A Wells Fargo analyst has noted that Apple has ceased to disclose its advertising spend in its latest 10-K annual report, instead bundling it into a more general category of ‘selling, general and administrative (SG&A) expenses.’ Apple has in the past always specifically disclosed its ad spend, notes Business Insider.
Apple last year increased its ad spend by a massive 50% to a record $1.8B. While the 10-K suggests that this year’s spend is lower by one measure, Wells Fargo suggests that might not be telling the whole story …
Put another way, Wells Fargo thinks Apple doesn’t want people to see that it’s having to work harder to maintain sales.
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.
The research note is speculative, so there may be other explanations, but it does seem to be a logical one. Apple had not responded to request for comment at the time of writing.
