Post-Brexit Britain and the future of marketing
From budgets and creativity to the future of ‘brand Britain’, what might the marketing industry look like once the UK leaves the EU?
In June 2016 a big black cloud parked its backside over the UK and started pouring uncertainty all over the country.
It’s been raining for almost three years now and days of certainty are but a distant memory on a turbulent wind. Will they, won’t they? Deal or no-deal? Hard or soft? Now, we’re heading for ‘meaningful vote’ number who-knows-what because it seems no one knows what they’re doing and MPs have nothing better to do than shout and wave their hands.
If we can agree on one thing, though, it’s that Britain’s exit from the EU has turned out to be one of the biggest shambles in British history. And the chaos and confusion of Brexit is of course being felt far beyond the walls of Westminster.
In the marketing world, there are obvious questions around the economy and trade – each of which will have varying short- and long-term impacts.
Will marketers tighten their purse strings? What will be the impact on imports and exports? Will consumers have to pay more for goods?
Then there are questions around how brands are thinking about creative and whether in a post-Brexit world efficiency will take precedence over effectiveness. Will ‘brand Britain’ be damaged beyond repair and see the UK lose its influence on the global advertising stage?
As has been the case for the past three years, we can only speculate and throw guesses as to what impact Brexit – in whatever form it eventually comes – will have on the UK as a whole and on the marketing sector.
Most brands are, understandably, keeping tight-lipped on their Brexit strategies. But some have hinted at the direction in which they might travel. There are some numbers, too, to help us along the way.
So let’s take what we know to date and throw some darts at Britain’s Big Brexit Board of WTF and see what we can make sense of so far.
Budget and creative
Six years of growth in UK marketing budgets came to an end in the final quarter of 2018, according to the IPA’s long-running Bellwether report. Marketers are losing confidence in the British economy and pulling back spend. Marketing is also an easy budget to cut, so this will likely continue in 2019 and beyond.
“Uncertainty has proven to be a harmful side-effect of the UK’s recent Brexit negotiation process, breeding indecisiveness among UK businesses and denting consumer confidence,” says Joseph Hayes, an economist at HIS Markit and author of the Bellwether.
“With still no sign of what lies ahead for UK-EU relations, the current situation provides little encouragement that marketing budget growth will return after flatlining in Q4, with many firms adopting a wait-and-see strategy. We do however expect to see marketing budget improvements once a new relationship with the EU becomes apparent.”
We are looking at stay-cation and realising that travel and such might not be the same through the summer.
Andy Murray, Asda
High street retailer Next, however, says Brexit has had absolutely no impact on its marketing strategy. Brexit-supporting CEO Simon Wolfson believes everyone is “assuming a level of chaos without providing any analysis of what it is that’s going to drive that chaos”.
While many retailers are anticipating prices to rise post-Brexit, Next believes it can save £15m in tariffs in the event of a no-deal thanks to lower trade tariffs – a “modest” saving it says it will pass on to the consumer (i.e. cheaper clothes).
Asda, meanwhile, has been thinking about its advertising creative differently. The supermarket’s marketing function says it has been especially “sensitive” to changes this summer and the possibility that fewer people will take their holidays abroad.
“We are looking at stay-cation and realising that travel and such might not be the same through the summer,” chief customer officer Andy Murray explains. “So shooting locations, making sure we get a sense of what a great British vacation might look like. That’s a reality and human truth we can all get our heads around.”
The future of ‘brand Britain’
Brands’ association with provenance post-Brexit will be a divisive one. Some will see it as an opportunity to play up their ‘Britishness’, while others might want to distance themselves entirely.
“Because brands are an important part of our identity and the heat around Brexit has increased, being a ‘remainer’ or a ‘leaver’ has also become part of our identity, therefore I think brands that are more associated with overtly British values will also get associated with Leave,” says Marketing Week columnist and branding expert Helen Edwards.
“Some brands and businesses may choose to leverage this: the new Jacks brand from Tesco, with its red, white and blue livery and British flag seems to be overtly appealing to Leave, and Wetherspoons is launching its Brexit beer mats; others may leverage ‘remainer’ values, as Jigsaw did with its diversity campaign.”
‘Britishness’ has become a firm foundation of Morrisons’ marketing strategy and is something CEO Dave Potts says it will continue to build upon regardless of the political outcome.
We can only guess the damage that’s being done to ‘brand Britain’ at the moment.
James Murphy, Adam & Eve/DDB
Others, however, may need to rethink how they present their provenance entirely – particularly those brands with ‘low-key’ British associations such as Nationwide and Country Life.
“The issue here is that even previously ‘agnostic’ symbols like the British flag, or even red, white and blue as a colour scheme, have been associated with, and hijacked by, the Leave campaign,” she says. “So even if brands didn’t intend that meaning, the presence of these symbols may consciously or otherwise be off-putting to those of a different persuasion.”
But brand Britain has apparently held steadfast so far, with the rate of growth of UK advertising exports actually accelerating after the Brexit vote. Not just by a little bit either; they were up 18% in 2017 to £6.9bn compared with 2016’s £5.8bn, suggesting the vote to leave the EU has not impacted the sentiment of clients overseas at all.
The momentum could be attributed to clients rushing to do work before Britain closes its doors, or because it’s cheaper to buy services thanks to a weaker pound. But if the latter is true, other industries would probably have seen similar growth, which they have not, with average exports up just 7%.
“We can only guess the damage that’s being done to brand Britain at the moment,” says James Murphy, founding partner of creative agency Adam& Eve/DDB. “But it may well be that while on one level people are able to look at the political class and say it’s an exercise in incompetence on a very public stage, perhaps there’s a separate view of business – particularly of creative businesses and innovation in the UK – that we will maintain our momentum.”
So in a very small nutshell of post-Brexit postulation: budgets will continue to decrease, UK ad exports will keep growing (although probably at a slower rate), there will be an increase in ads about Britain and brand Britain will, for the short-term at least, continue to hold strong. But let’s throw some more uncertainty in there for good measure too.