Advertising drives 20% of US economy, states new study

A study commissioned by The Advertising Coalition and conducted by S&P Global Market Intelligence has, states a release,  “quantified the extraordinary impact of advertising on US jobs and growth, finding that advertising powered more than 20% of total US economic output while supporting 29 American million jobs last year.”

S&P Global Market Intelligence’s analysis — “The Economic Impact of Advertising on the US Economy” — found that advertising was responsible for $10.4 trillion in total US sales activity last year.  Among the key findings of the report:

• Advertising supported 29 million of the 158.1 million jobs in the US last year — or 18.3% of the total US workforce.
• Advertising supported a significant percentage of all jobs in all 50 states, ranging from 14.1% to 19.7% of all jobs, depending on the state.
• Total advertising spend and stimulated sales activity totaled $10.4 trillion last year, or 21.9% of the $47.5 trillion in total output from the US economy.
• Every million dollars spent on advertising supported 59 American jobs across a broad range of industries.
• The average salary supported by advertising was over $93,000 per year, a level of compensation 26% higher than the national average.
• By 2029, advertising’s impact on the US economy will increase to $12.7 trillion in sales activity and 32.1 million US jobs.

“Advertising is a robust catalyst that stimulates extensive economic activity across every state and every sector of the US economy,” said Bob Flanagan, Consulting Director at S&P Global Market Intelligence. “Our data-driven models traced how advertising drives spending by US business and households, stimulates supply chain activity and enhances income-based consumption. We quantified advertising’s broader economic impact on businesses, workers, and communities across the country.”

Overall, the study found that companies spent $491 billion on advertising their products and services last year, which directly stimulated $3.5 trillion in sales activity and another $2.8 trillion in indirect sales through the downstream suppliers to those advertisers. Another $3.6 trillion in sales was through employee spending from those direct and indirect ad-supported businesses.

The release states that while conventional wisdom might suggest that the economic benefits of advertising would accrue mostly to major ad hubs like New York, Los Angeles, and Chicago, “advertising had significant economic impacts across all 50 states due to sales it drives across the supply chain in every industry.”

In fact, the 17 states with the highest percentage of advertising-supported jobs were dominated by the Midwest, the West Coast as well as Maine and New Hampshire.