oversight

Government Expenditures for Advertising

Published by the Government Accountability Office on 1977-07-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             DOCUMENT RESU3E
02761 -   A1993061 ]   (4,~e=-'J

(Government Ependitures for Advertising]. LCD-77-434;   B-144618.
Jujy 12, 1977. 4 pp.

Report to Rep. Max Baucus; by Robert G, Rothwell (for Fred J.
Shafer, Director, Logistics and Communictions Div.
Contact: Logistics and Communications Div.
Organization Concerned: General Services Administration.
Congressional Relevance: Rep. Max Baucus.

         Total Government advertising costs have been obtained
by carrying out special studies or o:ne-time reporting. There is
no Government-wide definition of advertising and no central
location within the Government where such information can be
obtained. Findings/Conclusions: In fiscal years 1974 and 1975,
31 agencies spent about $189 million and $199 million,
respectively, for advertising. There is no requirement that
agencies identify avertising costs within their budgets.
Because advertising effectiveness depends on many factors,
including intended audience, evaluation is best viewed on a
program-by-program Pazas. Only a few such evaluations have been
done. The evidence indicates that the Army's advertising aimed
at recruiting an all-volunteer force has contributed only
modestly. (DJM)
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*.         Tne Honorable Max Baucus                                         JUL 12 1977
           Souse of Representatives
           Dear Mr. Baucus:
                In your May 20, 1977, letter, you asked that we examine
           how much the Government spends for television, radio, and
           magazine advertising. You also wished to know where these
           expenditures are accounted for in each agency's budget and
           whether this type of advertising is effective.
           GOVERNMENT ADVERTISING- COSTS
                Although .nforation in the form you requested is not
           available without surveying each agency and bureau, we have
           information on hand that may meet your needs. We answered
           a similar congressional inquiry in 1975 by obtaining total
           advertising costs from 31 agencies. This information shows
           the costs by type of media for commercially procured
           advertising. In-house costs, however, are not broken out.
                These 31 agencies spent $141.6 million for advertising
           by private agencies in fiscal year 1974 and estimated that
           $145.5 million would be spend in fiscal year 1975. In
           ardition, the agencies spent $47.5 million for in-house
           advertising in fiscal year 1974 and estimated $53.3 million
           for in-house advertising in fiscal year 1975. Therefore,
           these 31 agencies spent about $189 million and $199 million,
           respectively, for fiscal year 1974 and 1975.
                The expenditures and various types of media purchased
           from private agencies are as follows:


                                                                             LCD-77-434
                                1974            1975
                              (ac-ial)       (estimated)

    Television         $   4,929,300     $     9,596,000
    Radio                  2,006,400           2,428,70O
    Newspapers and
      magazines            30,168,400         30,487,800
    Posters, bill-
      boards, and
      displays             15,592,100         13,004,000
    Brochures and
      catalogs             25,673,000          31,676,000
    Films                   5,464,400           6,277,900
    Other                  57,757,700          52,029;000

        Total           $141,591i300         $145,499,400


     Other costs include items such das mili rv recruiting
costs which were not clearly reported by type of media used,
give-away recruiting items, visitors programs, advertising
research, and related travel costs.

REPORTING ADVERTISING COSTS

     There is no requirement that agencies identify adver-
tising costs within their budgets. Also, budgeting of these
costs varies by agency. For example, military recruiting
advertising is budgeted under Operations and Maintenance
for each of the military departments, and Energy Research
and Development Administration recruiting is budgeted under
Program Direction, Program Support. Energy Research anC
Development Administration public information is budgeted
under Supporting Activities, Program Support, and National
Institute of Drug Abuse publl information is budgeted under
Management and Information, Drug Abuse, Direct Program.
Further, there is no Government--w.de definition of adver-
tising and no central location within the Government where
this nformation can be obtained. Consequently, total
Government advertising costs have previously been obtained
jy special studies or one-time reporting, with the defini-
tions established for each report. This approach was used
in our aforementioned study.

     In July 1975, the Office of .Management and Budget
reported to the Chairman, House Appropriations Committee,
on the total Government contract advertising costs. This

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report covered all agencies with more than 100 employees.
The method of defining advertising costs for the Office of
Management and Budget study differed somewhat from our study
of the same period, in that we were more specific as to
what costs should be reported. As a result, the reported
costs differed. We reported advertising from private firms
at $141.6 million in fiscal year 1974, and the Office of
Management and Budget reported $128.8 million. Our report
also pointed out that some agencies had reservations about
identifying certain costs as advertising.

EFFECTIVENESS OF ADVERTISING PROGRAMS

     We discussed advertising effectiveness with an official
of the American Association of Advertising Agencies. Accord-
ing to him, advertising effectiveness depends on many factors,
such as type of presentation, timing, and media. Further,
each program is designed L£r a particular group.  This diver-
sity would likely cause the effectiveness to vary from program
to program. Consequently, we believe that
evaluation of Government advertising could an effectiveness
                                           best be viewed on
a program-by-program basis.

     We have been able to locate only a few evaluations of
the effectiveness of Government advertising programs. We
evaluated the effectiveness c the Army's advertising aimed
at recruiting persons or the all-volunteer forces (rAdver-
tising For Military Recruiting; How Effective Is It?"
FPCD-76-168, March 29, 1976).   In that report, we pointed
out that although the all-volunteer forces program had
been successful, all available evidence indicates that te
contribution of advertising had been modest at best. A
copy of the report is enclosed.

     In addition to our work, we are aware of two other
evaluations of advertising programs. Both are available
through the National Technical Information Service. They
are:

    -- "Public Awarenezs of a NIAAA Advertising Campaign
        and Public Attitudes Toward Drinking and Alcohol
        Abuse"  (Order Number PB244 143-SET).
    -- "Effects of Anti-Smoking Campaigns Aimed at Less
        hazardous Smoking"  (Order Number PB225 147/7).



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    We trust this information will satisfy your needs.
                               Sincerely yours,



                               Fred Shafer
                               Director

Enclosure




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