Research by The Advertising Coalition finds advertising drives $7.1 trillion in US sales


New Study Shows One in Five US Jobs Are Supported by the Advertising Industry

WASHINGTON, May 25, 2022 /PRNewswire/ — New research validates advertising’s powerful impact on the US economy. A new study, commissioned by The Advertising Coalition and conducted by IHS Markit, found that advertising generates $7.1 trillion in the sales business and supported 28.5 million jobs in the United States last year.

The study found that the total impact of advertising and its multiplier effects accounted for 18.5% of US gross domestic product (GDP) and supported nearly one-fifth of all US jobs in 2020.

Moreover, these positive economic spin-offs are expected to continue to grow rapidly, rising to $9.5 trillion business activity by 2026. This would support 31.9 million national jobs, a 34% increase in business activity and 12% employment.

“This important study proves what we knew all along,” said ANA’s CEO. Bob Liodice. “The advertising industry is an engine of growth for the American economy and plays an unparalleled role across the country in sparking, supporting and stimulating the economic activity that keeps our communities vital and vibrant.”

The study was the first analysis of the economic impact of advertising by IHS Markit on behalf of The Advertising Coalition in seven years. The latest research has shown that the industry is driving $5.1 trillion in consumer sales and supporting 20 million jobs in the United States in 2014.

The current study examined advertising spending in the United States and the cascade of contributions to the economy, such as advertising to drive sales, purchases of goods and services along the supply chain, and the re-expenditure of salaries by employees in the advertising industry. The IHS Markit study was commissioned by The Advertising Coalition, an organization comprised of media companies and national trade associations representing advertising-focused members.

“Advertising is not a luxury, but an absolute necessity. Businesses large and small, national and local, depend on advertising to communicate with consumers, drive sales and growth. The IHS study demonstrates what we have known for a long time, namely that when companies succeed and grow, so does the dynamic American economy,” said Steve PachecoPresident and CEO of the American Federation of Advertising.

The research found that every dollar of ad spend supported nearly $21 sales, on average, and advertising helped generate $13.5 million of sales activity per minute. The study also found that for every million dollars spent on advertising, 83 American jobs were supported in a wide range of industries across the economy, with the average salary for advertising-supported jobs being $73,00012% above the national average.

“Advertising helps support the creation of quality journalism that keeps communities across America informed, healthy and vibrant,” said David Chavern, President and CEO of the News Media Alliance. “Advertising is essential for continued access to quality news and information.”

“Advertising spurs economic growth – that simple fact has always been true. As the country continues to recover from the economic impacts of COVID, lawmakers must do all they can to support this fragile recovery,” remarked Marla KaplowitzPresident and CEO, 4A’s.

“Recent research from IHS Markit clearly demonstrates the link between advertising and growth – and the link between fully deducting advertising as a business expense and the same.”

The study also looked at the economic impact of changes to the tax treatment of advertising, with advertising expenses currently being fully deductible in the year they occur. The study looked at how proposals to allow 50% of advertising expenses to be deductible in the year they occur and the remaining 50% to be amortized over periods of five and 10 years would have impacted the business economy in the years 2021-2026 if they had been adopted. in 2020.

Under a five-year amortization plan, 2.6 million jobs and over $680 billion commercial activity would have been unrealized compared to the untaxed forecast in 2021. According to a 10-year amortization plan, in 2026, there would be 1.6 million jobs and $490 billion commercial activity that would not be carried out due to the change in the tax treatment of advertising.

“America’s broadcasters keep our communities and our economy strong by connecting consumers to the products and services they need, while helping local businesses grow,” said the National’s President and CEO. Association of Broadcasters. Curtis Le Geyt. “As an integral part of the advertising industry, local radio and television stations strongly support policies that encourage businesses to advertise, which creates jobs and helps communities thrive.”

The IHS Markit study is available here.

Andrew Weinstein
[email protected]

SOURCE The Advertising Coalition


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