Saturday 24 February 2018

Steve Dempsey: Time is ripe for a more substantive Brexit debate

'In broad economic terms a post-Brexit drop in GDP will curtail growth in the UK's advertising sector in the coming years, as advertising spend broadly tracks GDP.' (Stock)
'In broad economic terms a post-Brexit drop in GDP will curtail growth in the UK's advertising sector in the coming years, as advertising spend broadly tracks GDP.' (Stock)
Steve Dempsey

Steve Dempsey

Brexit means Brexit, or so we're told. But not even UK legislators know what Brexit means for certain sectors of society and industry. So much so that the House of Lords has to decide to give an ear to advertisers before the UK gives the fingers to the EU.

But with Brexit set to have a huge impact on advertising and media in this country too, perhaps our politicians also need listen to the concerns of Irish advertising and media sector.

Last week the House of Lords Select Committee on Communications issued a call for evidence ahead of an inquiry into adland.

Brexit could mean bad news for advertisers in the UK. The country is the second biggest exporter of advertising services in the world with exports of £4.3bn year, and losing access to the single market could curtail that level of exports. A tougher stance on immigration could also impact agencies. Up to 20pc of those working in UK advertising are from other EU countries. Plus there's confidence. In January a survey from think tank Credos and the Advertising Association - the trade association that represents advertisers, agencies, media, and researchers in the UK - found that 22pc of agencies claimed to have lost business following the Brexit referendum.

In broad economic terms a post-Brexit drop in GDP will curtail growth in the UK's advertising sector in the coming years, as advertising spend broadly tracks GDP.

So it's no surprise that groups like the Advertising Association has called for clarity on immigration to help agencies in the UK to attract global talent, a focus on education to address the skills shortage brought on by the shift to mobile, and crucially, equivalence in UK law with a host of EU rules that relate to media and advertising to maximise market access.

Seeing as the advertising industry is getting to discuss its concerns with legislators in London, shouldn't the Irish advertising industry expect an audience with members of the Oireachtas? As if Brexit wasn't enough, changing media consumption habits and the growing influence of Facebook and Google are also taking their toll. The advertising industry - not to mention the media at large - could do with any regulatory fillip going.

Our TDs and senators are well used to hearing about Brexit. And they've even considered it in relation to the media - specifically in relation to RTE. Here's what RTE's Director General Dee Forbes told the Joint Committee on Communications, Climate Action and Environment, last November in a hearing about public service broadcasting: "Advertising has improved over the past couple of years, but Brexit is now having a direct impact. Television advertising has been severely hit both here and in the UK." RTE has also stated that Brexit has had a significant negative effect on the economic climate and greatly reduced commercial income in the second half of 2016.

But Brexit isn't just an issue for RTE. Almost all media outlets and agencies are set to suffer - especially if the bigger-spending brands start pinching pennies and opt for short-term tactical advertising over strategic brand building. One obvious area of concern is the consolidation of Irish and UK budgets into UK agency operations, and what effect Brexit will have on this trend.

So what sort of regulatory remedy could our politicians cook up? Well, the IDA was given an extra €500,000 last September to keep Ireland front of mind for post-Brexit foreign investment. It could also be tasked with promoting the country as a hub for creative industries. There's also an opportunity for Irish agencies to address its own skills shortage by attracting some talent that would have gone to the UK. According to IAPI's 2017 industry census, ad agencies in Ireland are 91pc staffed by Irish nationals, with 5pc coming from the EU, and 4pc coming from outside the EU. And to address Brexit and protect indigenous media entities from the phenomenal growth of Facebook and Google, businesses could be offered advertising tax credits, to be spent with Irish-owned agencies and media outlets.

In July, the Joint Committee on Communications, Climate Action and Environment held a forum on the future of public service broadcasting in Dublin Castle. The focus was understandably on RTE and TG4.

But perhaps its time for legislators to have a broader discussion of the media and advertising in Ireland. Brexit and other events may be the ideal opportunity to engage with the wider industry to review the global and local challenges and opportunities thrown up by Brexit and other disruptive influences.

Sunday Indo Business

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