UK advertising spending grew 4.2% during Q3 2016, defeating predictions that the EU referendum may have hampered its growth. That’s according to new data from advertising expenditure source AA/Warc Expenditure Report released last week.
Ad spend data can be a good indication of business and consumer confidence in the UK and highlights the advertising business’ link to GDP growth.
According to data from Credos and Deloitte, advertising contributed £120.4 billion to GDP in 2015 supporting 550,000 jobs.
Based on a survey among 200 advertising businesses on Brexit, 22% of respondents said they had lost business or contracts since the vote whilst six out of ten respondents (62%) admitted that the decision had negatively affected their business outlook.
However, there are signs of improvement in confidence. Indeed, almost a quarter (23%) believe that Brexit may be an opportunity to expand and 8% have increased their investments in the UK.
For example, agency The&Partnership recently won the Toyota pan-European ad account worth £1.2bn over five years.
Johnny Hornby, Chief Executive, The&Partnership, said:
“Brexit isn’t the only major shift affecting our industry; the growth of programmatic marketing is also fundamentally changing the game for advertisers and agencies around the world. As an established global creative hub with both very strong creative and technology credentials, the UK should, with the right government support, be able to make the most of a lot of opportunities, both in Europe and internationally.”
The Advertising Association has also begun to provide UK advertising priorities for Brexit ahead of its industry summit.
- Safeguard the UK’s competitive position as an important global and European hub for advertising and media businesses
- Establish a workable and effective EU and global immigration policy to help UK advertising to continue to attract global talent, and address the skills shortage through education policy
- Negotiate the UK’s position on various media and advertising-related EU rules and ensure as much market access as possible, through equivalence in UK law
- Adopt a non-interventionist domestic regulatory approach to the advertising industry to provide market certainty and advertiser confidence and support its advertising self-regulation system through the ASA
- In the longer term, consider what EU rules constitute red tape to be lifted after the UK has left the EU
For Stephen Woodford, CEO of the Advertising Association it’s clear that advertising expenditure is not just a signal for broader economic growth, “but as a driver of jobs and GDP growth, so negotiating the best possible terms for UK advertising should be a priority as Government engineers our exit from the EU.”