Primetime: Amazon is now the largest advertiser in the world
Ad Age World’s Largest Advertisers, a ranking of the 100 largest donors, will serve as the basis for marketers and marketing activities ahead of COVID-19 and a global recession in 2019.
The 2020 balance sheet for marketers will only become clear after companies release their financial results in the first few months of 2021.
But 2020 ad spend numbers for top marketers will be depressed – with the exception of a few advertisers who have increased spending to capture market opportunities amid the coronavirus pandemic.
Insurance marketer Progressive Corp. for example, its ad spend increased by 20% in the first nine months of 2020. Progressive’s most recent quarterly registration filing states, “We will continue to invest in advertising as long as we have sales at a cost below the maximum amount we are willing to spend to attract a new customer.”
Packaged goods marketers, benefiting from consumer supply loading and increased consumption during the pandemic, continue to invest money in advertising. Colgate-Palmolive Co. increased global ad spend by 10% in the first nine months.
However, increasing income does not necessarily lead to increased spending. Netflix revenue rose 25% in the first nine months, but the streaming service cut marketing spending by 17%, “mainly due to a $ 327 million decrease in ad spend,” according to a Netflix filing.
Alphabet, the parent company of Google, saw revenue increase 8.5% in the first three quarters, but cut advertising and advertising spend by $ 718 million “as we cut spending and paused or rescheduled campaigns and some events COVID-19 switched to pure digital formats, ”the company announced in a file.
Amazon has succeeded in the pandemic, with global net sales increasing 35% in the first nine months of shipping its goods to consumers. But even for a marketer like Amazon, that doesn’t necessarily lead to increased advertising and advertising spending.
The retailer’s marketing spend rose 15% in the first nine months, mainly due to increased costs for staff involved in marketing and sales activities, “partially offset by lower spending on marketing channels as a result of COVID-19,” Amazon said in a statement Filing. The company said it expects “marketing costs as a percentage of net sales” to continue to be positively impacted by COVID-19 through at least the fourth quarter of 2020.
Amazon is one of 13 internet-centric companies in the Ad Age top 100 ranking of the world’s largest advertisers. Internet companies as a group have been an overwhelming part of the growth in ad spend in recent years, but that was not the case in 2019. Internet companies increased global advertising spending by a total of 1.2% in 2019 – not far from the 0.9% growth for the remaining 87 companies in the ranking.
The shrinking ad growth for internet companies is mostly related to China, where the economy last year grew the slowest since 1990. Among the 13 internet companies in the ranking, three marketers cut their spending: China Ventures Ant Group, Baidu and Tencent. Ant, which operates the digital payment platform Alipay, cut advertising and advertising spend by 66% in 2019.
Naturally, spending at another Chinese company, internet retail giant Alibaba, increased 35%. But as a group, the four Chinese internet companies in the top 100 cut their spending by 27% last year. The remaining nine non-Chinese internet companies in the ranking increased their spending by 15%.
Among the world’s largest advertisers of the advertising age, internet companies topped the list of companies with the strongest increases in spending in 2019: Facebook (plus 43%), Alibaba (plus 35%) and Amazon (plus 34%).