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Advertising's Century of Flat-Line Growth

The advertising industry has always held a special fascination because of its impact on our culture and our desires, a reality dramatized to great effect by such television series as thirtysomething and Mad Men. In the business world, the future of ad spending is an endlessly debated topic. Will new digital media kill old media, and if so, where will the ad dollars flow? What does megaconsolidation in the cable industry, powered by the merger of Comcast and Time Warner, mean for ad rates?

But in one sense, the advertising business is about as static and boring as they come. The industry has never grown in scale. Looking at data since the 1920s, the U.S. advertising industry has always been about 1 percent of U.S. GDP. It’s surprisingly consistent, mostly tracking between 1 percent and 1.4 percent—and averaging 1.29 percent. This is according to DB5, a media and marketing research firm that specializes in bridging traditional and new media.