Brexit: Initial thoughts on adtech impact

Louise Gordon-Jones in Advertising

in Advertising

Last Thursday the UK went to the polls on whether it should remain in the European Union, with the country voting 52% to 48% in favour of leaving. One week on, and whilst British politics hangs in the balance and the country begins to come to terms with its decision, ADTEKR looks at what some of the implications for the adtech industry might be and what you should be considering:

The ‘unknown’ – the chief disrupting factor at the moment is uncertainty. At this early stage we do not yet know exactly what Brexit will look like or what form it will take (for example, whether the UK will still have access to the single market or not). This article from Olswang provides a helpful summary of what Brexit options there are. The various options will inevitably have different outcomes and effects for a broad range of businesses and therefore it is important that business owners should monitor closely how events unfold in the coming months and years so that they can react and adapt quickly to any market change.

Data protection – EU law on data protection has developed over the years to become an onerous and far reaching set of rules. These are set to become even more onerous with the introduction of General Data Protection Regulation (GDPR) which is scheduled to come into force in May 2018. Whether the UK will need to implement the GDPR will depend on the UK relationship with the EU following Brexit negotiations. However, if the UK ends up not having to adopt the GDPR it is likely that the UK will still align domestic data protection law with the GDPR in order to be included on any EU ‘white-list’ so that data can be easily transferred to EU Members states and back. In that sense, the way adtech companies deal with data may not see any huge changes other than those changes already scheduled to come into force with the GDPR.

Market volatility – one of the biggest threats to business is the continued volatility in the financial markets. Market uncertainty is likely to create various knock on effects to the adtech sector. For example, advertisers could delay launching large ad campaigns which ad tech companies would have benefitted from. On the start-up side investment in new and growing adtech start-ups might dry-up as lenders and investors hold on to their capital.

Transparency – this is already a key topic in the adtech industry and, according to AdExchanger, there is likely to be increased focus on this subject in the digital media sector in the wake of Brexit. Advertisers are predicted to start scanning their ad budgets in more detail to see what is being spent and where.

Scaling – small and growing ad tech companies will be keen to understand how an exit from the EU will impact on the costs and complexities of scaling their start-up businesses across Europe. These were already challenges for young businesses when the UK was part of the EU and these are likely only to increase following an exit from the common market.

Talent – in the last few years London has thrived as a key player in Europe’s entrepreneurial boom. This has meant that adtech start-up talent from around the world, including Europe have re-located to the UK. The impact that Brexit has on the flow of talent will depend on what form Brexit takes. The UK may choose to retain the freedom of movement principle; alternatively a new visa system may be put in place to regulate the movement of persons within the EU. Depending on the outcome adtech start-ups might choose other start-up hubs such as Berlin over London in the future.

Clearly this is going to be a continuing hot topic for the industry and, more generally, for businesses in the UK. We at ADTEKR will be launching a new column focusing on the key issues in more detail over the next few weeks – watch this space.

Brexit: Initial thoughts on adtech impact was last modified: July 1st, 2016 by Louise Gordon-Jones