Every Euro spent on advertising results in a seven-fold boost to GDP, according to a new study.
The study Deloitte, also suggests that advertising account for nearly 6 million jobs across the EU and 4.6% of total GDP.
This is the first-ever EU-wide report to isolate the economic and social contribution of advertising.
According to Deloitte, advertising contributes to the economy through its ability to support competitiveness, providing consumers with information on products and services, and helps to increase their choice of goods and services.
This then drives innovation by incentivising businesses to create differentiated products and services, allowing them to out-compete their competitors not just in the EU but around the world.
The study also adds weight to the employment argument – with the 5.8 million jobs it creates equivalent to 2.6% of all EU employment (not including those working as advertisers).
“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,” said Stephan Loerke, CEO of the World Federation of Advertisers.
“Policy-makers should be mindful that ad restrictions have important economic, social, and cultural consequences. 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.”
ISBA, The Voice of British Advertisers, welcomes the findings of the new Deloitte Report, The economic contribution of advertising in Europe.
This study, for the World Federation of Advertisers (WFA), of which ISBA is the UK member, demonstrates the value of Advertising to the European GDP and puts a figure on it. Every advertising Euro spent is multiplied seven fold. The study found that advertising contributed nearly 6m jobs across the EU and 4.6% of total GDP.
“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. Europe without advertising would be poorer, less well informed and less competitive.” Deloitte Report 2017
Phil Smith, Director General of ISBA, the voice of British advertisers said: “The findings highlight that a healthy and vibrant advertising industry is vital to our economy. Advertising fuels competition, advertisers sell better products and create more jobs. In turn, advertising partially funds diverse news and entertainment media and pays entirely for many free online services we take for granted, like search and social media.
We believe European and national policy makers must assess the full range of implications when considering more restrictive advertising regulation.”
The new report looks at the:
• Economic benefits of advertising – 4.6% of GDP
• Employment benefits of advertising, providing 6 million jobs – 2.6% of EU employment without counting those working as advertisers
• Social Benefits, including funding our newspapers, magazines, TV, radio and online media
ISBA supports our partners in the WFA and across Europe in the media and in advertising agencies in calling for a moratorium on further restrictions on advertising to ensure that the overall impact of any new rules, including their unintended consequences, is fully assessed. The industry is concerned that the revised Audio Visual Media Services and the proposals for an ePrivacy regulation could create additional restrictions, hurting the European digital economy and reducing its potential to create local champions and more jobs.