The economic fallout from the Brexit vote is likely to be measured in years, if not decades. But, like the referendum itself, there has been fierce debate about the short-term impact.
A study from the Advertising Association has found that 22% of 200 companies surveyed lost business due to the Brexit vote. James Murphy, Adam & Eve/DBB co-founder and AA chairman, told the Lead 2017 conference: "On the Friday afternoon of the vote, I got a phone call from a large North American client cancelling a contract, with the question: ‘What the hell have you guys done?’ The following Wednesday, a European client cancelled." That flurry of activity died down following the immediate aftermath of the vote, but Murphy noted that sentiment among global clients remains "quite brittle".
He added: "We were talking to a European client about centring their business in London as a hub for Europe [before the vote]. And now the client is going for a diffuse structure… which is very annoying."
Yet there are few signs to suggest the impact of the referendum has yet damaged the ad market.
Nearly a quarter (23%) of respondents in the survey said they saw Brexit as an opportunity for growth, while 8% have increased investment in the UK. In addition, recent AA figures show UK adspend grew 4.2% in the third quarter of 2016.
Richard Oliver, UK managing director of Magna Global, believes the industry can ride out the Brexit jitters. "We predicted that elements of the ad market would soften in 2016 and so, for some advertisers and media owners, Brexit was a convenient excuse for falling spend," he says, adding that he sees no evidence the fallout of the vote is broadly harming the market.
That is also the view from the City. Ian Whittaker, media analyst at investment bank Liberum, says: "Brexit does not appear to be harming the ad market. With the exception of Next, the Christmas figures from retailers have generally surprised positively."
Sterling’s slump has had a mixed effect, making it easier for exporters and for UK companies with foreign earnings but tough for overseas businesses earning in pounds and for importers facing a spike in costs.
But there is no avoiding the fact that currency devaluation has made Britons poorer. Mark Essex,
associate director of KPMG’s strategy group, told Lead: "The workforce has taken a 19% pay cut without changing their living standards. Britain is on sale."
If there is a silver lining, it is that history shows smart companies that invest in their brand in an uncertain market will drive sales and grow faster.