Government Advertising Spending Tops $1.3 Billion Annually, GAO Report Reveals
The U.S. federal government continues to be a major player in the advertising sector, spending approximately $1.3 billion annually. The Government Accountability Office (GAO) has provided a comprehensive analysis of this spending, revealing important details about the agencies responsible for the largest ad expenditures, as well as the distribution of contracts to small and disadvantaged businesses.
Key Agencies and Spending Patterns
According to the GAO report, the Department of Defense (DoD), Health and Human Services (HHS), and Homeland Security (DHS) are among the top spenders, with the DoD consistently leading due to its heavy investment in recruitment campaigns. Public health messaging, such as COVID-19 awareness, has also contributed to significant ad spending spikes in recent years. In 2020, for example, there was a surge due to both COVID relief efforts and the census.
Jessica Lucas-Judy, Director of Strategic Issues at GAO, emphasized on the Federal Drive podcast that although recruitment and public awareness are key areas for federal ad spending, there is also substantial focus on informing citizens about disaster preparedness and access to government services. Overall, spending has grown steadily over the past decade, with minor fluctuations caused by large, multi-year contracts.
Minority-Owned and Small Business Participation
An important aspect of the GAO’s analysis is the participation of minority-owned and small businesses in federal advertising contracts. Over the past decade, about 14% of advertising contracts, representing $2.1 billion of the total $14.9 billion, were awarded to “specified businesses.” These include small disadvantaged businesses (SDBs) and those owned by women and minorities.
The report reveals that Hispanic-owned businesses accounted for 47% of the contracts awarded to minority-owned firms, followed by Black-owned businesses, which secured 21% of the total dollars. While this shows progress, the GAO noted that the overall share of contracts going to these specified businesses has remained relatively steady since the last review in 2018.
Interestingly, NASA leads in terms of the percentage of contracts awarded to small and minority-owned businesses, with 99% of its ad spending directed to these companies. On the other hand, the DoD, despite being the largest spender, directs only 6% of its advertising dollars to minority and women-owned firms.
Effectiveness of Advertising Spend
Despite the significant budget, there’s little data available on the effectiveness of federal ad spending. The GAO report noted that the current data does not provide insight into whether the funds spent by these agencies are reaching the intended audiences or achieving their desired outcomes. For example, while contracts may go to a minority-owned firm, it’s unclear if those firms are specifically targeting minority populations with the content of their ads.
Congressional Interest
Members of Congress have shown interest in the makeup of the companies receiving these contracts, particularly to ensure that small and minority-owned businesses are being included. According to Lucas-Judy, the GAO is open to further research on the effectiveness of the federal government’s ad spending, and future reports could provide a deeper dive into specific contracts, strategies, and objectives set by individual agencies.