In light of Government plans to take the UK out of the single market, marketers have been urged to invest in talent and ensure their voices are heard ahead of the Brexit negotiations.
Prime Minister Theresa May said in her Brexit speech last week that she is planning to take the UK out of the single market, prioritising “control” over migration between the UK and the EU.
While a Supreme Court ruling yesterday (24 January) means that parliament must vote on whether the government can start the Brexit process, May has made it clear what she thinks will be a good deal for the UK.
Any agreement with the EU must “allow for the freest possible trade in goods and services”, May said. “I want to be clear: what I am proposing cannot mean membership of the single market. It would, to all intents and purposes, mean not leaving the EU at all. That is why both sides in the referendum campaign made it clear that a vote to leave the EU would be a vote to leave the single market.”
Leaving the single market could lead to businesses to facing higher costs, more expensive products and narrow their reach. The pressure on the pound from Britain’s vote to leave the EU is already stoking inflation, according to the Guardian.
But advertising so far has proved resilient, with figures from the Advertising Association (AA) showing that ad spend grew 4.2% in the third quarter of 2016 – defying uncertainty caused by the EU referendum.
However, a survey about Brexit by Credos of 200 advertising businesses shows a fifth of advertisers (22%) reporting lost business or contracts since the vote, and six out of 10 respondents (62%) saying the decision had negatively affected the outlook for their businesses.
We have to look ahead, decide what we want to stand for and make sure we can prove this by delivering value for people, communities and the people that work for us.
Keith Moor, Santander
Santander’s CMO Keith Moor admits ongoing pressure on marketing budgets will remain, and that he has not spoken to “any marketer in the last six months” who hasn’t felt that burden. As a result, it is incumbent on marketers to prove to their business that they are “an investment and not a cost” and to ensure brands have clearly defined their values.
“At the moment there are signs of rising inflation and brands are still waiting to see what’s going to happen. We can’t respond to small fluctuations in the mentality of the public. We have to look ahead, decide what we want to stand for and make sure we can prove this by delivering value for people, communities and the people that work for us,” he adds.
Ensuring advertising’s priorities are heard
One of the main priorities for the ad industry should be in ensuring its priorities are heard by the Government. May’s new modern industrial strategy specifically calls out the creative industries as an area that could benefit from ‘new sector deals’. While this is a “major step forward”, according to the Creative Industries Federation, the ad industry must ensure the government “reflects its needs”.
“The Prime Minister’s speech highlights the government’s determination to get Brexit right for business, and advertising must work hard to get its priorities heard; staying attractive to global talent, good trade relations with Europe and lifting unnecessary red tape. Our value is clear and the negotiations are an opportunity to position advertising’s role as the UK’s industrial strategy evolves,” says Ian Barber, communications director at the AA.
Chris Daly, chief executive at the Chartered Institute of Marketing, believes marketing teams should use their agility, flexibility and adaptability to steer their businesses’ post-Brexit strategy as it unfolds.
“If Britain is ‘open for business’ and markets more competitive, then we could see brands emerging in a bolder and more aggressive manner over the next few months,” he says.
“We strongly urge marketers to continue doing what they do best: championing customer engagement and driving business growth.”
Marketers who are feeling insecure about the potential business impact of the Brexit outcome would be wise to sketch out four to five Brexit scenarios, says marketing leadership expert Thomas Barta.
They can range from “as is” to “extreme”, which might include closed markets, talent restrictions or currency wars. For all scenarios, marketers should use two lenses, looking at how the brand could best serve its customer’s profitably and how it could retain the best marketing talent.
He concludes: “Under uncertainty, no scenario will give marketers the perfect answer. But understanding your options will speed up the strategic decisions once we know what Brexit really holds.”