BREXIT and the Ripple Effects across the Ad industry in the UK, Europe and Beyond Guy Phillipson, CEO, IAB UK Why did we have the referendum in the first place? Don’t let the truth get in the way… Shocking tactics by Farage, echoes Nazi propaganda Remain Campaign went for the rational arguments Oh F**k Brexit! After the initial shockwave, and a new PM, the markets roared ahead! “Brexit means Brexit!” But what has the Government done so far? Article 50 – PM Theresa May not expected to trigger until early 2017. • “Three Brexiteers” appointed 13 July. • Department for Exiting the EU (DExEU) formed 14 July to negotiate exit. • Department for International Trade and FCO to tackle post-Brexit relations • BUT! Government is keeping hand close to chest: “no running commentary.” Key dynamics The EU ties these two principle freedoms together – No Single Market access without accepting the free movement of people. Access to the European Free movement of people Single Market Two tribes Hard Brexit Soft Brexit “Three Leave Means Open Britain Services Brexiteers” Leave sector – Lobby group born Lobby group of Remain almost campaign unanimous support Change Britain Lobby group Imposition of Single Market access strict migration a priority Leave Britain controls Watch Favours a clean Open to EU Lobby group break with migration Brussels Potentially Potential major little economic impact economic impact How will it all unfold? • UK notifies European Council of intention to withdraw by triggering A50 1. • Negotiations follow. 2. • No specified time to start after notification. • UK has two years to negotiate exit. 3. • Will there be time to sort the new relationship too? • UK officially leaves EU once two years are up/negotiations completed. 4. • Two years can be extended – requires unanimous agreement from EU27. Who will take the reigns for the EU? Article 50 says: “(The negotiations) shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the Parliament.” But does not explicitly state which EU institution should lead. Sets high-level Prepares detailed Approves the Final draft goes position draft mandate: will Commission’s to Parliament for also conduct most mandate: confirmation of the legwork Commission begins negotiations The big players The EU The UK David Davis, Angela Merkel, DExEU German Chancellor Liam Fox, Oversees withdrawal Dep. for negotiations International Michel Trade Barnier, Guy Verhofstadt, Negotiates new Commission trade deals Parliament Didier Seeuws, The EU27 Council Boris Johnson, Theresa May, FCO Manages foreign relations: promotes PM UK abroad Challenges… Securing Single Market access Continued inward Ability to investment Protecting bring in Privacy Shield/ consumer EU talent TTIP confidence UK status as tech leader Consensus amongst EU27 – especially if deal is mixed agreement …and opportunities Some sectors may Take control – benefit from Brexit – UK out of Euro increased ad Streamlined ‘digital spending? regulation - recession’ – proactive? bolster tech leader status? New trade partners – better Settle relationships GDPR with non-EU issues? states? Best and worst case scenarios Better commercial UK retains and policy UK cements access to environment position as Single Market, Chooses to for business – tech leader in strikes free pursue digital more Europe whilst trade deals and manifesto investment, forging new ensures access more start/ global to talent scale-ups – relationships embrace risk! UK cannot secure good EU UK loses Businesses deal and fails to position as Economy falters; struggle to attract recession ensues; strike trade most advanced investment and multinationals deals ; no European talent, consumer leave UK sensible digital economy demand falls immigration policy Adspend continues to grow (and online dominates) Sector 2016 Adspend Change on 2015 Adspend growth Year GDP Consumer Inflation Forecast adspend forecast for 2017 change on spending on (CPI) (£millions) previous previous year TV 5,458 3.6% 3.1% year Radio 609 2.9% 1.7% 2016 1.8% 2.5% 0.7% National 1,098 -10.1% -10.8% 2017 1% 1.3% 1.8% newsbrands CEO Interim Regional 1,062 -9.7% -8.5% Economic Outlook newsbrands September 2016 Magazine 886 -5.9% -7% brands Cinema 243 1.3% 2.4% Internet 9,665 12.3% 10.1% Direct mail 1,672 -7.2% -5% Total UK 20,868 4.2% 3.8% adspend UK Ad Association post- Brexit forecasts Thank You Guy Phillipson @guyphillipson [email protected] .