Exiting the European Union could cost the UK £1 billion (US$1.5 billion) in lost advertising revenues, according to data from media agency ZenithOptimedia.
It said that while the short term effect would be minimal, ‘Brexit’ could cost the UK £70 million in advertising spend growth annually, equating to £1 billion by 2030. It did not break out the proportion of that total that would be from TV ads, but TV remains the most single important medium for advertisers.
Zenith cited figures from the UK Treasury that examined the post-Brexit scenario from an economic perspective. If the Treasury’s forecast for a post-Brexit drop in GDP are correct, growth in the UK’s advertising sector would be curtailed over the next 15 years, Zenith said, noting that ad growth closely tracks GDP.
The media house added that, having surveyed advertisers, ‘the effects of deciding to leave the European Union would not be felt for at least several months after the vote’. None of the advertisers in the survey said they planned to revise their budgets in the case of a UK withdrawal from the EU.
“While the immediate effect would be muted, Brexit would have a long‐term cost for the UK ad industry, holding back its growth by £70 million a year,” said Jonathan Barnard, Zenith’s head of forecasting. “It would also threaten to make cross‐border accounts in Europe more costly and cumbersome to operate.”
UK voters go to the polls to decide on the country’s future in the EU on June 23.