U.S. advertising expenditure, 1998-2007

The U.S. Census Bureau’s Service Annual Surveys include data on advertising expenditure from 1998 to 2007. I’ve extracted and compiled these advertising data and compared them to widely cited figures from the Coen advertising expenditure dataset.

The Service Annual Surveys use statistically representative surveys of firms. The survey reports classify and aggregate firms’ revenues by firms’ industrial classifications. The Information and Communications Industries Revenue Dataset provides data for all revenue categories reported in the surveys from 1998 to 2007. One revenue classification is advertising revenue, which of course is advertising expenditure seen from the other side of the transaction.

The Service Annual Surveys have some advantages for measuring advertising expenditure. These data are based on a consistent, well-documented methodology administered by an independent, highly professional organization (the U.S. Census Bureau). The Coen advertising expenditure dataset is an extraordinary information resource spanning the years 1917 to 2007. However, it is closely linked to interested industry sources.  Moreover, the methodology underlying the Coen advertising expenditure dataset isn’t clear, probably has varied across time, and almost surely varies across advertising expenditure categories.

The Service Annual Surveys provide an insightful alternative categorization of advertising expenditure. Because the surveys are firm-based, they allow some separation of advertising media expenditure, e.g. payments to television stations for advertising air time, from advertising service expenditure, e.g. fees paid to advertising agencies for preparing and placing ads. The Coen advertising expenditure data, according to a Universal McCann source attribution, aggregate with advertising media expenditure “all commissions as well as the art, mechanical and production expenses that are part of the advertising budget for each medium.” Based on data reported in the Service Annual Surveys for 2004-2007, expenditure on advertising agencies, media buying agencies, and media representatives amounts to about 18% of expenditure on advertising media.

The Coen advertising expenditure total is about 30% larger than total advertising media and services revenue recorded in the Service Annual Surveys for 1998 to 2007.   Survey Annual Survey totals for media categories, marked up by the services/media ratio, typically are within plus or minus 40% of the corresponding Coen categories.   However, Coen direct mail advertising expenditure is more than three times the corresponding Service Annual Survey figure from 1998 to 2007.  The Coen “miscellaneous” advertising category rises sharply relative to the Service Annual Survey “other advertising” revenue from 1998 to 2007, and from 2004 to 2007 the Coen miscellaneous /other advertising figures are more than twice the Service Annual Surveys other advertising figures.

The comparison between the Service Annual Survey advertising data and the Coen figures points to difficulties in precisely estimating advertising expenditure.  Advertising time and space often are sold with a variety of price discounts.  Advertising time and space also are commodities commonly included in barter deals.  Discounts and barter make advertising expenditure difficult to estimate even thought a set of well-known firms dominate the supply of radio, television, and cable advertising opportunities.

The advertising data from the Service Annual Surveys, 1998-2007, along with the comparisons to the Coen advertising data, are available online in a browser friendly format as well as an Excel workbook.

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Comments

  1. commented:

    I really missed data telling how percentage every media get, for instance how online media are “stealing” traditional advertising spaces.

  2. Ryan J on
    commented:

    What would be included in “miscellaneous advertising”?

    • commented:

      For the Census-based data for 2007, the “other” advertising category is the sum of “Motion Picture and Video Exhibition / Advertising services” ($217 million) plus “All other advertising” [Includes NAICS 54187 (Advertising material distribution services) and NAICS 54189 (Other services related to advertising)] ($14,856 million), scaled up by the advertising services markup (19%). You can see this and similar calculations in the Excel spreadsheet. I don’t know what the “other” (miscellaneous) category includes in the Coen time series. As I mentioned above, the difference for other/miscellaneous between the Census and Coen figures is large.

  3. Bill Fellows on
    commented:

    Are advertising expenditure data available for 2008?

  4. commented:

    Specific figures for advertising for 2008 from the Census’s Bureau’s Services Survey are not yet available. But by looking at revenue by class of customer in the quarterly services survey, you can get a sense of some advertising trends through Q1 2009. See also Coen’s estimates for 2008.

  5. Francesco Turino on
    commented:

    Hi
    do you know if there is available a quarterly series for
    advertising expenditures?
    I was working on a paper on advertising and real business cycle fluctuation, and we use data taken from Ad summary, but the series is not complete… I mean, it accounts for 30-40% of Coen’s total advertising expenditures.
    Please, let me know
    thanks in advance
    Francesco

  6. commented:

    Sorry, the Coen data are not available on a quarterly basis.

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