CANNES, France—When economic times are tight, as they're likely to be in the aftermath of Great Britain's decision to leave the EU, the financial health of marketing agencies is often a sign of things to come.
"It's actually a barometer in two ways," Y&R global CEO David Sable told Adweek in a chat at the Cannes Lions International Festival of Creativity. "Very often we're the first to be cut. So as companies begin to feel the pressure, the easiest thing to cut is their marketing dollars. And so we're very often at the front end of an economic decline."
Sable is not alone in his concerns about the potential instability posed by the U.K. "Brexit" vote. The CEO of Y&R's parent company, WPP, said today that the vote's result is "not good news, to say the least."
However, Sable also believes that agencies can be the first to benefit from eventual economic recovery and can be the sign of a return to stability.
"I think we're also an indicator of an economy coming back," he said, "because I think people feel it and they start to reinvest."