Gasps could be heard in most households and newsrooms last night when the result of the exit poll was announced. While opinion polls in the run-up to the general election had suggested a Conservative majority was likely, few expected the scale of the win.
With one seat still to be declared, the Conservatives have 364 seats, up 47, while Labour has fallen to 203 (down 59). That gives the Conservatives a majority of at least 78 and control over the House of Commons.
While the result may have surprised many, it does offer clarity on the issue of Brexit that will enable brands and marketers to better plan their strategies and budgets for 2020 and beyond.
Eve Sleep CMO Cheryl Calverley says: “Whatever we may think of the result, at least it was a firm result. And, generally speaking, a firm result is better for consumer confidence and the economy than the stand-off we’ve had for the past two years.”
That is a sentiment shared by many industry organisations. The IPA hopes the Tory Government can “bring an end to the current stasis, uncertainty and economic deadlock”, while the Advertising Association says it is “looking forward to hearing more about the new government’s programme for the country beyond Brexit”.
Markets, too, have reacted strongly. Sterling was up 1.9% against the Dollar this morning, its highest level since May 2018, and was up to a three-and-a-half year high against the Euro.
On the stock market, the FTSE 100 share index rose 1.5%, while the FTSE 250 was up 4%, hitting record highs. The hope now is that consumer confidence might improve too and have a positive impact for brands and marketers.
“My hope now the election result is known, and as we look into 2020, is that consumer confidence begins to return. And that means that decisions not made or deferred can move forwards, and that for many companies the year ahead is one where strong brands who appeal to a renewed sense of consumer confidence succeed,” says TSB CMO Pete Markey.
Despite the landslide victory, questions and concerns still remain. Prime minister Boris Johnson in his speech outside Downing Street this morning called Brexit the “irrefutable, irresistible, unarguable decision of the British people”. He also promised those who had voted Conservative in traditional Labour seats that he would “not let you down”.
That makes the UK’s departure from the EU, under the deal that Johnson agreed with the bloc, a certainty by the end of January. A second reading of the deal is expected before Christmas and it is likely to pass with the Conservatives no longer reliant on the support of the Democratic Unionist Party or the European Research Group, an arm of the Tories in favour of a hard Brexit.
In the short term, this result is (painful as we might find it) helpful for marketers and business.
Cheryl Calverley, Eve Sleep
However, beyond that certainty questions remain. The nature of the future trade deal with the EU is the most obvious, as are any trade deals the UK may then want to do with other countries globally.
“Clearly the next thing on most businesses mind is Brexit and the nature of the deal that we may exit with and the resultant speed with which we renegotiate terms,” says Calverley.
“In the short term, this result is (painful as we might find it) helpful for marketers and business. In the long term, it’s difficult to say as we face more potential economic unrest with Scottish separatism and as yet unknown trading arrangements internationally.”
Up for negotiation are the free flow of data and services to the UK, and the nature of the migration system post-Brexit. However, with no deal now looking unlikely it is hoped a sensible agreement can be reached to ensure the marketing industry can attract the talent it needs and continue to trade with EU countries.
Advertising Association CEO Stephen Woodford says: “The UK is the European and global hub for the advertising industry, but this status is dependent on securing a good future trade deal with the EU, with a regulatory environment that enables the free flow of data and services across borders and a flexible, growth-friendly migration system that allows the UK to access the best global talent.”
Issues for the marketing industry
The marketing industry is also keenly interested in what the Conservative party is planning beyond Brexit to boost the economy across the country.
Woodford adds: “We look forward to hearing how economic growth and prosperity can be shared more widely across the country. Advertising has a unique ability to foster growth among businesses of all shapes and sizes and drives economic progress across the nations and regions.”
More specific to the marketing industry is the need for a longer-term culture secretary. There have been eight since 2010 with a ninth incoming following Nicky Morgan’s decision not to stand in this election.
IPA director general Paul Bainsfair says: “We need a culture secretary in the post long enough to gain a good understanding of the incredible value that the creative industries bring to the UK and who can promote and defend our best interests accordingly.”
That is also important as challenges in the ad industry need addressing. In particular, issues around data, advertising regulation – particularly in areas such as gambling and junk food, and regulation of digital platforms.
ISBA director general Phil Smith adds: “ISBA has long called for a return to evidence-led regulation when it comes to the consideration of further advertising restrictions; for the creation of a new independent regulator for the social media platforms; and for government to provide long-term regulatory certainty through Brexit and beyond.
“With that, we can unleash the power of the sector, the third-largest in our economy.”