Brexit to ‘Adxit’: Industry leaders warn of global ad spend slowdown
Leaders from across the advertising industry have warned of a global slowdown in ad spend in the wake of the UK’s decision to leave the European Union, which caused chaos in global stock markets overnight.
On Thursday just under 52% of voters opted for Britain to leave the EU, a move which will see it have to renegotiate trade agreements as well as things like work permits and visa arrangements with its European neighbours, and the rest of the world.
Australian Mat Baxter, the global strategy lead for IPG Mediabrands-owned media agency UM, has warned of an Adxit as a result of the decision, predicting many major advertisers will cull their spend to see what happens across global economies.
Brexit could lead to Adxit: Mat Baxter
“Based on my past experience, whenever major global events rock consumer confidence marketers make significant reductions to their advertising budgets. It happened after 9/11. It happened during the global financial crisis. And it will happen following the Brexit,” he wrote in a post on LinkedIn.
“The big question is the size of the drop. My guess is major advertisers might stop advertising all together for a few months (something major brands have done in the past in similar circumstances) and could possibly reduce their expenditure by anywhere from 10% to 40% until the real impact of this decision becomes clear.
“Either way, the Brexit is going to have plenty of nasty children and “Adxit” will be its first born.”
Sir Martin Sorrell, the CEO of British based WPP, the world’s biggest ad holding group, told Business Insider the move was “very disappointing”.
‘Disappointed’: Sir Martin Sorrell
He added: “The resulting uncertainty, which will be considerable, will obviously slow decision-making and deter activity. This is not good news, to say the least. However, we must deploy that stiff upper lip and make the best of it.”
In a later interview with US publication AdAge Sorrell admitted it may give a short term boost to the UK business, but said the company would now need to add more workers to its European bases.
While the number of British ad industry workers coming to Australia is understood to have slowed in recent years the Brexit could see a fresh influx of talent if the country falls into another recession, as some are predicting.
Maurice Levy
In a video interview with UK publication Campaign Maurice Levy, CEO of Publicis Groupe, said he was “sad” at the move, and warned: “I think that it’s something which will have serious consequences in the future, first and foremost for the UK, and the UK will have to face a few issues including Scotland who will be very unhappy with the decision.
“I don’t know if United Kingdom will still be united. It’s something that will also have consequences for the City [of London].”
