Investment in advertising generates eightfold return for Brazilian economy, Deloitte study shows
Every Brazilian real (R$) invested in advertising returns eight reais to the advertising economy, according to a new report highlighting the economic, social and business value of advertising in the country.
The Value of Advertising in Brazil was carried out by Deloitte and commissioned by CENP – Conselho Exexcutivo das Normas Padrão (Standard Norms Executive Council). The study was based on data from Kantar Ibope Media and CENP-Meios and found that investment in media last year, in the order of R$49 billion, was accompanied by an increase in GDP estimated at R$418.8 billion.
The study includes interviews with more than 40 advertising leaders, qualitative research, literature review on the subject, data collection, and analysis and construction of econometric models. It follows similar studies carried out in the United Kingdom Portugal, New Zealand and Australia.
“The multiplier effect of investment in advertising is already well known by both advertisers and scholars on the subject,” said Caio Barsotti, chairperson of CENP. “The study by Deloitte reaffirms this certainty and emphasises the multiplication factor in advertising in Brazil, even in a year marked by enormous challenges due to the tragedy of the pandemic.”
“Investing in advertising has always been a good deal,” said Daniel Queiroz, chairperson of Fenapro, the National Federation of Advertising Agencies. “When associated with an agency, the advertiser is able to build its brand, increase its sales, and sustain its market performance strategy.”
Positive impacts of advertising
Other positive impacts for the economy and society are pointed out by the Deloitte study. For example:
• Advertising finances the media, supporting freedom of expression, an important pillar of democracy.
• Advertising generates and sustains many jobs in various industries. In 2019, according to data from the Ministry of Economy, around 435,000 people had an employment relationship with segments directly or indirectly related to the activity.
• Advertising promotes culture, education, and entertainment, being the most important source of revenue for most media outlets. It also supports sports by sponsoring sporting events, athletes, and clubs. This is also true for cultural events.
• The activity stimulates competitiveness by offering options to consumers, informing prices and availability, presenting innovations and internationalising brands.
• It is also essential for advertising companies to build value for their brands, increase revenue and sustain their corporate strategies.
• Advertising content promotes the dissemination of information and influence for the adoption of new socially positive behaviours that maximise consumer welfare.
• Advertising investment is booming in Brazil: between 2001 and 2020, the compound annual growth rate of advertising investment was 4.5 per cent above inflation for the period.
For Mario D’Andrea, chairperson of ABAP, the study proves, in numbers, what the entity has been defending for years: “the enormous importance of advertising in generating wealth for the country. Advertising does not only benefit advertisers and vehicles, but it also brings enormous economic benefits to the Brazilian GDP, creates jobs, disseminates information. It is the industry that drives other industries.”
Clarissa Gaiatto, director of Deloitte, explained that the study commissioned by CENP is the most comprehensive survey on the impact of advertising on the Brazilian economy. “In the report, we compiled the most relevant economic data in the sector based on interviews with advertising leaders in Brazil, representing agencies, media outlets, sector entities, advertisers, marketing consultants, and research institutes. The result brings a rich and fundamental mapping for understanding the benefits of advertising, the challenges and trends in the sector, as well as consumer behaviour,” she added.
Download the full report here.
