Advertising Pays: Unique insights into the role of advertising in the economy

According to the new report "Advertising Pays" produced by Deloitte, advertising is more than just a successful industry in the UK, it is an "Economic Fuel". Released on 31st January this year, the report highlights how every £1 spent on advertising increases the growth of the economy by £6. In real terms, this means that in 2011, the UK's total ad spend (£16bn) increased the UK economic activity by £100bn. The report was compiled upon request of the Advertising Association, to try and deepen the knowledge that people have of the many benefits brought by the advertising industry. Advertising is currently considered to be highly efficient in promoting competition, spurring innovation and connecting businesses to their consumers, but it is often overlooked when it comes to its potential to support economic growth. The report concentrates on 8 key areas which the advertising activity helps fuel: the economy, the markets, the media and creative industries, employment, exports, the digital economy and the social contribution. The model used by Deloitte to calculate the effect of adspend on the economy was built around factors such as GDP per capita, total hours worked, Investment/GDP – to essentially reflect a functioning economy, from which the effect of adspend can be calculated*. *The econometric model was calculated on the basis of 17 countries - Argentina, Australia, Brazil, Canada, Chile, China, France, Germany, India, Italy, Japan, Peru, Russia, Singapore, United Kingdom, United States and Vietnam -meaning the same exercise could be carried out across these 17 countries.