The financial “benefits” of having ads in Leeds

Hi AdBlockers,

One argument that we hear a lot about why it is ok to have ads in the city is that “it brings money to the council”, so we decided to write a blog post debunking that myth. But before we get started, let’s tell you two of the things that came out from our research:

  • It is very hard to put numbers on the council’s costs associated with advertising
  • Still, by any measure that we can think of, ads cost much more to society than what they bring to the council

What does the council get?

Imagine the council owns a piece of land somewhere. If they want to get some extra revenue, they could rent it out to an advertising company (for example JCDecaux, ClearChannel, Global, etc), to install, say, a digital billboard. That company would then rent out the billboard, typically on a weekly basis, to a third party that wants to advertise their products.

So how much does the council get in total from advertising? About a year ago, we filed in a Freedom of Information Request to the Leeds City Council asking how much money was involved in the contracts that they hold with advertising companies. They initially declined our request, arguing that releasing that information would be detrimental to the ad companies and that “it [was] not in the public interest to unfairly disadvantage a company which puts resources into tendering in good faith”. After a lot of back and forth, they finally agreed with us that the general public would overall benefit from having that information, as that would allow us to make educated decisions about whether it is worth having ads in our city.

So they sent us the following table with the monetary value of the contracts for the year 2019, hiding the names of the ad companies:

OrganisationMinimum guaranteed rentRevenue shareTotal
A £ 240,000 £ 113,000 £ 343,000
B £ 60,000 £ 120,000 £ 180,000
C0 £ 27,000 £ 27,000
D0 £ 25,000 £ 25,000
£ 575,000
Contracts between the Leeds City Council and ad companies.

So there you have it. The Leeds City Council got a bit over half a million pounds for having ads on their land in 2019. Note that this does not include staff costs. If, for example, the contract says that the ad company has to take care of the plot of land, this would also save some money to the council, since they won’t have to do it themselves.

It’s also worth mentioning that some of the infrastructure in the city (such as bus stops for example) are actually managed by the West Yorkshire Combined Authority. We sent another Freedom of Information request to the West Yorkshire Combined Authority asking for their advertising budget. They told us that in the two-year period covering 2019-2020 they received £1.3 million, or £ 650,000 per year on average.

Some people have argued that ads generate consumption that then benefits the wider society. For example, if you see a car ad and that makes you buy a car, the car company will increase its revenue. And that might be true for big companies that can afford to spend several hundreds of pounds a week to rent paper billboards, or thousands for digital ones. But that is certainly not the case for local businesses, which are negatively affected by big ads as AdBlock Bristol shows in this post.

What does it cost us?

This is the difficult part. You would think that with ads being so omnipresent, someone would have made a good cost-benefit analysis of them so that our policy makers can make an informed choice about whether to have those ads in our cities. Well, if there is one, we have not found it.

There are numbers on the direct cost that some products have on society however. For example, the health damage from cars has been estimated to cost £76 million to the city of Leeds, and the economic and social costs of alcohol-related harm are estimated to be a staggering £438 million. If we only count these two we get to about a billion pounds. Obviously, ads are not the only reason people consume those products, but if we assume that they account for just 0.1% of sales, that already means that their cost outweighs what the council gets.

If you buy a car because of how it was advertised, you will generate air pollution, which is responsible for more than 5% of deaths in the UK. What is the cost of that? And your car would exhaust greenhouse gases contributing to the climate crisis, just as most advertised products driving consumerism. How do we factor in the cost of extreme weather events resulting from climate change? And even more complicated, how do we quantify the impact of car ads on car culture? How much of our car dependence results from us being bombarded by car ads for most of our lives to the point that we just can’t imagine life without owning a car? (Note that we are by no means saying that people should not have the right to own a car, but rather that the impact of cars should be evaluated before allowing them to be advertised, just as it was done with tobacco).

Having ads is not worth it

Local businesses do not benefit from big ad infrastructure because they can’t afford to use it. At the same time, we as a society spend much more money fixing the issues created by some ads than what Leeds City Council gets from ads in the first place. So the whole argument that ads are necessary because they bring in money does not hold.

But advertisement is so embedded in our society that it is very hard to imagine it in a form that is not detrimental to our well-being. In order to move forward, as a first step, we must demand from our policy makers that

  • just with any other development, the negative impacts of ads are factored in when allowing for new ad infrastructure to be developed
  • a ban is put immediately on all ads for which the social cost is so overwhelmingly larger than the benefits. Examples of such products include junk food, gambling, alcohol or high carbon products.

The COVID vaccine was not allowed to be used before scientific studies could confirm that its benefits outweighed the potential costs. Ads should be treated no differently. Companies should not be allowed to advertise their products until we know that doing so is beneficial for all of us. Until then, we’ll keep fighting for the wellbeing of local residents.

Featured image from AdBlock Bristol

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