Why British ad agencies fear leaving the European Union

As the campaigning for the EU referendum gains momentum, ad executives are getting nervous.

On June 23, the U.K. will vote on whether it will leave the European Union. The vote has a cute name — “Brexit,” a contraction of British Exit — but challenging implications. While Britain’s departure from the union would mean the trading of goods and the movement of people between the U.K. and Europe will become more complicated, it will also lead to other challenges for the advertising community.

“From WPP’s point of view, we’d lose influence in four of our top 10 markets: Germany, France, Italy and Spain,” announced Sir Martin Sorrell on stage at Advertising Week, Europe, in London. “I know clients will close plants; I know that jobs will go. The question is how long that will happen for.” Sorrell, who enjoys nothing more than holding forth on global affairs, is not alone

“If Brexit happens it will be a real problem for us,” agrees Stuart Bowden, global chief strategy officer at media agency MEC. “There will be a stand-still period where technical issues are worked out, clients try and understand the implications for supply chains, international plants, rise in import and export fees, compliant and regulatory pressures. Media spend is then switched off very quickly, and then it’s hard to get back. It’s recession-like; money goes away, and then we have to make the case for it again.”

Public opinion polls show a roughly evenly split between leaving the EU and remaining, although polls aren’t always the best indicator of the public’s sentiment. The argument for leaving would, they say, unshackle Britain from an outdated and failed super-state project. On the other side, people fear this independence and potential isolation crosses the line from confidence to arrogance and harkens back to a forgotten era of colonialism.

The world of advertising is overwhelmingly in favor of staying in the Union, as shown in the ad hoc poll of attendees during a Brexit session at Advertising Week.

A snapshot of how the ad industry is voting in the referendum

Another cause for concern is the mobility of talent in the industry. “It won’t be any easier for us to hire talent from Europe,” said Mark Syal, joint managing director of Essence. Indeed, at agency Maxus, 20 percent of U.K. colleagues are from outside the U.K. Agency CEO Lindsay Pattison told Digiday that Brexit “is concerning our people because our employees are motivated to travel around and experience new things. The U.K. is an attractive place to come and work.”

But what makes this particularly difficult to debate is that no one knows for certain how things will play out in the real world. Both sides of the debate agree splitting will lead to short-term pain, upheaval and uncertainty, breeding caution and potentially a lack of investment. The advice from management consultant firms and financial services, according to Pattison, is that not much can be done in advance, and it will take several years of negotiations to reach an agreement on trading.

As such, it’s business as usual at Havas, said CEO Paul Frampton. “There’s a lot of rumor milling and concern around paranoia,” he told Digiday. “There is no evidence suggesting there are benefits to leaving, but there are risks, I can only go on the weight of evidence is more on one side.” Concerned clients haven’t approached Frampton yet, but that doesn’t mean they won’t. He still recognizes that the uncertainty creates confusion, “which creates concern and inertia.”

So the idea is to move — and invest — now, before it’s too late, said Frampton. “Not to invest in new talent, capabilities and methodologies seems a defeatist position.”


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