The Effects of Advertising on Innovation, Quality and Consumer Choice

The Advertising Association is a federation of trade associations and professional bodies representing advertisers, agencies, the media and support services. Its Economics Committee commissioned Keith Boyfield to write a study assessing the role played by advertising in spurring innovation, quality and consumer choice.

As well as reviewing the latest academic and industry research into this area the study was based on a range of in-depth interviews with advertisers including Procter & Gamble and Unilever, and practitioners at advertising agencies such as WCRS and J Walter Thompson/Parintex in Poland.

The study examined three separate types of market: firstly, those markets where advertising was traditionally employed; secondly, those markets where advertising had previously been restricted for one reason or another, such as telecommunications; and thirdly, a national market where advertising was virtually non-existent for many years. The country chosen as an example of a brandless society was Poland.

The evidence detailed in the study demonstrates that advertising accelerates the speed at which innovation can be translated into commercial success. It helps create a longer term profit stream, which is in turn easier to protect. It also encourages innovation by helping new entrants circumvent barriers to market entry. Above all, it helps speed the payback on capital invested in new product development.

In publishing the study, Andrew Brown, Director General of the Advertising Association commented:

"This is a very useful and practical monograph. The case histories are easy to follow and make the study accessible to anyone interested in advertising and its effects.

The publication will make a valuable contribution to the Advertising Association's ongoing plans to generate a better understanding of advertising and the advantages that it brings to all aspects of our society".

Reviewing the study, Tim Ambler, Senior Fellow at London Business School observes:

"The link between innovation and advertising is not widely appreciated. While the UK is celebrated for creativity, it is not always so good at applying that creativity successfully in the marketplace. Innovation is not much use if no one knows about it.

Keith Boyfield brings lucidity and logic to this sometimes complex interaction and is to be congratulated on an outstanding report."