How agencies can thrive post-Brexit
- 05 August 2016
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If the UK waves au revoir, auf wiedersehn and adios to its 43-year membership of the world’s largest trading bloc, what comes next for UK’s creative and marketing agencies?
At the moment, marketing and creative agencies might still be finding it hard to focus on a future outside the EU. But as Chris Daly, chief executive at CIM, has said: “In difficult times, when business is facing strong headwinds, strengthening and retaining market share and keeping focused on new opportunities are essential. Understanding and retaining relationships with existing customers will be key to survival and growth, as will using market and customer insight to find those new opportunities and new markets.”
Brexit means a re-engineering of the UK economy – and the agencies that thrive in it will be those that succeed in re-engineering themselves in response. Business development is a crucial area. How you approach your agency’s marketing, PR and new business activity will have a huge bearing on how well you adapt.
Here are five steps every agency should be taking now to prepare for Brexit:
1. Look afresh at our new trading partners
Around 20% of the UK creative industry’s revenue comes from export. Of that, Europe accounts for 57%. Brexit will bring change. It might become harder to trade with members of the EU and easier to trade with other parts of the world.
Agencies could look to the US. It is the world’s largest economy, shares a language with the UK, and plenty of UK agencies already operate successfully there.
Asia has fuelled global growth in recent years, and its less-developed agency sector may provide opportunities for UK agencies.
Africa’s GDP growth may have slowed since 2010 to an average of 3.3%, but within that continent there are also opportunities.
Creating new business is rarely a quick process, however. Agencies should not delay in starting to build new relationships and refreshing their reputations, and positioning themselves for future growth.
2. Target specific sectors
What happens if the value of the pound falls? A falling pound will make the UK a more attractive holiday destination for visitors, both domestic and overseas. It also makes UK property a more affordable investment from overseas. Those may be good sectors for agencies to target.
How would a recession affect the sectors we want to work in? There are the traditional recession-proof sectors – such as core food and drink products, utilities and healthcare. Luxury items tend to be fairly recession-proof.
Finally, while we may think of the tech sector as fairly sensitive to recessions, a February 2016 report from IT recruiter Randstad Technologies revealed the reverse to be true – the tech market’s total wage bill grew by 82% between 2002 and 2014.
3. Consider the services you promote
In uncertain times, corporates often put budgets on hold. Will the pause button remain pressed until the dust settles?
The answer is probably yes – and no. New products will need brands, existing ones won’t need new ones. Brands will need proven ad campaigns to shore up market position, but perhaps not risky new ones. Quick activations and digital campaigns that show rapid ROI may be more likely to get budget sign-off than big ticket programmes where success will take a while to show.
4. Review agency messages
Whatever you say about your agency’s strengths, points of difference and purpose, consider how it will be affected by Brexit.
Tweak your messages, emphasising how strategies you have always recommended are even more important now. Or you might go further. For example, while agencies will be looking to the US, Asia and Africa, so will clients – and they will need agencies that know how to take them there. Has your agency ever helped a brand pivot away from Europe and towards our new trading partners? Could you build that into a compelling story about your agency?
5. Invest selectively to grow
In times of uncertainty, there is always pressure from the numbers people to cut spending. Yet agencies that pull up the drawbridge and wait inside, complaining about corporate spending cuts, are not those who will thrive post-Brexit.
On 23 June 2016, the location and nature of opportunities moved. Agencies need to invest now to reach those opportunities. There is a weight of evidence to suggest firms that cut marketing investment during a downturn emerge weaker (if at all) when things pick up.
Towards the end of the last recession, a Harvard Business Review study looked at strategy selection and corporate performance at 4,700 companies during the past three global recessions: 1980-1982, 1990-1991, and 2000-2002. The companies that did best were a small subset following a very precise strategy: reduce costs via operational efficiency, and increase spending on marketing, R&D and new assets.Back to all
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