Advertising, “any paid-for communication intended to inform and / or influence one or more people” 1, is sometimes marginalised, seen as an unnecessary expense that companies could do without. It is put under the bracket of ‘creative’ work and can be viewed as an indulgent treat rather than a necessary investment.
Until now.
A new report from Deloitte and the Advertising Association, demonstrates that advertising not only contributes directly to the growth of the businesses that spend on it but, perhaps more significantly, is vital for the development of our economy as a whole. The headline is that, in sum, advertising gets you bang for your buck: £1 spent on advertising returns, on average, £6 to UK GDP, meaning that approximately £100 billion is added to UK GDP each year through the increased economic activity that advertising encourages. This makes for powerful reading indeed – and there is substance behind the numbers.
Fundamentally, advertising engenders demands for products and services – this is at its very core. As such, it is a key player in creating wealth. Furthermore, by actively encouraging price competition and transparent comparisons, the industry fosters a culture of innovation that feeds into the companies whose products and services are being advertised. In turn, this means better products and services and more spend. Brands are developed and recognition becomes catalysed, both at home and on foreign shores. With this, UK companies have the opportunity to grow, taking chunks of market share with them.
Indeed, there are certain industries that would struggle to exist without advertising’s helping hand. Television, publishing, technology, performing arts and many other areas within the media and creative sector rely heavily on the revenues that advertising brings. The fact that 29% of UK television revenues are fed by advertising spend is indicative of this point. Advances in digital technologies such as the internet are made possible largely through advertising activities: it provides funding for most websites, including social media platforms and search providers.
So who wins? We all do: businesses get their products and services to market quicker, consumers benefit from more choice and increased affordability, a culture of innovation and differentiation is fostered, and our economy progresses. Leverage advertising and excite growth – it is a simple as that.
Footnotes
1 Advertising Association Handbook (1983) by J.J.D. Bullmore
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