According to Marketing Week, a recent report from the Advertising Authority claims that for every £1 spent on advertising in the UK, £6 is generated for the wider economy that's making a £100 billion contribution to UK GDP.
Quoting from Marketing Week - Advertising Authority chief executive Tim Lefroy says: “That’s bigger than spending money on building new roads, railways or stations where the conversion factor would be one to four. Spending money on advertising will grow the economy, increase jobs and make things better in this country.”
It is all about generating demand for products but the report recognises a negative view of advertising is often more talked about than the positive role of wealth creation, exports and social benefits.
When the world wide economic crisis hit a few years ago, marketing budgets and advertising in particular were the soft targets for cuts because that is what has traditionally been the reaction. On the face of it there is no immediate disadvantage, only savings and a positive effect on cash-flow. Evidence suggests otherwise, for example research by Harvard Business School has shown that it is "essential to maintain marketing spending, even more so in a recession and to emphasise core values."
But the report while emphasising the economic case for advertising also homes in on data. "Digital expansion has brought with it an unprecedented amount of data, which if used responsibly can unlock immense value, but there are concerns that if the EU’s proposed data and privacy policies come into effect, further growth will be stalled." There is clearly great concern that proposed EU regulations if enacted into UK law, then growth in digital marketing could damaged.
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