Over the past 30 years, many studies have
demonstrated that a country’s GDP strongly influences the amount that companies
spend on advertising. But few researchers have investigated the opposite
phenomenon—whether a company’s decision to increase its media budget can
produce widespread economic benefits. There is an even greater gap where
digital media, the newest form of advertising, is concerned. In addition to
having little information on the macroeconomic benefits of digital media, most
companies have yet to quantify how this form of advertising has influenced
To address these knowledge gaps, the authors of this report
conducted a macroeconomic analysis of the benefits of advertising on G20
countries, as well as a microeconomic analysis of digital media’s impact on 440
Belgian companies. The results revealed that advertising fueled about 15
percent of growth in GDP for the major G20 economies over the past decade by
generating new business. While some companies launched unsuccessful media
campaigns and did not recoup their costs, such failures were outweighed by the
companies with strong campaigns that increased sales, attracted new customers,
or improved margins. On a microeconomic level, introducing digital media to the
advertising mix helped companies increase their revenues, market share, and
profit margins to a greater degree than traditional advertising alone.
(Notably, digital media produced its effect by enhancing the impact of print
and broadcast ads, rather than by replacing them.).
Digital media also
turbocharged advertising’s effect at the macroeconomic level, provided that
companies channeled the additional revenue that it generated into job creation.
Given these findings, companies and governments should not view advertising
only as a business expense; it is also an investment that promotes
macroeconomic and microeconomic growth.