BREXIT: IN OR OUT?

Uncertainty is endemic in business. A loss in confidence can quickly percolate through the industry and the wider markets resulting quickly in stock market corrections.

Evidence appears to suggest we are starting to see this as the country count downs to the EU referendum. Uncertainty over the future of Britain, whether you are an inner or an outer, is starting to impact on overall business investment, with fears this will influence advertising budgets. If the advertising sage Sir Martin Sorrell suggests the next few months will be risky expect companies to have taken notice.

For those willing to take a calculated bet this potential wider reduction in marketing investment actually provides an opportunity.

In the same way we are told a fall in the stock market presents a good chance to buy shares on the cheap, a reduction in overall advertising budgets is a great opportunity to move ahead of your competitors.

Studies, such as a recent Millward Brown piece of research from the last downturn, have shown that when economies go through wider shocks maintaining your advertising budget actually benefits those brands who stay strong. It helps steal a march on your competitors given the greater SOV you can achieve both in the immediate term but also more crucially in the longer-term. This means you come out the other side in much ruder health than those who have to play catch up with evidence that spends needs to increase by 60% more than the amount saved to reach the equivalent point.

This uncertainty & fear may only be temporary although depending on how the vote goes on Thursday 23rd June it could well be prolonged, although this may well depend on what wider independent study on the future of the British economy you believe in.

For the record and purely a personal preference, my vote is to stay in the EU. 

Point of View of Matthew Wragg, Business Science Director