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On the Agenda


The General Election: An opportunity for growth in advertising?

With a General Election set to take place on July 4, advertising folks offer their views on what could be done to strengthen the UK economy

By Stephen Lepitak

On July 4, Britain will make a collective decision. And based on the state of the nation, it’s perhaps overdue. This election is expected to bring with it a wind of change, and while there will be various domestic and international policies that the political parties will argue about, there's little debate that the next Government must pay particular attention to kick-starting the economy and rebuilding the fortunes of Britain's business sector.

Following a soft recession, the UK economy has seen very modest growth of 0.6 per cent between January and March. That recovery has been far from strong, but with inflation declining to 2.3 per cent in May, the Prime Minister has put his faith that this might be as good as it gets in the coming months – which has led him to call this summer election.

But if this election is to be fought on how the next party in power will improve economic conditions, then there's little doubt engagement and support of the business sector will be necessary.

According to the most recent Advertising Association/WARC Expenditure Report, the UK ad market would spend around £38.8 billion this year. Similarly, GroupM's '2023 Global End-of-Year Advertising Forecast'  predicts that ad revenue in the UK is expected to hit £41.3bn this year and could grow to £50 billion by 2028, However, those numbers may yet prove conservative having been forecast before news of the economic growth was revealed, and the earlier than expected General Election being called.

There are potential green shoots of positivity to be found.

Advertising is one of the UK’s domestic and international success stories and its growth powers the rest of the economy. So what does the advertising sector think is needed to help drive UK growth? Here are the thoughts of some industry leaders on what could be done.

 

Annette King, chair of the Advertising Association and global lead for communications at Accenture Song

"Now we have a date for the election on 4 July, we can look forward to the publication of the party manifestos. 

Advertising is one of the UK’s domestic and international success stories and our growth powers the rest of the economy. For this to continue, we need regulatory certainty and continued support for the ASA and the broader self-regulatory system.  

To help us drive UK growth even further, we need the next government to prioritise policies that improve creative and digital skills, because having the best talent has been at the core of the UK advertising sector’s global success. One example of how a future government could do this is by reforming the Apprenticeship levy, to allow business flexibility to spend levy money on industry training and qualifications.

UK advertising directly employs over 366,000 people across the country, in cities like Manchester, Leeds, and Edinburgh, with 57 per cent of jobs based outside London. Because of this, we rely on talented people from every region and nation of the UK, spreading growth across our country. Investment by central, devolved, and regional government in creative clusters, not just in our major cities, will provide enhanced economic security and growth for our sector. 

Whatever the outcome of the General Election, the Advertising Association will continue its close engagement with government, to best highlight the strength of our industry in promoting responsible growth for the UK.

Josh Krichefski, GroupM CEO UK & EMEA and IPA President

To reach GroupM's '2023 Global End-of-Year Advertising Forecast' we will need the government's support for our industry to continue fueling the British economy. Those economic benefits are on top of the rich cultural contributions our sector's work makes that leave a lasting impact on UK society.

Meanwhile, Britain's multiculturalism is one of the many things that makes our country great and to reflect that in our work, we need people who can bring those unique international perspectives to the table.

 We would like to see an incoming government explore approaches that might level the playing field to ensure the UK can attract and retain the best international talent and remain a powerful force in global advertising - whether that means simplifying some of the processes involved in recruiting talent from overseas or reducing the costs required to do so.

And the government's cautious, iterative approach to AI regulation makes a lot of sense considering the need to balance the technology's rapid development with its potential to support innovation and creativity in our sector. We hope this continues - with ample international cooperation where possible - so that rules can be standardised across regions and markets.

There's great potential for AI in our industry and regulation should be welcomed. It will no doubt augment human skills and creativity and that's a message I try to get across to those worried it could displace them.

Tom Knox, Chairman MullenLowe

The overwhelming sentiment from the industry is that we want stability and competence, allied to a long-term growth strategy that focusses on infrastructure and technology. Of the many embarrassing aspects of the current government’s record, the fact that there have been 13 Secretaries of State in the Department of Culture, Media and Sport in 14 years (including the nadir of Nadine Dorries) is a depressing example of the chaos and lack of consistency that included the ill- informed plan to sell off Channel 4. 

What’s needed is a clear result, a strong mandate and a government that realises the importance of the creative industries to our economy and will work to create an environment conducive to long-term investment and the free movement of talent. I find it astonishing that the Brexit elephant in the room is being ignored but after the election better co-operation with our European partners will be vital.

Conrad Persons, president for Grey London

Any election result – be that a surprising return to power for the Conservatives, or Labour taking the reins – is an opportunity for change. I desperately hope that the election result brings a shift in mood music – that it gives both the public and our industry a sense of optimism and swagger – not only for our national spirit but because we know that sentiment can translate into hard economic results.

The creative industries are vital to the UK’s economy but also its national identity. I hope that whoever is in Downing Street next thinks about specific programs to accelerate growth in this area. That they believe in the power of cultural currency, and have specific policies to support it – be that making it easier to access talent, supporting programs that facilitate diversification of the arts and media, ‘level up’ from a cultural perspective (to ensure there are several cultural capitals in the UK, not only one),  and most importantly making long-term plans that give leaders visibility on the UK’s ‘big bets’ for culture, media, and the arts.

