Our industry can help save the nation's finances
Britain’s economy shrank by 0.3 per cent in the last three months of 2012. With the threat of a triple-dip recession on the horizon, it’s perfect timing for a report from the Advertising Association and Deloitte that claims that for every £1 spent on advertising in the UK, £6 is generated for the wider economy. Since annual ad spend hit £16bn in 2011, that equals an addition of £100bn to the UK’s gross domestic product.
Maria Miller, secretary of state for culture, media and sport, speaks exclusively to Marketing Week as part of our investigation into advertising’s role within the ailing British economy. She acknowledges that advertising has “a huge role to play in boosting the country’s economic recovery”.
At a time when brands are turning to data to better target their marketing, it’s interesting that Miller talks about creativity. She praises the talent in the UK that underpins the advertising industry. All agreeable to ad agency ears and egos, no doubt, but light on detail of what more the marketing industry can do to make a difference in terms of GDP.
Matt Barwell, consumer marketing and innovation director at Diageo Western Europe, says advertising can help grow the economy by expanding existing sectors and creating new ones. For example, the broadband industry has seen fierce marketing competition between providers Sky, BT and Virgin Media.
He argues that the more advertisers use marketing to highlight the benefit of broadband, more demand is created. As brands compete on price, it is driven down and the service becomes available to more people.
However, cynics might say the growth of new markets is a natural side effect of capitalism rather than a win for advertising. But others point out that advertising also promotes social and health causes that boost the public coffers by saving money as well as lives. A stroke awareness ad campaign is credited with getting 10,000 people to hospital more quickly; with the estimated payback to the UK of £26m.
The fact remains that during a time when marketing budgets and teams are under pressure, it’s good to talk about value. I’m happy to debate the figures of how much marketing and advertising adds to the UK’s finances; what is indisputable is that they do add true economic benefit to the nation.