Export to survive
It seems increasingly obvious the UK ad industry is going to have to diversify if it wants to earn its keep, writes Dominic Mills. Plus: A commercially coy BBC grates
Anyone driving along the Cromwell Road back in March 2018 couldn’t have failed to notice them: a £1m blitz of posters welcoming Saudi Arabia’s Mohammed Bin Salman (aka MBS) on a state visit to London.
“He is bringing change to Saudi Arabia”, was the message — and indeed he was, although the changes are not the ones most people had in mind.
Putting the politics aside, that campaign will have represented a hefty export earner for the UK ad industry: creative agency fees, printing and production fees, media agency/specialist fees and the cost of the media space.
It’s something that the industry is pretty good at. According to Ad Association, UK advertising exports hit £7.9bn in 2018, a 15% increase on the year before. They’re growing faster than other services exports and, surprisingly to me at any rate, the growth rate has accelerated since Brexit. Perhaps that’s what happens when you have to try harder.
You can get a full load of stats here from this report at the Advertising Association.
Think Switzerland and watches, Germany and cars, or France and wine. When it comes to the UK, most people think of financial services. But advertising is coming up fast, and has overtaken non-service categories like engineering and telecoms as an export earner.
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I mention this because it seems increasingly obvious the UK ad industry is going to have to diversify if it wants to earn its keep. The latest adspend forecast from Mediabrands posits an 8.9% decline in advertising spend this year. That seems optimistic to me, and predicted on a V-shaped recovery. Mind you, judging by news reports this Monday (15 June) about queues outside Primark, John Lewis and Sports Direct, consumers are determined to do their bit.
But a fall in adspend leads to a fall in revenue for agencies of at least that magnitude and probably more — well, clients aren’t really going to pay more, are they? — so if they are not to cut themselves to the bone, agencies are going to have to get out into the big wide world and look for work.
They may have to tread carefully politically or, as anyone working on the MBS campaign probably wishes now, taken a more careful approach, but those overseas doors are open. It’s just a question of pushing. When it comes to that, the government is happy to help, assuming this is one area it can display a modicum of competence.
One reason the UK does well is not just its traditional reputation for creativity, but also what you might call cluster theory (of which Silicon Valley is the best example) where like-minded businesses congregate and expertise flourishes.
Think creative agencies, video and audio production, directing skills, post-production, planning (of any variety) media, buying, ad tech, branding, effectiveness measurement, e-commerce, IP/legal skills and so on. You can get top-quality in London as well as other parts of the UK. As well as giving the buyer everything they need in one place, the concentration of talent breeds competition that, in turn, breeds excellence.
The AA’s Stephen Woodford has a good way of putting this: “International work consolidates to where it is done best, and that is good for London and the UK.”
And while I can’t speak for the industry in other countries, the way and speed with which it has adapted here to coronavirus — pitches, producing work and so on — shows an incredible resilience and fleetness of foot.
There are, nonetheless, obstacles to be overcome. One is talent, whether home-grown or imported. The industry has to keep as much of its home-grown talent as it can, while also bringing on new cohorts. That may not be easy as and when cuts take hold or the industry struggles to recruit. On the other hand, the Brexit immigration regime notwithstanding, the UK also has to retain its appeal as a place to work for overseas nationals who, by definition, add a cultural sensitivity that enhances their ability to provide exportable advertising services. Amsterdam, for example, has become a rival to London for foreign (and UK) talent.
The second one, and it is harder to pin down, is whether the changing nature of Britain will work against us. Brexit is supposed to usher in an era of ‘Global Britain’, but if anything we are becoming more insular, shouty, cloth-eared and bloody-minded, a trend that feels accelerated by COVID-19. What does ‘Brand Britain’ stand for now? People from other countries watching the news about the UK might wonder.
Above all, they’ll want to buy from somewhere that shows empathy. Right now it feels that, as a nation, we do the opposite.
Commercially coy BBC grates
It’s always been clear that the BBC has an uncomfortable relationship with commerce, the best efforts of its business reporters notwithstanding. They must feel as though they operate in an environment that combines walking through treacle with institutional lack of understanding verging on indifference.
I was reminded of this listening to an interview on Sunday morning with the chief operating officer of a retailer — revealed to be Dixons Carphone at the end of the piece — explaining how it planned to function when it opened its stores this week.
During the interview the presenter mentioned, as she put it, “another well-known computer games chain” but without putting a name to it. Like other listeners, I suspect, I was thinking: “Well, go on, who is it then?”.
Why the coyness? What editorial guideline is there that forbids a passing, but relevant, mention of a brand name? Has someone told presenters that mentioning brands by name other than in a news story is a form of promotion or crosses some invisible line of impartiality?
The BBC has had a good lockdown, radio especially so, giving listeners comfort, a friendly place to air their concerns and helping bring the nation together. But its unwillingness to name high-street or visible brands — ones that its listeners use and come into contact with every day — is like pretending half the world doesn’t exist. Irritating beyond belief and demonstrating a pre-historic attitude.