Alex Fenton
3 years ago - 6 min read
advertising is good for us

Advertising is good for us.


From the first day I entered an advertising agency, several summers ago, I’ve found it to be a dynamic and compelling business populated by some very driven people working hard to help clients achieve success in business. But as a business, advertising is often on the receiving end of bad publicity. It was refreshing then, to read that The Communications Council has tackled the issue head on by commissioning Deloitte Access Economics to measure ‘The Economic Employment and Business Value of Advertising’. The results are encouraging and should give all of us in the industry some ammunition the next time someone at a barbecue lets loose with a tirade, usually a moral one, against our business.

The following is a precis of some of the findings.


40 Billion dollar baby.


Advertising spending contributes about $40 billion a year to the Australian economy- that’s 2 per cent of the country’s gross domestic product. That’s more than the size of the accommodation and food services industry, which contributed a mere $38 billion to GDP.


Grow with ads.


Advertising helps bring businesses and consumers together. It is critical for the operation of a market economy. Annual expenditure on advertising is significant, worth $12.6 billlion in 2014, almost 1% of GDP.


Who’s spending?


The largest economic benefits of advertising are generated in the retail sector, worth $9 billion in 2014. Motor vehicle advertising is worth $4.6bn, finance and insurance contributes $3.9bn, real estate contributes $3.2bn, entertainment and leisure advertising is worth $2.9bn of the country’s GDP, while government and public sector spends about $1.7bn.


Ads lower prices.


The main way advertising benefits the economy is by promoting competition and lowering prices. Do you think Bunnings offer lower prices out of the goodness of their hearts? It also provides information to consumers, and helps buyers compare different products and services to make informed choices. Strong competitive forces are needed to lower prices.


Ads make stuff better.


Advertising increases competition in the market, and provides an incentive for businesses to be more innovative or efficient, to offer better products or services, or at lower prices. Everything gets better, from toothpaste tubes to mobile phones.


Ads create jobs.


In total, advertising is associated with the employment of over 200,000 people in the Australian economy. This includes direct employment in the ad sector and indirect employment in the supply chain. There are 56,000 employed directly in advertising; This is similar in size to the clubs industry and pre-school education sector, which employed 51,450 and 47,450 respectively over the same period.


Ads mean business.


Advertising is critical for business success in Australia, with the aggregate value of the top 100 brands estimated at $127 billion in 2015. The Deloitte report reviewed a series of high profile ad campaigns to understand the positive impacts for business metrics. Here are the top five insights;

  1. Advertising has a role to play in corporate strategy. It is increasingly important to ensure services and customer experiences deliver clear and consistent expressions of a firm’s brand.
  2. Creativity is important for connecting with audiences on an emotional level. Portraying the role of business through a human lens remains important for communicating the values behind a brand.
  3. Audiences thrive on a balanced diet of channels. Businesses should not disregard the role of traditional channels. The right mix will vary according to the strategic objectives of a business. Rarely will one channel – digital or otherwise – serve a brand’s best interests.
  4. Remember to systematically track brand perceptions. Brand health studies help to identify customer perceptions and can be used to track the outcomes of advertising efforts. They also provide valuable insights to inform other business areas.
  5. Don’t overlook the employees and suppliers in the audience. Advertising that is focused on a brand’s greater purpose and meaning can not only strengthen customer relationships, it can also have reinforcing effects on employee engagement, talent attraction and supply chain connections.


So, the next time you’re spinning snags over the Weber and you overhear a couple of blokes questioning the value of advertising, you can be smug in the knowledge that they are clearly mad men.