Why Most Ad Agencies Want the United Kingdom to Stay in the European Union

What a 'Brexit' could mean for the creative industry

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For those not currently embroiled in the ongoing and emotionally charged debates taking place within the European Union, a massive vote—the EU Referendum—is on the horizon. On June 23 the United Kingdom will decide to either remain in the European Union or leave, sparking conversations about the potential impact either option would have on immigration, trade agreements and short and long-term economic effects.

The vote—nicknamed Brexit to signify a British exit from the EU—has, understandably, stirred concern and discussion within the advertising community both in the U.K. and throughout other European ad agencies. Many of the industry's biggest names have vocalized their opinions on a possible Brexit, including WPP chief executive Sir Martin Sorrell and Publicis Groupe chief executive Maurice Lévy—both are decidedly anti-Brexit. 

At this year's Advertising Week Europe in London, Sorrell kicked off a three-plus hour session dedicated to discussing the impact a possible Brexit could have on the industry. Sorrell noted that should the people vote in favor of leaving the EU, WPP would most certainly "lose influence in four of our top 10 markets—Germany, France, Italy and Spain … I know clients will close plants, I know that jobs will go," he said.

One of Sorrell's main arguments surrounding the vote revolves around immigration—a major point of contention in the overall Brexit debate. Supporters of the 'vote leave' camp argue that being a member of the EU has led Britain to lose control of immigration, with laws allowing free movement among the 28 countries. However, many U.K. ad agencies rely on the fact that they can hire talent from outside of the country to come and work for them. Agencies argue it creates a more European mindset, which in turn leads to a stronger roster of global clients. 

"We have significant numbers of staff from other EU countries and the thing is, it's one of the reasons U.K. agencies are able to work so well across the region," adam&eveDDB chief executive James Murphy told Adweek. "Also one of the reasons U.K. agencies pick up a lot of global ad accounts is because they're seen as open to the world and globally, internationally minded."

"We work with clients in France, Germany, Italy, Spain. One of the reasons they come here is they think they are going to get brilliant creativity from people who share a European mindset, not who have a parochial or nationalistic mindset," Murphy added.

Benedict Pringle, founder of website Politicaladvertising.co.uk, noted that U.K. agencies are increasingly acting as regional hubs for Europe and if clients start to feel that "British agencies begin to have a Little Englander mentality, there's [a] reason why Amsterdam or Paris may start to look more attractive."

On the flip side, the U.K. remains one of Europe's largest exporters of advertising services. Pringle noted that the leave side might argue that if the U.K. were to leave, it should have no trouble securing a favorable trade deal with the EU and could allow some of the industry's top talent from the U.K. to succeed by reducing the levels of immigration into the country.

72andSunny Amsterdam managing director Nic Owen, feels differently. The agency is extremely diverse, with over 30 nationalities represented, and a number of members coming from the U.K. "Not needing to get visas for these people saves time and money," Owen said.

Then, there's the financial aspect to consider.

On the one side, the Campaign for an Independent Britain argues that while there may be some minor adjustments immediately following a vote to leave, like a "sudden short-term fall in the value of sterling," the long-term benefits would hugely outweigh any minor setbacks, John Petley, operations manager for the Campaign for an Independent Britain, argues.

Agency analysis would argue otherwise. A recent report from Publicis Media's Zenith suggests that leaving the EU would end up costing the U.K. 70 million pounds (roughly $99 million) in ad spend growth per year, reaching 1 billion pounds ($1.45 billion) by 2030. The report argues that while the immediate effect on the U.K. ad market "would be muted," a Brexit would have a long-term cost for the U.K. ad industry … It would also threaten to make cross border accounts in Europe more costly and cumbersome to operate," Jonathan Barnard, Zenith's head of forecasting, stated in the report. 

The upcoming vote has also drudged up plenty of emotion, which spilled over into violence last Thursday when a Labour MP from West Yorkshire, Jo Cox, who had been campaigning to keep the U.K. in the EU, was murdered by a man who shouted "Britain First" as he shot and stabbed the mother of two to death.

As the vote approaches, it seems increasingly more likely that a British exit could in fact be possible. According to cheeky website Brexit Belly—which uses Financial Times data to measure the percentage of voters leaning towards leaving (the outies) and those leaning towards remaining (the innies)—as of Monday June 20, the split between "innies" and "outies" is even, both at 44 percent.

"I don't think anyone is clear in terms of what the exact fallout will be. We will still work closely with brands and people in the U.K., but it will just make things a touch harder, for no valid reason that I can see … there will be additional bureaucracy to deal with," Owen added.

@ktjrichards katie.richards@adweek.com Katie Richards is a staff writer for Adweek.