Advertising is a driver of the economy. In March 2012 McKinsey & Company released a report “Advertising as an Economic Growth Engine” that found that advertising expenditure (adspend) could increase the rate of economic growth of a country by 15%. On the basis of the McKinsey research the greater the adspend as a proportion of GDP the greater the rate of growth. This has been confirmed by other research. It is a well-known truism that companies that spend a significant proportion of their total income on advertising will grow faster than those who don’t. The same is true for individual countries – hence the need for Governments to encourage rather than restrict advertising.
Significantly the report also found that adspend has a multiplier effect –“advertising contributes significantly more to economic growth than its share of spending.”