Apple has mysteriously stopped disclosing how much it spends on advertising, and it’s not entirely clear why.
The company’s latest annual report (10-K), filed with the Securities and Exchange commission in October, made no mention of its advertising expenses.
As analysts at Wells Fargo pointed out in a recent research note, that’s a shame as it was useful to track Apple’s advertising expense, and its ad spend as a percentage of revenue, over time.
The decision not to disclose ad spend for the full-year 2016 comes a year after Apple’s advertising expenses rose 50% to a record $1.8 billion in 2015.
This chart, courtesy of Wells Fargo, shows how much Apple’s advertising expenditure has grown since 2008.
So why has Apple stopped making its ad spend public? The company doesn’t say in the annual report.
In a section entitled “advertising costs”, Apple simply states: “Advertising costs are expensed as incurred and included in selling, general and administrative (SG&A) expenses.”
Logic would dictate that Apple’s ad spend hit another record high in 2016 and, because it was spending more on ad costs per sale, the company decided it would look better not to make this figure public.
However, Apple’s SG&A costs were down 1% year-on-year to $14.1 billion. In 2015, that figure — of which staff salary will make up a large proportion — had increased 19% year-on-year.
Apple says in the annual report (emphasis ours): “The decrease in selling, general and administrative expense in 2016 compared to 2015 was due primarily to lower discretionary expenditures and advertising costs, partially offset by an increase in headcount and related expenses.”
But that doesn’t quite tell the full story. While SG&A expenses were down year-on-year on a dollar basis, S&GA expenses as a percentage of overall sales were up one percentage point to 7%.
Wells Fargo’s analysts also point out that Apple ended 2016 with its lowest operating margin since 2009, which could be in part due to Apple seeing less leverage — or in other words, spending more ad dollars to drive total revenue.
Companies are not required to split out their advertising spend from their general SG&A expenses figure, and most don’t want to share that kind of data with competitors. Nevertheless, it’s unusual that Apple has suddenly stopped doing so.
Apple did not immediately return a request for comment.
Visit Markets Insider for constantly updated market quotes for individual stocks, ETFs, indices, commodities and currencies traded around the world. Go Now!