Episode #1: How Does Brexit Affect the European Communications Industry?

How Does Brexit Affect the European Communications Industry?

With the UK being such a massive advertising hub, its exit from the European Union has impacted the entire European Communications industry. However, it has not proven thus far to be the catastrophe that so many feared it would become; in fact, it has even created new opportunities for Europe’s presence to grow. While the UK will undoubtedly remain a giant in the advertising world, Brexit may have provided more growth opportunities and fewer drastic changes than Europe expected.

Opportunities

The UK once served as the gateway to Europe, but now that it has severed its ties to the continent, it no longer maintains this advantageous status. In fact, hundreds of companies are relocating from the UK to the Netherlands in the wake of Brexit due to its geographical proximity, cultural similarity, and its excellent physical and digital infrastructure which have all given it a fantastic reputation among Brits [1]. This influx of British companies has provided an enormous opportunity which the Dutch government is seizing by adding British workers to its “high skilled migrants” criteria, making it easier for them to relocate [2]. Additionally, Amsterdam has allocated 30% of its salary tax for creative talent coming in from the UK [3] If other EU cities follow suit, advertising and other firms will be drawn to the appeal of the single market and initiate an advertising boom in the EU.

Challenges

The primary challenges that the industry will face as a result of Brexit are related to the free movement of people and labor; many British workers who have been living and working in the EU and have started families here will have to go through an application process in order to remain [4]. This complicates the lives of many workers and their families and could result in an outflow of British talent. Additionally, new VAT regulations for services and digital services will add extra hoops for EU advertising agencies to jump through if they are to conduct business in the same way as they did before Brexit [5]. These logistical challenges will make a difference in how advertising agencies across Europe operate post-Brexit, but they do not pose a fundamental threat to the industry.

Constants

Despite what many people feared, the industry’s technical operations will still be carried out without too much disruption. For example, data sharing between the EU and UK is allowed to continue under a June 2021 Commission Implementing Decision. The Decision states that “the United Kingdom ensures an adequate level of protection for personal data” according to previous regulations on the subject [6]. Since data sharing is such a core component of the advertising industry, the preservation of UK-EU sharing means that in key areas, business can and will continue as usual. Even though Brexit has created a few more obstacles, it has not had the disastrous impact on the EU’s advertising industry that many had expected.

Working in tandem with the Covid-19 pandemic, Brexit has created many waves of uncertainty in almost every sector, advertising included. However, even these two watershed events have not presented an existential threat to the industry. This does not mean that they have not created challenges; they have significantly reduced the free movement of people which worsens the current talent crisis in advertising. Obstacles such as applications to remain in an EU country to work and added VAT regulations are not going to topple European advertising. When it comes to the more important questions such as data sharing between the UK and EU post-Brexit, a legal framework has already been put in place to allow for continuity in this crucial business area between British and European companies. In addition to the absence of major threats, Brexit has even provided valuable opportunities to European cities such as Amsterdam to rise to the status of a global advertising hub. With all of this in mind, it is safe to say that European advertising is far from doomed and will continue to grow and evolve well into the future.  

Watch the first episode of Advertising Europe here:

Resources:

  1. https://www.kvk.nl/english/brexit/surge-in-brexit-companies-moving-to-the-netherlands/
  2. https://www.campaignlive.co.uk/article/adland-really-needs-know-brexit-deal/1706684
  3. https://www.gep.com/blog/mind/how-brexit-is-impacting-the-advertising-industry-in-the-uk
  4. https://ec.europa.eu/info/strategy/relations-non-eu-countries/relations-united-kingdom/eu-uk-withdrawal-agreement/citizens-rights/information-about-national-residence-schemes-each-eu-country_en
  5. https://www.gov.uk/government/publications/accounting-for-vat-on-goods-moving-between-great-britain-and-northern-ireland-from-1-january-2021/accounting-for-vat-on-services-between-the-uk-and-eu-member-states-from-1-january-2021
  6. https://ec.europa.eu/info/sites/default/files/decision_on_the_adequate_protection_of_personal_data_by_the_united_kingdom_-_general_data_protection_regulation_en.pdf

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