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What do ads buy? Daily coverage of listed companies on the Italian press

Author

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  • Gambaro, Marco
  • Puglisi, Riccardo

Abstract

We match daily data on newspaper coverage of a sample of Italian listed companies with monthly data on the amount of advertising that a given company has purchased on a given newspaper. Controlling for time-invariant features of each newspaper and of each company – and for ownership links between companies and newspapers – we show that newspaper coverage of a company is positively and significantly related with advertising expenditure by that company on that newspaper. The magnitude of this correlation is quite large: when controlling for ownership links, a standard deviation increase in monthly ads expenditure (i.e. 75,000 euros) is on average associated with 8 additional articles per month mentioning that company. We also find that coverage of a company is higher the day after a press release, but especially in newspapers where more ads are purchased. This result on press releases is robust to controlling for time invariant features of each company–newspaper pair, i.e. for (company×newspaper) fixed effects.

Suggested Citation

  • Gambaro, Marco & Puglisi, Riccardo, 2015. "What do ads buy? Daily coverage of listed companies on the Italian press," European Journal of Political Economy, Elsevier, vol. 39(C), pages 41-57.
  • Handle: RePEc:eee:poleco:v:39:y:2015:i:c:p:41-57
    DOI: 10.1016/j.ejpoleco.2015.03.008
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    Cited by:

    1. Pannicke, Julia, 2015. "Media bias in women's magazines: Do advertisements influence editorial content?," Ilmenau Economics Discussion Papers 99, Ilmenau University of Technology, Institute of Economics.
    2. Friebel, Guido & Heinz, Matthias, 2014. "Media slant against foreign owners: Downsizing," Journal of Public Economics, Elsevier, vol. 120(C), pages 97-106.
    3. Petrova, Maria, 2012. "Mass media and special interest groups," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 17-38.
    4. Szeidl, Adam & Szucs, Ferenc, 2017. "Media Capture through Favor Exchange," CEPR Discussion Papers 11875, C.E.P.R. Discussion Papers.
    5. Dewenter, Ralf & Heimeshoff, Ulrich, 2015. "More ads more revs: A note on media bias in review likelihood," Economic Modelling, Elsevier, vol. 44(C), pages 156-161.
    6. Petrarca, Ilaria, 2014. "No news is costly news: The link between the diffusion of the press and public spending," European Journal of Political Economy, Elsevier, vol. 34(C), pages 68-85.
    7. Dewenter, Ralf & Dulleck, Uwe & Thomas, Tobias, 2016. "Does the 4th estate deliver? Towards more direct measure of political media bias," Working Paper 175/2016, Helmut Schmidt University, Hamburg.
    8. Graham Beattie & Ruben Durante & Brian Knight & Ananya Sen, 2017. "Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls," NBER Working Papers 23940, National Bureau of Economic Research, Inc.
    9. Blasco, Andrea & Sobbrio, Francesco, 2012. "Competition and commercial media bias," Telecommunications Policy, Elsevier, vol. 36(5), pages 434-447.
    10. Rafael Di Tella & Ignacio Franceschelli, 2011. "Government Advertising and Media Coverage of Corruption Scandals," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 119-151, October.
    11. Blasco, Andrea & Pin, Paolo & Sobbrio, Francesco, 2016. "Paying positive to go negative: Advertisers׳ competition and media reports," European Economic Review, Elsevier, vol. 83(C), pages 243-261.
    12. Germano, Fabrizio & Meier, Martin, 2013. "Concentration and self-censorship in commercial media," Journal of Public Economics, Elsevier, vol. 97(C), pages 117-130.
    13. Joshua S. Gans & Andrew Leigh, 2012. "How Partisan is the Press? Multiple Measures of Media Slant," The Economic Record, The Economic Society of Australia, vol. 88(280), pages 127-147, March.
    14. Ruenzi, Stefan & Focke, Florens & Niessen-Ruenzi, Alexandra, 2014. "A Friendly Turn: Advertising Bias in the News Media," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100497, Verein für Socialpolitik / German Economic Association.
    15. Serena Marianna Drufuca, 2014. "Information, Media and Elections: Incentives for Media Capture," Working Papers (2013-) 1402, University of Bergamo, Department of Management, Economics and Quantitative Methods.
    16. Prat, Andrea & Strömberg, David, 2011. "The Political Economy of Mass Media," CEPR Discussion Papers 8246, C.E.P.R. Discussion Papers.
    17. Casarico, Alessandra & Tonin, Mirco, 2018. "Pay-What-You-Want to Support Independent Information: A Field Experiment on Motivation," IZA Discussion Papers 11366, Institute for the Study of Labor (IZA).
    18. Ilaria Petrarca, 2013. "No news is costly news: the link between the diffusion of the press and public spending," Working Papers 16/2013, University of Verona, Department of Economics.
    19. Maria Battaggion & Alessandro Vaglio, 2015. "Watchdogs, Platforms and Audience: An Economic Perspective on Media Markets," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 209-228, June.
    20. Colin Porlezza, 2017. "Under the Influence: Advertisers’ Impact on the Content of Swiss Free Newspapers," Media and Communication, Cogitatio Press, vol. 5(2), pages 31-40.
    21. Dewenter, Ralf & Linder, Melissa & Thomas, Tobias, 2018. "Can Media Drive the Electorate? The Impact of Media Coverage on Party Affiliation and Voting Intentions," Working Paper 179/2018, Helmut Schmidt University, Hamburg.
    22. Pamela Campa, "undated". "Press and Leaks: Do Newspapers Reduce Toxic Emissions?," Working Papers 2015-10, Department of Economics, University of Calgary, revised 01 Jul 2015.
    23. repec:hrv:faseco:33078973 is not listed on IDEAS

    More about this item

    Keywords

    Media bias; Advertising; Press releases; Stock returns; Italian press;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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