Advertising as Economic and Social Development Factor in Russia

Advertising provides consumers with information about products, making their choice more conscious and thus increasing their welfare. Advertising helps increase sales which allows companies to maximize their profit, expand and grow economic activity. Advertising influence on consumers and companies is extremely wide, but what role does advertising play on the country level? Which aspects of national economy are influenced by advertising? Does advertising investments growth have impact on Russian economy and society? These questions, growing interest to advertising caused by digital-marketing development and ad spend growth both in Russia and in the world made this study particularly relevant. The aim of this research paper was to study advertising as economic and social development factor. As a result of the first stage of the study nomenclature in the research field was provided, advertising mechanisms and advertising market were described, and theoretical approaches to analysis of advertising influence on countries’ economy and society were gathered and summarized. Furthermore, based on existing models of advertising influence on economy and society and based on analysis of past theoretical and empirical research, the author proposed a new integral model of advertising economic and social influence. The second stage of the study included empirical research that allowed to determine particular fields of advertising influence on Russian economy and society and begin to evaluate its strength and directions. First of all, the author examined advertising investments influence on aggregate GDP in Russia. This part of the study was divided in two analysis stages. The first stage was based on economic and advertising data by years and Russia was studied as part of a group of countries formed by means of cluster analysis. As a result, a linear regression model was built that demonstrated that previous year advertising investments influence country’s GDP in the current year. The second stage was based on quarter data, which allowed the author to study the relationship between advertising spends and GDP in the short run for Russia. However, ambiguous results were obtained and therefore additional research needs to be conducted after more statistical data is gathered. Further parts of the research papers were devoted to in depth analysis of specific aspects of advertising influence. It was demonstrated how advertising investments help create thousands of hundreds working places in advertising industry itself and other spheres directly or indirectly connected to advertising. Furthermore, it was described how advertising industry contributes to the Russian tax system through VAT. Moreover, the research demonstrated that advertising supports the existence of various media by financing TV channels, internet companies and radio stations. The final section of the second part of the research paper describes people’s attitude towards advertising in Russia. Since the attitude seems to be mostly negative it is necessary to improve the situation in the respective sphere and the research paper provides possible solutions for this.