Advertising spend as a percentage of total sales among Big Tech firms is declining as they aspire to greater efficiency in the deployment of ad budgets. This is according to WARC Media’s latest Global Ad Trends report, which analyses ad spend by eight tech firms (Alibaba, Alphabet, Amazon, Baidu, Meta, Microsoft, Netflix and Tencent).
While Big Tech firms spend vast amounts on ads in absolute terms, these platforms are also growing their revenues at a remarkable rate. This means that the Big Tech sector is investing a lower percentage of total sales in advertising – in 2021, this was 3.1%. In comparison, media & publishing is 5.8%.
This suggests that Big Tech businesses are able to operate with different rules and benchmarks than brands in traditional categories.
The notable exception is Facebook-owner Meta, which has boosted ad investment as a share of sales from 0.8% in 2017 to 2.5% in 2021 in an effort to combat reputational difficulties.
Key findings include:
Spend by just eight technology platforms – Alibaba, Alphabet, Amazon, Baidu, Meta, Microsoft, Netflix and Tencent – in 2021 totalled $46.6bn, accounting for 6.0% of all ad investment globally.
Ad investment by ‘Big Tech’ brands is growing faster (+49.4% in 2021) than categories such as media, retail and technology, and it accounted for 10.4% of global ad spend growth in 2021.
Advertising spend as a percentage of total sales amongst Big Tech firms is declining, as they aspire to greater efficiency in the deployment of ad budgets, with Meta being a notable exception.
In 2021, Amazon became the largest-spending advertiser within a 12 month period in history, after investing $16.9bn (up 55.0% year on year).