The stock market tanked on Friday in reaction to the UK decision to leave the European Union.
The Dow Junes Industrial Average fell more than 600 points (over 3%), with the major ad holding companies all down. UK-based WPP American Depository Receipts on the NASDAQ exchange were down 10%. Dentsu fell 12% on the Tokyo Exchange. Omnicom, Publicis, Interpublic and MDC were all down in the 5% range. Media company stocks were down as well.
The vote to leave triggered much discussion at the Cannes Lions about the implications for ad industry, particularly how the UK ad business might be impacted.
At deadline, some of the holding companies were still in the process of formulating responses.
But WPP CEO Martin Sorrel issued this statement:
“Very disappointed, but the electorate has spoken. The resulting uncertainty, which will be considerable, will obviously slow decision-making and deter activity. This is not good news, to say the least. The PM’s resignation clearly adds to the uncertainty. However, we must deploy that stiff upper lip and make the best of it. Four of WPP’s top ten markets are in Western Continental Europe and we must build our presence there even further. It just underlines the importance of implementing our strategy: fast-growth markets (BRICs and Next 11), digital, data - and horizontality, which ironically means getting our people to work together, not apart!”
Omnicom Group issued this statement:
“The result of the vote has certainly led to volatility in the financial markets and political turmoil. Our focus during this initial period of uncertainty will be on working closely with our agencies in the UK and Europe as they help our clients to navigate the changes in the marketplace. Over the course of time, we expect these uncertainties to be resolved and our agencies, clients and consumers will adapt as markets normalize.”
Jerry Buhlmann, CEO, Dentsu Aegis Network said:
“Today’s referendum was a surprise result for our business and the industry. There is likely to be a short period of economic uncertainty in the UK and these economic adjustments are supported by a resilient UK financial system. What is important now is we focus on building political and economic stability. This should be driven by strong leadership who are united in negotiating positive trade agreements, strengthening relationships with key international bodies and bringing the country together.
As a global business we have a strong UK operation and whilst it is significantly important to us it only represents 6% of our global revenue. We expect our business to prosper both in the UK and globally irrespective of this result.”
This story has been updated with additional holding company comment and stock trading information.