After the storm, ad spending is on the rebound: Ad Age Leading National Advertisers 2021

The Leading National Advertisers in 2020 sliced spending with the second-sharpest cut since Ad Age began producing its annual report on marketers in 1956. But amid the pandemic and a brutal but short recession, nearly half of the top advertisers actually increased spending. The full-year outlook for 2021 is bright: U.S. ad spending is on track to break new records with a reinvigorated economy and pent-up demand from consumers with unmasked optimism. Download the Ad Age Leading National Advertisers 2021 Executive Summary, a PDF with key facts and stats from Ad Age’s 66th annual report on marketers and marketing: It’s not a surprise to see advertisers boost spending in good times. But a closer look at spending during the dark days of 2020 offers clear evidence of how marketers embraced the power of advertising despite pandemic, economic lockdown and uncertainty. The top 200 U.S. advertisers reduced ad and marketing services spending in 2020 by 6.2% to $165 billion. The top 100—the true blue chips of brands and budgets—slashed spending 7.5%. Last year marked only the sixth spending decline for the top 100 in the 66 years that Ad Age has produced the LNA report. Previous drops were -0.4% in 1970, -3.9% in 1991, -1.3% in 2001 and, during the Great Recession, -2.7% in 2008 and -10.2% in 2009. But the ad market demonstrated its resilience in 2020 as nearly half of major advertisers increased spending. Among the top 200 advertisers, 93 increased ad spending. Among the 100 biggest advertisers, 42 boosted spending. Downtime: Historic declines in Ad Age Leading National Advertisers spending Ad Age has produced the Leading National Advertisers report every year since 1956. The top 100 U.S. advertisers cut spending in six of the past 66 years. Last year's spending drop—down 7.5% for the 100 biggest advertisers—was the second-sharpest decline—behind a 10.2% plunge in 2009 amid the Great Recession—since Ad Age began the report. 1970 -0.4% 1991 -3.9% 2001 -1.3% 2008 -2.7% 2009 -10.2% 2020 -7.5% Source: Ad Age Datacenter. Based on total U.S. ad spending for nation's 100 biggest advertisers. Want to dig deeper? Subscribe to Ad Age Datacenter to access the complete Ad Age Leading National Advertisers 2021 report online. AdAge.com/getdatacenter Ad Age Datacenter subscriber content includes: Figures in this report show estimated U.S. total ad spending in 2020 vs. 2019 based on Ad Age Datacenter’s ranking of the top 200 advertisers in 2020. The top 200 list changes each year as companies enter and fall off the ranking. There were 20 companies in the year-ago top 200 ranking that fell off the new ranking because their ad spending dropped below the new No. 200 cutoff ($206 million). Ad spending for those 20 marketers tumbled about 40% in 2020. That group included seven travel firms—cruise lines, airlines, hotels and travel service Tripadvisor—whose combined spending plunged 54% amid the pandemic. Three other marketers left the ranking because they were acquired by other top 200 advertisers: Dunkin’ Brands Group, bought by Inspire Brands; Credit Karma, bought by Intuit; TD Ameritrade Holding Corp., bought by Charles Schwab Corp. Meanwhile, 23 marketers that entered the new top 200 ranking collectively increased their 2020 U.S. ad spending by about 31%. That group included 14 internet-centric marketers whose ad spending surged about 44%. There’s good reason to be optimistic about the vitality of the ad business. While many companies cut spending during the pandemic, others stepped up spending to take advantage of market opportunities. Many of those companies are in a good position to boost their spending going forward. And many companies that fell off this year’s ranking—most notably travel companies—are likely to reemerge as major advertisers as markets recover. Given that hopeful view about returning and emerging advertisers, maybe it’s not a surprise that WPP’s GroupM expects U.S. advertising to break new records in 2021—and 2022, 2023, 2024, 2025 and 2026. More takeaways from the report: Amazon is No. 1 Amazon topped the ranking for the second year in a row based on estimated U.S. advertising and promotion spending of $6.8 billion, but the online retailer’s spending dropped slightly even as sales surged during the pandemic. Amazon trimmed stated worldwide spending by 1% while net sales rocketed 38%, marking only the fourth year that the company cut spending, according to Ad Age Datacenter’s analysis. Amazon is now the nation’s most-advertised brand based on a narrower definition of 2020 measured-media spending, displacing Berkshire Hathaway’s Geico. Nos. 2 through 5 held their positions Comcast Corp., AT&T, Procter & Gamble Co. and Walt Disney Co. kept the second through fifth slots based on estimated total U.S. spending. Nine of the 10 biggest advertisers on the ranking a year ago remained in the new ranking’s top 10. Walmart moved into the top 10, displacing General Motors Co. Ad Age Leading National Advertisers: 10 biggest spenders Ranked by total U.S. advertising spending in 2020. Dollars in billions. Rank Marketer Total U.S. advertising spending 2020 1 Amazon $6.8 Estimated advertising and promotion spending 2 Comcast Corp. 5.2 Estimated advertising, marketing and promotion spending. Estimate based on a revision to Ad Age's spending model 3 AT&T 4.8 Estimated ad spending 4 Procter & Gamble Co. 4.7 Estimated spending on advertising plus other marketing costs. Year ended June 2020 5 Walt Disney Co. 3.2 Estimated ad spending. Year