Advertisement and Consumer Behaviour

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ADVERTISING AND ECONOMIC GROWTH

WORLD FEDERATION OF ADVERTISERS

UNION DES ANNONCEURS

ADVERTISING AND ECONOMIC GROWTH Doctorate Thesis in Economics submitted by Maximilien Nayaradou to the University of Paris 9 - Dauphine Synthesis and principal conclusions drafted by the author The English translation was prepared by and is the sole responsibility of the World Federation of Advertisers (WFA) UDA – UNION DES ANNONCEURS (French Association of Advertisers)

All rights reserved - Union des annonceurs Reproduction permitted conditional on inclusion of note “Advertising and economic growth – UDA” Legal submission 2nd term 2006

Doctorate Thesis in Economics
Thesis Director
Jean-Hervé LORENZI, Professor at the University of Paris 9 - Dauphine

Jury Rapporteurs
Xavier GREFFE, Professor at the University of Paris 1 Pierre KOPP, Professor at the University of Paris 1

Voting Members of Jury
Laurent BENZONI, Professor at the University of Paris 2 Jean-Marie CHEVALIER, Professor at the University of Paris 9 Gérard NOËL, Vice-President and Director General of UDA

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Preamble

Introduction

Investment in advertising and the economic stakes involved

Table of Contents
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The mechanisms by which advertising has an effect on economic growth

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Correlations between advertising spend and economic growth

Media space and advertising spend

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Conclusion

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Paradoxically, while advertising represents a major intangible investment on the part of companies, very little is known about its wider economic role. Economists, who have long been praising the virtues of R&D as a lever for economic growth, are practically silent on advertising spend, while the latter probably represents a greater amount (in the region of 700 billion euros per annum globally)! Addressing this omission has become a matter of urgency. Maximilien Nayaradou, the author of a doctorate thesis for the University of Paris-Dauphine, undertook this task under the guidance of his thesis director Professor Jean-Hervé Lorenzi, President of the French ‘Cercle des économistes’. There was one simple objective: to contribute to a better understanding by economic and political actors of the mechanisms by which company investments in commercial communications influence the economic growth of developed countries. Because his approach was interesting and original, the UDA (the Union des Annonceurs or French Advertisers’ Association), a body that had long been wishing to study this question, decided to actively support and finance his work. This work also benefited from the support and financing of the Ministry of Research, the World Federation of Advertisers (WFA) and the IREP (Institute of Advertising Research and Studies). This thesis, officially submitted in 2004, was graded “with great distinction, with the Jury’s congratulations”, the highest possible award. Interesting as they may be, academic works are often inaccessible to the ordinary reader, because they are voluminous (in some cases running to 750 pages). Accordingly, our request to Maximilien Nayaradou was to condense his work and to deliver the essential aspects of the conclusions to which it led in a “boiled down” format. However, should the reader wish to refer back to the original document – the thesis as it was initially presented – it is available upon simple request to the UDA. By introducing Maximilien Nayaradou’s principal findings in this document, our wish is to promote knowledge and understanding of the economic mechanisms essential for growth and to encourage researchers to pursue this subject in greater depth. Finally, it should be...
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