Slow Economic Growth WIll Pressure Advertisers To Maximize ROI

The world's richer economies, including the U.S. and the UK, can expect a decade or more of low growth. In the U.S., economic growth could be less than 2% annually “for decades to come.” Such low rates could, in turn, put added pressure on companies to maximize the return on their marketing and advertising budgets.

The forecast -- according to a new report from WPP consulting firm The Futures Company, issued this week -- says pressures on more advanced economies are contributing to falling productivity and squeezed margins, which will continue to push down demand and reduce the scope for investment.

Among the factors that are causing this squeeze on growth are aging demographics, the long-term shift toward services, increasing energy prices, high levels of consumer debt and greater inequality among consumers in advanced economies.

But perhaps the most counterintuitive factor cited by the report is the rise of digital technology, which has “stripped value out of economies.” The report estimates that digital networks have accounted for 60% to 80% of productivity gains in advanced economies since 1995.

“The broader effect of digital networks has been to expose national economies to much more competition than previously,” the report asserts. That has resulted in “suppressing middle income wages and removing swathes of middle-income jobs.”

Digital technology is credited with spurring innovation, which should help workers shift to more productive sectors of the economy, The Futures Company report states. However, “it’s hard to see at the moment where those new jobs will come from.”

The full report, titled "Succeeding in Low Growth Markets," can be found here.

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1 comment about "Slow Economic Growth WIll Pressure Advertisers To Maximize ROI".
  1. david michael rich from George P. Johnson Experience Marketing , February 18, 2013 at 9:20 a.m.
    It's well past time then that we all get further down the road with measurement of our marketing. It needs to be the "must have" of marketing, not the "nice to have if someone asks us what we've done with the money." The time to start getting serious about measurement isn't when we're finally asked by those above us what we're getting out of the spend, because then it's too late. Start now, be pro-active, know more about what's working and what isn't, what can be improved for higher performance and what needs to be eliminated. These actions are what will improve the perception and value of marketing and the people who run it.