Benefits of Advertising
- Advertising provides consumers with valuable information about products and services, including price information.
- Advertising is a springboard for new products and services by encouraging innovation.
- Advertising eases entry of new businesses into the marketplace.
- Advertising fosters competition – and actually reduces the price of products. A fact confirmed by a Federal Trade Commission Study.
- Advertising funds the media – including the entertainment, news, and sports we all enjoy and rely on.
- Advertising helps fund minority points of view.
- Advertising stimulates sales – it stimulates the economy and it provides jobs and growth.
The ad broadcasters, print, outdoor, direct mail, commercial photographers, photocopying and duplicating, video production, commercial artists and graphic design, commercial printers, all are part of the advertising industries.
Advertising is a powerful engine that helps drive the economy of Louisiana. Advertising expenditures account for $88.6 billion of economic output or sales in Louisiana – that is 15.1% of the $585.3 billion in total economic output in the State. Sales of products and services that are driven by advertising help support 282,360 jobs, representing 14% of the 2 million jobs in Louisiana.
Every million dollars spent on advertising in Louisiana supports 59 jobs across industries throughout the state. Every direct advertising job also supported 61 other jobs across all industries. Each form of advertising, from print media and radio and television to the Internet, helps businesses efficiently communicate the benefits of their products and services to target audiences.
This profile illustrates the importance of advertising to the economy of Louisiana. It is drawn from the latest research in a landmark series of studies prepared for The Advertising Coalition by IHS Economics and Country Risk. IHS uses methodologies developed by Dr. Lawrence R. Klein, recipient of the 1980 Nobel Prize for Economics, as the foundation for this research.
The IHS research measures the impact of advertising spending by quantifying how much the spending stimulates sales, employment, value-added (contribution to GDP), taxes, and labor income. For example, while the agriculture and mining industries may have few direct advertising jobs, their combined economic sectors support many industries that do advertise heavily.
Louisiana’s economy and the U.S. economy are heavily affected by the health of the consumer sector. The consumer sector represents 68% of the U.S. economy and it continues to expand. For example, while the agriculture industry does little advertising, the food, manufacturing, and retail industries advertise heavily across the country. This creates consumer demand for a chain of products and services from sales of farm machinery to the shipment of agricultural products.
U.S. advertisers in 2014 spent $297 billion on advertising to stimulate consumer demand, and that spending launched a “multiplier effect” throughout the economy. Total advertising expenditures drove $5.8 trillion in total sales. This represents 16% of the $36.7 trillion in total U.S. sales attributable to advertising and means that every dollar of ad spending stimulates almost $19 in sales activity. Just as significant, the total impact of advertising on the U.S. economy represents 19% of U.S. GDP. Every million dollars that is spent on advertising supports 67 American jobs across a range of industries, and every advertising job supports 34 jobs across other industries. Labor income supported by advertising represents 17% of all personal and proprietor income in the U.S.
Source: AAF National