PWC Research Shows Creativity, Talent and Reputation are Foundations for UK Advertising Export Success
Research by PwC, commissioned by the Advertising Association, has identified a circle of creativity, talent and reputation at the heart of UK advertising exports success, following a decade of year-on-year growth. The new report – Powering Up UK Advertising Exports - includes a micro-economic study by PwC of companies behind these UK advertising exports, identifying drivers and barriers while also assessing the impact of Covid-19 on future success. 91% of companies said their revenue this year will be impacted by the coronavirus crisis, but one in five companies cited an increase in international revenue streams and, for some respondents, the crisis has accelerated that growth.
The new report, developed in partnership with UK advertising think tank Credos, highlights how exporting endeavours can fuel business growth, while reducing dependency on the UK’s domestic market. The biggest barrier to the export market was seen to be cost, namely the logistical costs of setting up operations abroad, the cost of foreign business development and the cost of competitive pricing versus local suppliers. Other issues identified were legal and regulatory risks and cultural differences, but crucially the perceived barriers relating to company size were found to be overstated.
In response to the findings and in preparation for the UK’s departure from the EU, the Advertising Association is encouraging the Government to continue negotiating trade continuity agreements with existing and new free trade partners. Specifically, for the UK to start bilateral partnerships with emerging and fast-growing markets to generate the greatest benefits for UK exports. The Advertising Association has also published a plan for collaboration across the industry to help UK advertising overcome barriers to exporting, reinforce the drivers and increase the overall success of UK advertising globally.
Sam Tomlinson, partner, PwC, said: “The UK’s success in advertising exports was found to be driven by creativity, talent and global reputation, which are all mutually reinforcing – without talent you can’t have the creativity to obtain a global reputation, and without a global reputation you can’t attract the quality of talent required to produce world class creativity. The UK advertising industry has shown remarkable resilience and adaptability in regard to Covid-19, resulting in unexpected upsides for some creative companies. With international relationships under the spotlight due to Brexit, now is the time for the industry to push for increased international trade, allowing companies of all sizes to showcase their talents.”
Stephen Woodford, chief executive, Advertising Association, said: “This new analysis from PwC underlines the unique qualities of UK advertising that we must protect and promote globally. This is doubly-critical, given our ambitions following Brexit to work with customers around the world and for our industry to build back better and stronger from the impact of Covid-19. Our new report shows just how special our offering is – the ability to provide a complete package of strategic, creative, production and technological services of the highest quality from one easy-to-access location.”
Other key drivers of UK advertising export success, identified by the PwC analysis, were the global use of the English language and the UK’s geographical location enabling it to transcend time zones with Asia and America. The size and scale of the UK’s industry also provides a strength in depth of specialisms coupled real collaboration across strategy, creativity, production and technology.
Last month, the UK Advertising Export Group (UKAEG), which is backed by the Advertising Association, the IPA, the APA, the DMA, London & Partners and the Creative Industries Council, launched its new ‘Made Global’ campaign. Developed by UKAEG members, adam&eveDDB and The Mill, the campaign is led by a new two-minute long brand film featuring work for customers from around the world from businesses across the industry, underlining how the UK advertising industry remains open for business during the ongoing coronavirus crisis. The campaign was launched at Advertising Week 2020, backed by a B2B social campaign which included support from the Department for International Trade and the GREAT campaign.
Looking to 2021, the UKAEG will be curating content at key events such as SXSW, Shanghai International Advertising Festival and Cannes Lions Festival of Creativity. It will be building on work with key markets such as USA, Europe and China and expanding into new markets such as India, MENA and Asia where there is a growing demand for work from UK Advertising. At the same time, the group will be encouraging more companies to build their export revenues through collaboration and joining the industry-wide promotional plans, in partnership with UK government.
Annual UK exports of advertising services reached a total of £7.9 billion in 2018 according to the latest ONS figures, a 15% increase as the industry overtook Telecommunications and Engineering services to become the second largest services for exports behind Computer Services. £3.7 billion worth of advertising services were exported to EU nations, accounting for 53% of overall UK advertising exports. The percentage of all UK advertising exports going to Europe, including both the EU and non-EU countries, was 55%. The US is the largest market for UK advertising services in terms of individual country exports. In total, the USA purchases £1.1bn worth of UK advertising services. The US is followed by Germany (£1bn), France (£733m), Switzerland (£661m) and Ireland (£640m).