If you thought advertising was only good for flogging a few extra cans of dog food or frozen corn to stressed mothers then you need to think again if the results of a new study are to be believed.
Rather than simply create an opportunity to use the toilet during your favourite TV shows, advertising drives economies creating a seven-fold effect for every dollar spent. It employs stacks of people and pays for media that wouldn’t normally be available.
That’s the findings of a new report by global accounting firm Deloitte and commissioned by the World Federation of Advertisers.
The report examined the collective media spend of 28 EU countries and found that in 2014 (when the most recent figures were calculated) some €92 billion ($A139 billion) was spent on advertising resulting in an estimated effect on GDP of €642.8 billion ($A912 billion) – nearly a seven-fold impact.
Media is also a good supplier of jobs in the EU, the report noted. Nearly six million Europeans work in the advertising and media industries and – as surprising as this may sound – people working in the industry were paid higher salaries than the average (€34,000 versus €22,000.)
The report noted: “Advertising matters for employment, innovation, culture and entertainment, and supports media plurality, which is fundamental to democratic freedoms. The benefits are pervasive and run through the fabric of society.”
It added: “Advertising is a vital economic engine that encourages competition, drives innovation in business and provides significant benefits to society by funding or part funding media services, from news to entertainment. Policy-makers should be mindful that ad restrictions have important economic, social, and cultural consequences.”
However, it came with a warning, too. Tougher regulation around advertisers collecting people’s data have been mooted throughout Europe which could result in “concern that the economic benefits of advertising could be diminished”. It also highlighted advertisers move away from traditional media into things like Facebook and Google should be of real concern to traditional publishers and media models.