Adspend drives growth in US sales activity

Expenditure on advertising will generate $9.6 trillion in additional US sales activity by 2026, over $2 trillion more than in 2020, according to a study by industry body The Advertising Coalition and research firm IHS Markit.

Why it matters

Advertising is a critical element of the national economy, driving corporate sales and providing jobs, both directly and indirectly. Some of its broader impacts include supporting a wide range of suppliers, and supporting media companies and journalism at the local and national level.

Takeaways

• In 2020, the study found, $7.1 trillion in additional sales activity was generated by $325.6 billion of adspend.
• That same year, fully $2.8 trillion in sales were directly stimulated by advertising, with a further $4 trillion attributable to indirect sales resulting from this activity.
• That includes money flowing through supply chains, and salaries for employees who then go on to buy consumer goods and services.
• While an estimated 551,000 people work directly in advertising and marketing, the study suggested the sales supported by ads support 28.5 million jobs, from a total workforce of 145.7 million.
• Adspend is pegged to hit $465.6 billion in 2026, helping power over $9 trillion in additional sales activity.

The big idea

"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.” – Steve Pacheco, president/CEO, American Advertising Federation.

Sourced from The Advertising Coalition