Articles

19.10.2010 Advertising has broad benefits in US

Advertising plays a major role in supporting the US economy and employment market, while simultaneously delivering direct benefits for brand owners, a study has found. Trade body the Advertising Coalition and consultancy IHS Global Insight have releaseda report assessing the importance of advertising to 52 industries, plus the government. Overall, it estimated advertising expenditure ultimately accounts for $5.8tr of the US's $29.6tr economic output, and maintains 19.8m of the country's 133.4m workforce. The $279bn annual investment in ads also generates nearly $20 of economic output for every $1 spent, and dedicating $1m to this area creates 69 jobs. Elsewhere, the study suggested each dollar of advertising outlay yields an average $8.77 in additional sales, exerting a "multiplier effect" as firms expand their efforts to meet demand.

Among the most obvious results of commercial communications are building brand awareness and helping corporations demonstrate the qualities of their goods and services. This was argued to "trigger a cascade" of related favourable consequences covering supply chains, consumer spending and the labour market. Further value is drawn from the cost effectiveness and efficiency of distributing information about prices, technology and design, knowledge hard to acquire via individual research. Moreover, the process encourages lower and less varied prices through stimulating competition, as well as accelerating the uptake of new innovations. These advantages initially boost manufacturers and retailers, alongside media owners, ad agencies, production houses and other enterprises concerned with the preparation of marketing materials.

B.L. 19.10.2010