As a leadership contest in the ruling Conservative Party brings fresh upheaval to the UK, the continuing uncertainty around Brexit is making itself felt in more ways than one.
The headline figures suggest the Brexit process, which has been going on since June 2016, has had no significant material impact on advertising. UK adspend is forecast to grow by 4.8% in 2019, according to the most recent Advertising Association/Warc expenditure report – with this figure having increased from the 3.8% growth forecast a year earlier.
The most recent IPA Bellwether Report, meanwhile, suggested that marketing budgets were bouncing back after uncertainty at the start of 2019, with a net balance of 8.7% of marketers saying their budgets had increased – the highest for almost two years.
Despite this, marketers presented a downbeat outlook in the Bellwether, with a net balance of -2.7% saying they were optimistic about the prospects of their business – a measure that has fallen from around +10% since mid-2018.
Nigel Vaz, IPA president and global chief executive of Publicis Sapient, said this reflected the uncertainty facing business.
While a "no deal" exit from the European Union – regarded by most business leaders as a dangerous route – seemed to be ruled out under outgoing prime minister Theresa May, Boris Johnson, the favourite to replace her, has made it clear he would be willing to let it happen to ensure the UK leaves the EU in October, as is currently scheduled.
Vaz also pointed to the UK’s ability to attract global talent. He said that while the UK’s cultural reputation would continue to attract talent in the short term, "we could find ourselves in a challenging situation down the road" if Brexit changes the image of the country as welcoming and open for business.
James Murphy, the recently departed founder of Adam & Eve/DDB and former chairman of the AA, warned that "there are definitely signs that there is less of a pool of international talent available in London". Many EU nationals that would previously have committed to a future in the UK were choosing to return home, he said.
While he said it was "difficult for other major cities to offer quite as much as London does", Amsterdam in particular is making a serious effort to establish itself as an alternative "English-speaking hub" for advertising professionals deterred by Brexit.