Research finds adspend a bulwark against recession
Wed 20 June 2012
As the G20 Heads of Government meet in Mexico, and with signs of a slowing global economy, research findings by McKinsey demonstrate the important role advertising can play in buffering the Australian economy against the worst effects of recession.
Advertising fuelled about 15 per cent of growth in GDP for the major G20 countries over the past decade because it generates new business (in some years the contribution was as high as 20 percent). Australia’s average GDP growth was 3.14 per cent in the decade between 2000 and 2010 and GDP reached $1.13 Trillion.
“This data should give pause to any company considering trimming their marketing spend heading into the 2012-13 financial year,” said AANA CEO Scott McClellan.
On a microeconomic level, introducing digital media to the advertising mix helped companies increase their revenues, market share and profit margins, contributing 16 per cent to profitability, 25 per cent to revenue growth, and 30 per cent to gains in market share. Digital media produced its effect by enhancing the impact of print and broadcast ads, rather than by replacing them.
“This highlights the important role marketers play in driving innovation, which leads to economic growth. Policies that restrict advertising freedom, especially in the rapidly emerging digital and social media space, will damage our economy and should be avoided,” said McClellan.
“Advertising as an economic-growth engine: The new power of media in the digital age” is available at: http://www.mckinsey.com/locations/belux/
For further information:
Chief Executive Officer
Australian Association of National Advertisrs
Phone: 02 9221 8088