Digital vs. Traditional Advertising and the Recognition of Brand Intangible Assets.

This article investigates how different advertising channels—traditional, online display, and paid search—relate to the recognition and valuation of brand intangible assets in the context of mergers and acquisitions (M&As). Using proprietary Kantar data from 2010 to 2019 that decomposes advertising expenditures by media type, the study finds that target firms' spending on traditional and online display advertising is more strongly associated with both the likelihood of brand asset recognition and higher recognized brand values than paid search advertising. These findings are supported by positive investor reactions to recognized brand assets, particularly when driven by traditional and online display advertising. The research contributes to understanding the heterogeneous economic roles of advertising channels in brand asset reporting and offers implications for investors, managers, and standard setters regarding advertising disclosure and accounting treatment.