ended October 2020 6 Verizon Communications 3.1 Ad spending 7 Charter Communications 3.0 Marketing expenses 8 American Express Co. 2.9 Estimated marketing and promotion expenses 9 Alphabet (Google) 2.5 Estimated advertising and promotion spending 10 Walmart 2.4 Estimated ad spending Source: Ad Age Datacenter. Numbers rounded. Ranking of top 200 advertisers: AdAge.com/lna2021 Database with ad spending, brands, profiles, executives and agency rosters for 100 biggest advertisers: AdAge.com/marketertrees2021 About LNA 2021: AdAge.com/aboutlna2021 Cleaning products cleaned up Ad Age sorted each of the top 200 advertisers into a category based on the marketer’s primary product or service. Aggregate LNA ad spending declined in most major categories. Travel marketers had the sharpest drop (down 53.5%), followed by automotive (-17.5%) and apparel (-10.2%). One category scored outsized spending growth: Marketers of household products—home supplies and cleaning products—boosted spending by 9.1%. That reflects increases in spending by Reckitt (most-advertised brand: Lysol) and Clorox Co. as demand for disinfectants and other cleaning products spiked during the pandemic. Ad Age’s analysis of spending by category based on U.S. measured-media spending from Kantar for all advertisers tells a similar story, with a drop in spending in 13 of the top 15 categories. Home supplies and cleaning products registered a 7% ad spending increase, and insurance ad spending edged up 1.2%. Who’s up and down Companies born or based on the internet dominate the list of marketers with the biggest U.S. ad spending increases, accounting for eight of the 10 marketers with highest percentage spending growth. Sports betting plays DraftKings and Flutter Entertainment (FanDuel, Fox Bet) and online marketplace Etsy more than doubled spending. The list of marketers with big-budget boosts includes such hot brands as delivery service DoorDash and payment platform Square. Procter & Gamble had the biggest budget growth in dollar terms, with its estimated U.S. spending on advertising plus other marketing costs jumping $435 million or 10.2% in fiscal 2020. Travel marketers had the biggest percentage spending drops, with estimated U.S. ad spending crashing 67% at Marriott International and 59% at Expedia Group. Estimated ad spending also tumbled 59% at JCPenney. The department store chain emerged from bankruptcy reorganization last December. In dollar terms, Expedia had the biggest decline, with estimated ad spending plunging $1.2 billion. Who's up. And down. Sharpest U.S. ad spending increases and decreases in 2020 among the 200 Leading National Advertisers. Sports betting plays DraftKings and Flutter Entertainment and online marketplace Etsy more than doubled their spending. Travel marketers and department stores slashed ad spending amid the COVID-19 pandemic. Marketer Business Estimated U.S. ad spending change, 2020 vs. 2019 Estimated 2020 total U.S. ad spending DraftKings Sports betting and gaming +155% $381 million Etsy Retail +150% $295 million Flutter Entertainment (FanDuel, Fox Bet) Sports betting and gaming +108% $447 million Overstock Retail +97% $245 million American Family Mutual Insurance Co. Insurance +88% $339 million Marriott International Travel -67% $219 million Expedia Group Travel -59% $810 million JCPenney (Copper Retail) Retail -59% $263 million Booking Holdings Travel -54% $740 million Airbnb Travel -44% $234 million Source: Ad Age Datacenter estimates. Internet gains and losses There’s no denying the significance of internet-centric marketers among the top 200 advertisers—just as there is no denying the significance of the internet as an advertising medium. (GroupM estimates the internet will account for about 65% of U.S. media advertising in 2021, up from 15% in 2010.) The ranking of the top 200 U.S. advertisers includes 31 internet ventures. Aggregate spending for those 31 companies fell 4.3%, a bit lower than the 6.5% drop for the remaining 169 marketers. Spending shifts last year demonstrate that internet-centric marketers by no means move in lockstep. Among the internet-centric marketers, 20 increased U.S. spending last year while 11 cut spending. Consider FANG, a group of dominant internet stocks—Facebook, Amazon, Netflix and Google parent Alphabet—that investors like to lump together. The four firms had strong revenue growth in 2020 (led by Amazon and Netflix, two pandemic standouts). Facebook’s estimated U.S. ad spending surged 42%. But estimated spending dropped for the other three: Amazon (-1.2%), Netflix (-23%) and Alphabet (-20%). With unprecedented demand for online shopping from homebound consumers, Amazon delivered the goods with “lower spending on marketing channels as a result of COVID-19,” according to the company’s annual regulatory filing. Alphabet “reduced spending and paused or rescheduled campaigns and changed some events to digital-only formats as a result of COVID-19,” according to its annual filing. When it comes to their own spending, even the richest internet companies live on a budget. © Copyright 2021 Crain Communications Inc. The data and information presented is the property of Crain and others and is protected by copyright and other intellectual property laws. For personal, noncommercial use only, which must be in accordance with Ad Age’s Terms and Conditions at AdAge.com/terms. Archiving, reproduction, redistribution or other uses are prohibited.

After the storm, ad spending is on the rebound: Ad Age Leading National Advertisers 2021

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