Post-Brexit, We Will Be More European Than Ever

Most industries are fiercely competitive but how many need an intervention by the United Nations to get them to play together nicely?

That distinction is held by the global advertising and marketing services business, which gathered on the Cote d’Azur two weeks ago for its annual celebration of commercial creativity: the Cannes Lions festival.

The Friday before last, UN Secretary-General Ban Ki-moon invited on to the stage the leaders of each of the world’s six biggest advertising groups. Normally at odds with one another, we were there to pledge our collective support for the Sustainable Development Goals, the UN’s ambitious targets for tackling the world’s most pressing problems – from poverty to climate change.

WPP and its peers – Dentsu, Havas, IPG, Omnicom and Publicis – will each commit people, time and resources to raising awareness of the goals and working with clients to help find solutions. The idea first emerged when I interviewed Al Gore at last year’s festival and we talked about bringing rival companies together to fight global warming.

An international ad campaign was ready to launch the next day, it was a big moment for our industry and it should have been the only story in town. But, of course, something bigger was happening back in the UK. With grim irony, the day we unveiled a programme called “Common Ground” was also the day the UK decided that was not something it shared with the rest of Europe.

The sense of shock in France was palpable – among our own people, among our French hosts, among delegates from around the world. At this most internationalist of events, few could understand why Britain had chosen to turn its back on its European neighbours. British attendees spent the week apologising to the French – first for our football fans, then for the biggest snub to Europe since the infamous message delivered by The Sun to Jacques Delors more than 25 years ago.

But should we really have been so surprised?

Common Ground, which the Secretary General described as “an historic, first-of-its-kind step” is a great initiative that we hope will make a significant contribution to the UN’s campaign. But Cannes (with its super yachts and high-end boutiques) and the festival (an industry talking to itself) are perhaps the perfect emblems of the bubble inside which too much of the Remain campaign was conducted.

In the final analysis, the campaign was out of touch with the concerns and views of the majority of the electorate. The exclusive focus on the rational economic argument, neglecting the more emotionally-driven issues of sovereignty and immigration, was an error, and those of us who supported Remain spent too much time preaching to the choir.

The full consequences of Remain’s failure are hard to predict but they will include, I’m sure, demands for more referenda both here and across Europe, and slower GDP growth rates in the UK and beyond.

There will be considerable uncertainty for some time to come, which will slow decision-making and generally deter economic activity. There is an inherent tension between the Government’s delay in triggering Article 50 and the desire from business for swift action to reduce uncertainty.

All this in a business world long cursed with an excess of caution, risk-aversion and short-termism. We have already seen examples of investment decisions being put off or cancelled altogether, the faltering Tata Steel sale process being a case in point.

Meanwhile, the fact that the Brexiteers, having not expected to win, don’t even have a Plan A, let alone a Plan B, hardly helps to boost market confidence.

However, we have no choice but to put on our tin hats, deploy that stiff upper lip and make the best of things. I have already recovered from my post-referendum depression, and am looking ahead to a post-Brexit future.

Paradoxically, that future will see WPP become more European than ever. While the UK may have voted to leave Europe, WPP has not. Four of our top 10 markets are in Western Continental Europe – Germany, France, Italy and Spain – and we will need to redouble our efforts there in order to maintain our position and influence. We’re not planning to cut British jobs because of Brexit, but we are likely to increase the number of people we employ in key European markets faster than we do in the UK.

Counter-intuitively, we may experience a short-term benefit from Brexit. Ninety percent of our business is outside the UK, so while the fall in Sterling will hurt us locally, our natural currency hedge will more than balance that effect, with a net positive impact on revenues, if not market capitalisation.

Our strategic reaction to Brexit is essentially to pursue our current approach even more vigorously than before. That means a greater focus on the fast-growth markets (so-called “emerging” economies); a greater focus on data and digital; and (another irony) a greater focus on getting our people to work together more effectively across national and functional boundaries for the benefit of our clients.

Working together for its clients (the electorate) is something the UK’s political class is currently finding hard to do. At the event in Cannes, Ban Ki-Moon said: “There is no limit to the power of people to make a difference when they join forces for the global good.”

After a vote for division and isolation, and a descent into political in-fighting, this message of unity is one that Westminster would be well-advised to listen to. Don’t hold your breath.

A version of this article first appeared in the Sunday Telegraph

Photo: Getty Images