Advertising contributes £100bn to UK GDP

Advertising fosters competition and innovation, says new analysis from Deloitte – as it attributes £100bn of UK GDP to advertising activity.

New analysis published today suggests that advertising is a vital enabler of the UK’s economy, underpinning £100 billion of GDP and playing a critical role in the high-growth digital and creative sectors.

Released today at the Advertising Association’s annual LEAD summit, the report has prompted calls from UK agencies, brands and media for Government to consider more closely advertising and marketing’s potential to support economic recovery and growth.

Commissioned by the Advertising Association and prepared by business advisory firm Deloitte, “Advertising Pays: How advertising fuels the UK economy” centres on econometric analysis of advertising’s effects on market efficiency, productivity, competition and innovation.

It finds that, on average, £1 of advertising spend returns £6 to UK GDP. Crucially, the model shows that GDP growth follows advertising investment, not the other way around.

“In an economy where 60% of GDP is rooted in household consumption, the means to bring products to market must not be forgotten,” said Tim Lefroy, CEO of the Advertising Association.

“Advertising is sharpening competitiveness and acting as a spur to innovation. This report should prompt fresh thinking both by industry and in Government in support of our role.”

As the news launched, over 300 business leaders from UK agencies, brands and media joined Secretary of State Maria Miller MP as she underlined the valuable contribution advertising makes to the UK economy.

How advertising pays – in numbers

• £100bn impact on total UK GDP – £1 in ad spend generates £6 for the UK economy
• £7bn in incremental benefit to UK e-commerce
• 550,000 jobs supported by £16bn annual advertising revenues
• £5bn value of internet services available free to consumers – search, social media, messaging (Source: Boston Consulting Group)
• £2bn in agency service exports.

Advertising’s Three Point Plan

1. Stimulate business to advertise and lower barriers to advertising and marketing investment
2. Boost UK capability and production
3. Tackle over-regulation that stifles investment and undermines confidence