Deloitte Access Economics has released Advertising Pays, a report for the Commercial Communications Council and the first time an econometric analysis of advertising’s monetary value has been undertaken in New Zealand.
The report found advertising is a significant driver of economic growth contributing – around $6 billion or 2.4% of GDP a year through a range of sectors, including Retail $816m; Leisure & Entertainment $588m; Food $566m; Automotive $526m; and Government Departments, Services & Community $383m.
Not only does advertising generate growth, but it supports jobs too. More than 44,000 New Zealand jobs are associated with advertising, including 12,000 directly employed in the advertising industry.
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.
- 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 Access Economics 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 more than $3 billion.
“Advertising contributes around $6 billion or 2.4% of GDP a year”
Commercial Communications Council ceo Paul Head said 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,” he said.
“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.”
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).
“Advertising employs 44,000 Kiwis.”
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 NZ Transport Agency Legend drink-driving campaign 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,” O’Mahony says.
“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.”
Advertising Pays was launched at an event last nigh featuring keynote speaker Sir John Kirwan talking about his role as a mental health ambassador and the positive impact advertising has made to mental health awareness.
“NZ ads in delivered $17 in sales for every $1 spent on the campaign.”
The report is available to download at www.commscouncil.nz
*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.
About Deloitte Access Economics
Deloitte Access Economics is Australia’s pre-eminent economics advisory practice and a member of Deloitte’s global economics group. www.deloitteaccesseconomics.com.au
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte’s approximately 200,000 professionals are committed to becoming the standard of excellence.
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