 2016 from 7.2 per cent to 6.3 per cent.
The TV industry and national newspapers have been worst hit in the forecasts. The former is expected to grow by 2.6 per cent, down from a November forecast of 7.1 per cent. And national newsbrand adspending is expected to shrink by 12 per cent, down from a forecast reduction of six per cent.
GroupM’s report said the advertising market has suffered since February, when the government announced the EU referendum would be held in June.
The report did however also note that to blame the Brexit vote alone would be “disingenuous”, pointing to other economic problems such as slowing wage growth, weakening demand for exports and the introduction of new Living Wage costs for business.
The report said: “It was to this mixture No. 10 saw fit to add ‘Project Fear’ to undermine confidence at every opportunity. What we may well be witnessing therefore is a cyclical wobble made worse by politicians.”
Adam Smith, futures director at GroupM, told City A.M. the “conduct of the debate... seems to have been calculated to deter investment”.
He said: “The Remain campaign has … had an economic focus and that this has been a target of somewhat sensational argument.”
Smith said he believes advertising spending has been deferred in the run-up to the result. In the event of a Brexit, which he said would “probably be negative in the short term”, this spending could be cancelled altogether. If Remain wins the vote, he expects advertising spending to be “flat to possibly up”.
But longer term, Smith does not expect the vote to have much of an impact on adspending in the UK. He added: “I find the argument for economic Armageddon unconvincing.”
Earlier this month, research from Zenith suggested Brexit would have no immediate effect on adspend. But it claimed that Brexit could cost the UK £70m in adspend growth a year, totalling around £1bn by 2030.
This figure is based on controversial Treasury research claiming that the UK’s GDP would be 6.2 per cent lower than otherwise expected in the event of a Brexit vote. The Treasury analysis was condemned as “absurd” by the Vote Leave campaign.