Economics: Advertising Expenditures

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About ad expenditures

Ad Expenditures wordleFinding information on advertising expenditures is problematic.  Snapshot data, or single data points, are not too difficult to find (click here for suggestions on where to look).  But if you need time series data for advertising expenditures ... this is likely to be difficult.

On this page, I'll attempt to explain the difficulties you may encounter in various situations:

Private companies

Data for a private company: 

Private companies have no obligation to disclose this nor any financial information, and mostly they choose not to. 

That said, if they are a consumer products company, you may find some data for their product(s) in Ad$pender (see the entry below for more information about what Ad$pender does).

About public company data

For public companies, you have two possible sources for data on advertising expenditures:  the company itself, and from a third-party data collector such as Kantar Media (their database is Ad$pender; please see below for more information about the database, and the issues involved in using it).  Here are the issues you must deal with regarding data from a company:

Data from the company itself:

Getting data from a company is problematic for a complex set of reasons, which all boil down to ...

The SEC requires disclosure of advertising expenditures only under certain conditions:

  • Advertising expenditures are a required disclosure item (i.e. mandated by the SEC) only when the total expenditures exceed a certain percentage of total revenues (~4-5 %).  In practice this usually means that you'll find this item only for companies that meet two criteria:
    • They derive most of their income from a single line of business (i.e. are not diversified)
    • They advertise their products directly to consumers
  • When the data are available, they:
    • Are often included (i.e. part of) in a broader category of expenses called "Selling, General & Administrative Expenses".  This can include many things in addition to advertising expenditures:  e.g. strike expenses, payroll and social security taxes, directors' fees and remuneration, commissions, lease expenses, and more.  Most of these extra items are either industry-specific or occur rarely.
    • Are available for all products/services that the company sells, not for a single product/brand
    • May have gaps:  if the total amount spent falls below the required disclosure percentage in a given year, you will find 'missing' data (in reality, not disclosed!)

Resources for data from the company:

There are two main databases in which you can get this:  Compustat (via WRDS, and Thomson One. It is a relatively complicated process for both.  PLEASE read the notes below!

Industry-wide data

Industry-wide data is usually collected only by trade associations or by market research companies.  The trade associations depend on the participation and cooperation of their membership for data; and what data they can/will make public varies a lot.  The data from market research companies usually costs a lot, and is unlikely to provide a long time series.

Here's one example:

Individual product/brand data

This type of data is usually only available in a database such as Ad$pender, which is produced by a company called Kantar Media (formerly Competitive Media Reporting).  Occasionally, trade associations will also collect the data, but they are subject to the cooperation of their member companies.  In any case, the data has the following limitations:

  • The data are not comprehensive.  Ad$pender monitors a defined 'universe' of consumer media only.  (~200 consumer magazines, ~200 newspapers, TV stations, radio stations, etc.)
  • The data are estimated.  Once the producer of Ad$pender has calculated how much advertising time (space) has been used, they estimate the cost of that time/space based on "off-the-shelf" advertising prices.

Before you click on the link below, please be aware that there are lots of issues with the Ad$pender database.  Please read all notes about the data ...

International country adspend

This resource is good for total advertising expenditures in a country, not for a foreign company.

To find out what ad spending is in a given country, try the database Passport GMID.  They'll have data for many countries (for some going back to 1983), for print, radio, TV, outdoor, cinema, and online advertising.  (It's obvious, right, that the data for online advertising does not go back to 1983?!?  That starts in the late 1990's, and primarily for developed countries.)

By the way, it's called adspend, all one word, in this database!

Compustat (via WRDS)

WRDS requires that you register using your email account.  Once you've done that, you'll receive an email message with a link to WRDS that will be valid for 24 hours, a 'day pass'. 

Because extracting the data requires many steps, I've made a short video on how to do so.  Below is a summary of the steps:

  1. Get day-pass for WRDS
  2. Go to the Compustat - North America dataset
  3. Go to either Fundamentals Quarterly or Fundamentals Annual
  4. In the data query form, do the following:
    • Step 1: Specify time period of data you want
    • Step 2: Specify what type of company identifier you will enter (use TIC for ticker symbols); enter the company identifier
    • Step 3: Specify the data you want to download; be sure to include something that will identify the company (especially if you're downloading data for more than one company!)
    • Step 4: Specify what format you want your data in (e.g. Excel, .txt, .csv, etc.), and download the data
  5. Look over the data for gaps!  Look at a company history or timeline to see if you can determine why there may be gaps ...