Submitted by: Ulbe Jelluma 05/01/2016
A Deloitte study shows the effect of advertising spend on the economy. The study - done in Belgium - indicates that the advertising spend in the country has a major impact on the GDP.
Advertising expenditures in Belgium total €2,2 billion. Deloitte calculated - on the basis of econometric modelling in various countries - that the contribution to the economy would be €13 billion, representing 4% of GDP. The advertising industry has therefore a multiplier of 5 on the economy. Making it a very effective tool in the national economy. Deloitte UK data from 2011 shows that the multiplier is even higher at 6.
The advertising sector and related sectors account for a total employment of 87.000 people. Employment in agencies is limited to less than 2000 people, about 11.000 advertisers are involved in marketing and communication and the largest group is defined as suppliers and other people depending on the salaries paid to the people in the ad industry.
The Press sector (newspapers and magazines) represents 31,6% of total advertising spend and 31% of total employment. Just behind the outdoor category it has the highest multiplier when comparing direct and indirect employment.
A broader definition uses the term creative industry, representing 4,8% of GDP. This definition includes also architecture, visuals art, video games and other sectors. These data are comparable with data from the UK. Although using a slightly different definition of creative industry the sector represents 5% of the UK GDP.
The study also refers to 7 other effects of the advertising spend:
1. Advertising spend has impact on innovation and differentiation, strengthens price competitiveness and encourages market growth
2. Advertising funds the media and the creative industries
3. Advertising spend supports employment
4. Advertising support the export of brands
5. Advertising spend enables the digital economy via the growth of ecommerce and sales in physical shops
6. Advertising’s contribution creates social and economic value
The above data shows the impact of the advertising and related sectors on employment and the economy.