Every euro spent on advertising generates €5.7 for economy - report

Every €1 spend on advertising generates on average €5.7 for the Irish economy, a new report has found that.

Advertising makes up almost two fifths (38 per cent) of all revenues of Irish media organisations, the study, which was released today, finds.

"It has a critical role in underpinning the media sector in Ireland, " Minister for Communications Pat Rabbitte said as he launched the report 'Advertising : An engine for economic growth'today.

The increasing involvement by international media in the Irish market means future media policy will have to be made with reference to international conditions, he said.

"Up to now little has been known about advertising's role as a stimulant for economic growth through its capacity to drive demand, spread innovation and foster competition," Alan Cox chief executive of Core media said. The report was prepared by Deloitte and s sponsored by Core Media, Google, IN&M and RTÉ.

According to the report €938m was invested in advertising and marketing communications in Ireland last year and advertising contributed at least €5.3bn to Irish GNP (Gross National Product).

It finds that advertising supports 30,000 jobs. Of these 7,000 are direct employees, 7,500 are jobs which are supported by advertising revenue (such as newspapers and radio). It says 15,500 jobs are across supply chains of creative industry and the wider economy. One such example it gives is the result of advertising Ireland as a tourist destination which increased in domestic tourism and supported new jobs.

The report also finds that advertising stimulates competition by supporting innovation. It says over 400,000 households would not have broadband if it were not for advertising of expansion campaigns and faster speed by operators.

Advertising enables the internet economy because most social media and online searches are largely funded by advertising and they generate most of the traffic to online sits, the report says.

Mr Cox said policy makers should take note of the “disproportionate impact” advertising has on the economy and urged the Government to consumer the benefits if incentivising business to advertise.

The study is the first of its kind about the industry in Ireland and uses a method and framework to assess the impact of advertising from the UK Advertising Association’s cross-country statistical analysis called Advertising Pays.