A newly released European report shows that each Euro invested in advertising brings 7 times higher benefits related to GDP, encourages innovation, insures the occupation of the work force and helps investments in important services.
“Value of Advertising” is an independent study made by Deloitte, which identified a multitude of benefits generated by advertising for global economy, when it comes of work places and in regards to civil society. This is the first report made at the entire EU level that isolates the economical and social contribution of advertising in generating economic growth within the Union.
The study was demanded by World Federation of Advertisers and supported by other partner industries and showed that advertising had a contribution to close to 6M jobs within EU and represented 4.6 of EU’s GDP.
Also, there were identified three key zones where advertising generated direct or indirect benefits for the European and EU citizens’ economy:
- Economic benefits – The report estimates each euro spent in advertising adds Euro 7 more towards GDP. As shown in the report, “the EUR 92BN spent on advertising in 2014 in the EU is estimated to have contributed EUR 643 billion to GDP, representing 4.6% of the overall EU GDP. Advertising contributes to wider economic growth through its ability to support competitiveness. It provides consumers with information on products and services, and helps to increase their choice of goods and services. This, in turn, 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.”
- Work force benefits: Advertising insures close to 6M jobs within EU, representing 2.6% of the entire Union’s work force. The jobs are distributed in 3 sections: people employed directly in the production of advertising (16% of the 5.8M total jobs supported by advertising, but those only refer to in-house ad production, therefore the actual numbers might be higher), jobs created in media and online businesses which are funded by advertising (includes journalists and content producers, people working in OOH or TV f.ex., all representing 10% of the 5.8M jobs; those jobs have a greater security then other sectors and higher average salary, therefor can be described as “quality jobs”), jobs created in the wider economy as a consequence of advertising (ranging from sales to supporting the ad business in industries such as hospitality. This area also includes roles created by the advertising-stimulated demand for products and services and accounts for 74% of the 5.8m jobs).
- Social benefits: Advertising offers personal and social benefits by financing or co-financing media services. It insures to citizens access to news, entertainment and communication for lower costs or even for free. The Euro 92M spent in advertising in 2014 financed directly different types of content.
Advertising is a vital economic engine which encourages competition, brings innovation in business and generates significant benefits to society by financing or co-financing media services, from news to entertainment. The political decision factors should consider the fact that restrictions imposed to advertising have important consequences from economic, social and cultural point of view
CEO World Federation of Advertisers
European ad industry demands a moratorium over the supplementary restrictions imposed to advertising to make sure the global impact of the new rules – including the unintentional consequences – is fully evaluated. The industry is preoccupied by the fact that Audio Visual Media Services and ePrivacy revised directives will create additional restrictions, which will disadvantage the European digital economy and reduce the potential to create more jobs and successful local companies.
The study – available here – was co-financed by Advertising Association UK (AA), Association des Agences-Conseils en Communication (AACC), Association of European Radios (AER), European Association of Communications Agencies (EACA), European Broadcasting Union (EBU), The Association of television and radio sales houses (EGTA), Interactive Advertising Bureau EU (IAB EU), Mainostajat Finland, Organisation Werbungtreibende im Markenverband (OWM), Union des Annonceurs (UDA), Union des Entreprises de Conseil et Achat Media (UDECAM), The World Federation of Advertisers (WFA)