Brexit means Brexit; it’s neither black nor white, hard or soft, red, white or blue.
We’re leaving the Single Market and possibly the Customs Union; disowning the ECJ, but keeping EU laws for now. The final deal will be presented to parliament, and we can all get on with our lives.
For Adland, the news should be welcome – finally some clarity from the government. Yet still the doomsayers say doom, despite contrary evidence.
The IPA Bellwether report for the fourth quarter last year, released last week, shows an aggregate of marketers dismissed the uncertainty and raised their budgets as the year ended. National ad spend is forecast to rise 2.1 per cent overall in 2016, up from the third quarter estimate of 1.9 per cent.
The Brexit Effect we were told was inevitable never happened. Yet, unchanged from the same period, the Bellwether report forecasts that ad spend will fall 0.7 per cent in 2017 due to uncertainty over negotiations. Now is not the time to delay investment.
There seems to have been a cognitive dissonance at play since the Brexit vote; the desire for a self-fulfilling prophecy where many in the media bubble, still seething at their loss, appear to almost want the worst, if only to say “I told you so.”
The UK has the fastest growing major economy, and the growth is consumer-led, which should be welcome news for advertisers. Consumers appear to be “entirely looking through Brexit-related uncertainties,” said Mark Carney last week.
So why can’t Adland?
In times of turmoil, economic or else, those who continue to invest come out the other side stronger. Don’t take my word for it. Stephen King, the advertising stalwart who invented account planning, published a pioneering study on advertising spend during a downturn (which we are not in, by the way). His conclusion: that businesses which cut advertising would be long-term losers.
“Businesses yielding to the natural inclination to cut spending in an effort to increase profits in a recession find that it doesn’t work,” he said.
It’s not quite zero sum; but if you stop investing, you risk giving away market share to someone who is. By increasing expenditure, which may reduce profits in the short term, brands can take advantage of others sheepishness, and increase their market share in the long term.
The worst of the Brexit uncertainty is over. Another report last week, from the World Federation of Advertisers, found that every euro spent on advertising brings a sevenfold return to GDP. It underpins economic success. It is vital for brands and advertisers to continue investing, if only for their own sake.
The Bellwether report is fallible. It was wrong about Brexit last year, and I’m willing to bet it will be wrong again this time next year.