Advertising Pays - a report by Deloitte Access Economics
‘Advertising Pays’ quantifies the economic, employment and business value of advertising in New Zealand for the first time.
- Advertising is a significant driver of economic growth contributing around $6 billion or 2.4% of GDP a year
- Paid advertising expenditure was $2.4 billion in 2015 almost 1% of GDP, total expenditure is likely over $3 billion
- More than 44,000 New Zealand jobs are associated with advertising, including 12,000 directly employed in the advertising industry
Today’s launch of a report by Deloitte Access Economics for the Commercial Communications Council is the first time an econometric analysis of advertising’s monetary value has been undertaken in New Zealand.
Advertising contributes 2.4% to the country’s GDP a year, about half what international tourists spend here in the same period.
Advertising contributes $6 billion to the economy through a range of sectors including: Retail - $816m; Leisure & Entertainment – $588m; Food - $566m, Automotive - $526m and Government departments, services & community - $383m.
The Deloitte report found paid advertising expenditure was $2.4 billion in 2015, almost 1% of GDP. Total expenditure, taking into account revenue from the production of content, was over $3 billion.
Commercial Communications Council CEO Paul Head says the report is ground-breaking, proving the very significant contribution the industry makes to the NZ economy over and above what is actually spent on advertising.
“While the industry has lots of case studies about the effectiveness of individual advertising campaigns, this is the first time we have been able to quantify the importance of the advertising industry to the NZ economy at a macroeconomic level.
“The report proves that advertising is a key driver of economic growth and employment and contributes significantly to the growth and profitability of a wide range of industry sectors. As the title of the report says, Advertising Pays,” says Paul.
Advertising adds value through income generation and job creation with 44,000 people employed directly or in associated sectors.
- Direct employment in advertising; 12,412 (core and support advertising occupations)
- Indirect employment in advertising; 5,341 (supply chain including design, print, photography, travel, HR, legal)
- Media; 17,575 (newspaper/magazine publishing, TV, cinema, radio)
- Content creation; 8,846 (motion picture/video production and distribution, sports administration, sports people, music and sound recording, software publishing)
In addition to business benefits, advertising is an established and proven influencer of audience behaviour in areas such as road safety, public health and tourism. The report highlights that the ‘Legend’ drink driving campaign, commissioned by The NZ Transport Agency, is estimated to have saved 64 young driver lives over three years, saving the country $290 million.*
Deloitte Access Economics’ partner and report co-author John O’Mahony says the report is significant in that it highlights the value of the advertising industry to the New Zealand economy and proves the tangible business benefits advertising delivers.
“The report finds that award winning advertisements in New Zealand have delivered $17 in sales for every $1 spent on the campaign.
“Beyond the direct benefits to business, advertising also delivers a broader economic benefit, because it fuels competition, which drives innovation, quality service and lower prices for consumers,” says John.
Advertising Pays is being launched at an event tonight featuring keynote speaker Sir John Kirwan speaking about his role as a mental health ambassador and the positive impact advertising has made to mental health awareness.
*This figure relies on the assumption made by the Ministry of Transport that the cost of a single life in a drink driving crash is $4.54 million.