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Ad industry seeks halt on EU restrictions

News, 16 January 2017
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EUROPE: Advertising delivers a range of benefits – economic, employment and social – to European economies, according to a new study, and industry bodies have used its findings to call for a pause in the flow of restrictions proposed by the European Commission.

The Value of Advertising, an independent study by consulting firm Deloitte, commissioned by the World Federation of Advertisers and other industry partners, used econometric modelling to calculate that every euro spent on advertising adds an additional seven euros to GDP.

This means that the €92bn spent on advertising in 2014 in the EU would have contributed €643bn to GDP, representing 4.6% of the overall EU GDP.

Further, advertising provides almost six million jobs, directly and indirectly, in the EU, equivalent to 2.6% of all EU employment.

In addition to those employed directly in the production of advertising (16% of the total), there are jobs in media and online businesses funded by advertising (10%) while many more (74%) are created in the wider economy in roles supporting the advertising business and in roles created by the advertising-stimulated demand for products and services.

The study also highlighted how EU citizens benefit from news, entertainment and communications tools, including email and social media, at a reduced cost or even for free as these are directly funded by advertising expenditure.

"Advertising matters for employment, innovation, culture and entertainment, and supports media plurality, which is fundamental to democratic freedoms," said Stephan Loerke, CEO of the World Federation of Advertisers.

"The benefits are pervasive and run through the fabric of society," he added. "Policy-makers should be mindful that ad restrictions have important economic, social, and cultural consequences."

Which is why the European ad industry is calling for a moratorium on further restrictions on advertising to ensure that the overall impact of any new rules, including their unintended consequences, is fully assessed.

In particular, the industry is concerned that the revised ePrivacy directive, coming on top of the EU General Data Protection Regulation, will damage the online user experience with a subsequent impact on the online advertising market, leading to reduced advertising spending and threatening the funding of free online services and content.

Data sourced from WFA; additional content by Warc staff

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