The Communications Council is to undertake a research report with Deloitte to attribute and calculate the value and contribution the advertising industry makes to the economy, because “people have lost sight of the power of advertising”.
The study, to be completed this year, aims to quantify the impact advertising has on the economy on a number of levels: to calculate how many people are directly employed in advertising, and indirectly as a result of the advertising industry; and to quantify the benefits advertising brings the economy at large – such as driving the digital economy, fuelling competition, promoting innovation and growing markets.
Two years ago, UK body The Advertising Association worked with Deloitte on a similar study to investigate the value of the UK advertising market. It calculated that the £16 billion UK brands invested in advertising annually translated into a £100 billion payback – so for every £1 spent on advertising, £6 was returned to the greater economy.
Tony Hale, CEO of The CommsCouncil, who replaced Margaret Zabel as head of the body in January, told AdNews: “It’s the type of info that any industry would like to have. The first thing is to quantify, but the other agenda is to re-establish the power of advertising.
“Over the last 10 years people have lost sight of the power of advertising and the power of good, strong creative. People get caught up in the sexy stuff like data and content marketing. That’s important, but so is the power of creative to drive demand and grow businesses – and that comes out of strong creative ideas,” Hale said.
“We want to remind people of the role advertising plays. Everyone talks about the parts and not the whole. The growth story is lost in the narrative. Advertising has always been about driving growth, creating new markets.”
As wth the UK report, the CommsCouncil hopes to arrive at a dollar figure for every $1 invested in advertising and its subsequent economic value – but Hale is cautious about promising specific results. It’s not the only attempt that’s been made to calculate what the value of advertising is to the Australian market.
A year ago, the Government’s Creative Industries Innovation Centre carried out a study investigating the value of the creative industries, and as part of that found the marketing and advertising industry contributes $7.2 billion to the economy in revenue annually and $3.2 billion to GDP. The report calculated that the combined creative industries –which include film, TV and radio, advertising and marketing, design and visual arts as well as architecture – contributed
$45 billion to GDP in 2011/12.
“What we hope to do is not just understand the commercial impact, but also the societal impact of advertising in Australia, such as reducing smoking, improving health and reducing road deaths,” said Hale.
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