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

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  • Marco GAMBARO
  • Riccardo PUGLISI

Abstract

We match data on the daily newspaper coverage of a sample of Italian listed companies with Nielsen data on the monthly amount of advertising that a given company has purchased on a given newspaper. Controlling for newspaper and company fixed effects, we show that newspaper coverage of a given company is positively related with the amount of ads purchased on that newspaper by that company. We also find that coverage of a company is higher the day after a press release, but especially so on newspapers where more ads are purchased. This result on press releases is robust to controlling for ownership links between newspapers and companies, and –more generally- controlling for time invariant features of each company-newspaper pair, i. e. for (company × newspaper) fixed effects. Moreover, coverage is correlated with past day absolute return and trading volume, and this relationship appears to be steeper for those newspapers where more ads are purchased.

Suggested Citation

  • Marco GAMBARO & Riccardo PUGLISI, 2009. "What do ads buy? Daily coverage of listed companies on the Italian press," Departmental Working Papers 2009-36, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2009-36
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    Cited by:

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    2. 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.
    3. Blasco, Andrea & Sobbrio, Francesco, 2012. "Competition and commercial media bias," Telecommunications Policy, Elsevier, vol. 36(5), pages 434-447.
    4. Germano, Fabrizio & Meier, Martin, 2013. "Concentration and self-censorship in commercial media," Journal of Public Economics, Elsevier, vol. 97(C), pages 117-130.
    5. 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.
    6. 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.
    7. Adam Szeidl & Ferenc Szucs, 2021. "Media Capture Through Favor Exchange," Econometrica, Econometric Society, vol. 89(1), pages 281-310, January.
    8. 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.
    9. Strömberg, David & Prat, Andrea, 2011. "The Political Economy of Mass Media," CEPR Discussion Papers 8246, C.E.P.R. Discussion Papers.
    10. 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.
    11. 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.
    12. Friebel, Guido & Heinz, Matthias, 2014. "Media slant against foreign owners: Downsizing," Journal of Public Economics, Elsevier, vol. 120(C), pages 97-106.
    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. Campa, Pamela, 2018. "Press and leaks: Do newspapers reduce toxic emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 184-202.
    15. Ruenzi, Stefan & Focke, Florens & Niessen-Ruenzi, Alexandra, 2014. "A Friendly Turn: Advertising Bias in the News Media," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100497, Verein für Socialpolitik / German Economic Association.
    16. 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.
    17. 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.

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    More about this item

    Keywords

    Media bias; advertising; press releases; stock returns; Italian press;
    All these keywords.

    JEL classification:

    • K1 - Law and Economics - - Basic Areas of Law
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • N81 - Economic History - - Micro-Business History - - - U.S.; Canada: Pre-1913

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