I feel that our industry – given the number of people it employs – has a disproportionately small share of voice compared to peer sectors. I don’t simply want us to have a seat at the table – I want us to have a voice – and be positioned as an accelerant to the UK’s growth and renewal.

Larissa Vince, CEO of TBWA\London

There’s an inadvertent impact of change - like the new manager bounce - which wouldn't require a new government to do anything but be different. Sometimes, the very fact of change can improve consumer confidence and to be honest, that would be the most powerful thing that any government could deliver. And the upcoming summer of sport will (fingers crossed) boost confidence too.

In terms of what the next government could do beyond that, it’s sometimes more about what they shouldn’t do. What I mean by that is, that it can be quite tempting when you’re a new government to introduce or follow policies that are vote-winning – e.g. banning advertising of some description. But sometimes that is not done for the right reasons. Self-regulation is a proven successful model for the ad industry, so ideally the default would be in support of that.

And of course, we all know the creative industries are incredibly important to Britain’s economy. That doesn’t necessarily need government funding or promotion, but an active appreciation for our sector would be great. A government that believes in the power of the creative industries, broadly, has got to be a really good thing for business. 

Charles Vallance, founding partner and chairman, VCCP

The UK creative industries are one of the country's greatest export success stories. Advertising exports alone were worth £12bn in 2023, up 32.5 per cent.

And the reason for this is that we are world-beating.

My advice to any incoming government would be to strengthen the conditions for continued success and to avoid anything that restricts them. For instance, the creative industries are talent-hungry. We need more talent, and we need more diverse talent from across the country in defiance of an increasingly entrenched London and the Rest divide.

What are the incentives and policies to create a greater flow and exchange of creative ideas nationwide, across all social classes and backgrounds? Otherwise, the group think that London-centricity could hold us back. Meanwhile, please can we avoid rules and regulations that will make us less competitive, especially about Asian and American counterparts?

Creative companies need to be able to move fast, shape-shift and adapt. I can't speak for other industries, but we need a regulatory framework which facilitates these dynamic, agile qualities rather than deterring them with new layers of bureaucracy and box ticking.

In his 1980 manifesto for Nike, Phil Knight cited Bureaucracy as the No 1 danger to his business. Since then, US creative and tech industries have led the economic agenda because they were able to avoid the inertia that held many other economies back, where regulatory systems were designed more for the Manufacturing than Information Age.

We’d like more policies that unlock creativity, diversity and plurality and fewer policies that create rigid, rule-bound, formulaic outcomes. The latter will see us sink to mid-table mediocrity in the global league table, the former will ensure that we continue to lead the world.

Richard Huntington, Chief Strategy Officer, Saatchi & Saatchi

I could be measured and impartial about the outcome of the General Election or I could be honest. In my view, there is absolutely no path to victory for the current government. In very short order Rishi Sunak will be drawing a line under his premiership. With that in mind, we need to be pushing Starmer’s Labour for their plans and pushing hard, with just weeks left in which we as voters hold some power.

And given the lack of time, we need to be disciplined in what we need - growth. Growth, growth, growth!

Our businesses have endured 16 years of lifeless growth, instigated by the global financial crisis then worsened by austerity, Covid and a succession of leadership changes. This year the International Monetary Fund predicts we will grow by a derisory 0.5 per cent - contrast that with the 4.6 per cent we were enjoying when Labour last came to power. While our productivity is going backwards.

British business cannot thrive without a successful economy and the stability to invest. It’s simply not acceptable to leave growth to us – government creates the framework for business success – through monetary policy, industrial strategy and regulatory environment.

So, we need to be clear with Starmer and Reeves. We need to know what their plan is and have confidence that it will grow our economy - fast. Stability and security are important, but they aren’t an economic plan, and after sixteen years we need more than good intentions.

Phil Smith, Director General of ISBA

 The next government will be facing some of the biggest challenges which confront our society and economy. From keeping people safe online, to effectively regulating and leading the world in artificial intelligence. These issues will have a huge impact on the advertising sector.

Advertising and marketing underpins the UK economy and growth which can be shared in communities across the country. But the advertising industry has had to engage with 11 Secretaries of State for Culture, Media and Sport in the last 11 years. Our members need a government which will deliver stability and clarity, while working in partnership and collaboration.

ISBA is a member of the government’s Online Advertising Taskforce, and we have been leading the working groups on Age Assurance and Influencer Marketing. A lot of good work has already been done, so we hope that the next government will build on that work, in partnership with advertisers.

An incoming government will need to provide clarity for advertisers after the Data Protection and Digital Information Bill failed to pass in the ‘wash-up’ of legislation before the election. The industry is left with uncertainty on the future regulation of consent for digital advertising.

We look forward to engaging with the next government, whoever that is, on all these issues and more as we work to create an advertising environment that is transparent, responsible and accountable – one that can be trusted by the public, advertisers and legislators.

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