Advertising delivered $53bn boost to Australian economy in 2022, research finds

The Australian economy was $53bn larger last year, thanks to the advertising industry, a new report finds.

A recent NRMA Insurance billboard advertisement from creative agency Bear Meets Eagle on Fire

Communications Minister Michelle Rowland has pointed to the growing value and contribution of advertising to the Australian economy and labour market, following the release of a report from Deloitte Access Economics.

Ms Rowland told The Growth Agenda: “A robust advertising sector encourages business innovation, leading to better products, increased competition and more information, to the benefit of us all.”

The report was commissioned by peak industry bodies including Advertising Council Australia, the Australian Association of National Advertisers and the Media Federation of Australia.

Communications Minister Michelle Rowland. Picture: Supplied

It found that $17.7bn was spent on advertising in Australia in 2022. Spend has been on a relatively steady upward growth trajectory since 2000, with the exception of two noticeable dips – during the financial crisis of 2009 and the Covid-19 pandemic.

Advertising expenditure also contributed $53bn to Australia’s GDP in 2022. This number represents a $13bn or 12 per cent increase in economic impact since 2014, and it comprised 2.1 per cent of Australia’s total GDP last year.

Advertising is used to drive both commercial and positive social impact, and also enhances the value of brands, the report highlights. It revealed that the total value of Australia’s top 100 brands equated to $194bn in 2023.

Digital advertising now accounts for approximately 67 per cent of that $53bn figure. The digital advertising market has been the fastest growing part of the industry and this trend is forecast to continue between 2023 and 2027.

Advertising revenue also supports a range of industries that employ more than 90,000 people, the largest of which include free-to-air TV broadcasting, motion picture and video production, newspaper publishing and internet publishing and broadcasting, according to the report.

Advertising Council Australia chairman, group chief executive of The Monkeys and Accenture Song ANZ president, Mark Green

Chairman of Advertising Council Australia, chief executive of The Monkeys and president of Accenture Song ANZ, Mark Green, said that a growing body of marketing effectiveness evidence has helped strengthen the understanding of how advertising can be used as a lever for business growth across different media channels.

“The biggest shift in the industry has been in its commitment to proving the role of advertising and the science behind effectiveness, presenting a strong case for brand building versus tactical campaigns whilst also pivoting to media where audiences are spending more time, particularly digital and social media channels.”

The report found that the industry also shows promise in rising employment opportunities. It employs 153,400 Australians with more to follow, as the sector is growing by 5 per cent annually.

“The growth in jobs in advertising underscores its importance to the economy,” Ms Rowland said.

Advertising also helps consumers find out about and decide on which products and services are best for them, which in turn can help contribute to the health of the overall economy by aiding competition between businesses and organisations, the report highlights.

Partner at Deloitte Access Economics, John O’Mahony said: “Advertising makes businesses compete with each other on product, on price and more. It’s a powerful driver of competition, which means more innovation at lower prices.”

Partner, Deloitte Access Economics, John O’Mahony

He added that for these reasons, advertising should be acknowledged as a driver of economic growth for the broader business community and for any government looking to strengthen the Australian economy.

Economic uncertainty and recessionary fears have placed downward pressure on many businesses and their marketing budgets in economic downturns, the report shows.

Mr O’Mahony said at the launch of the report in October this pointed to a “lingering sense” among the Australian business community that advertising was a discretionary spend for businesses, and something that could often be the first to take a hit during an economic headwinds.

“We think that’s a mistake. And there is actually an opportunity to continue to invest during the cycle, and advertising can be used to support economic growth,” he said.

As advertising ultimately serves customers, and is increasingly digital, the industry must meet customers where they are located, and this includes both urban and regional communities.

In her speech at the launch of the report, Ms Rowland called attention to the Albanese government’s commitment “to narrow the digital divide”, referring to its investment in regional communications.

She told The Growth Agenda: “In an increasingly digital world, reliable connectivity is not a nice-to-have; it is absolutely essential. Broadband has changed the way we do everything, from remote work and education, to telehealth, to running a small business. Being digitally excluded means you’re not able to take advantage of the transformational benefits of connectivity.

“Significant barriers still exist for regional, First Nations and low socio-economic Australians, and there is a key role for the government to lead efforts – in collaboration with industry – to narrow the digital divide.”

Some categories, such as gambling advertising, also face regulatory pressures from the federal government in the near future.

Mr Green said that the industry had a responsibility to make sure the benefits of its product outweighed the negatives.

“If we step over the line, we should be rightly called out and corrective measures taken,” he said.

“Consumers will also vote with their feet. At the end of the day the benefits of advertising including driving down price, changing behaviour, championing social issues and boosting innovation and creativity are where our focus must remain.”