Amazon in 2022 powered up worldwide advertising and promotion spending by 22% to $20.6 billion, breaking a record for annual spending by any marketer.
 
The spending spree came as net sales rose 9% in 2022, the slowest growth since Amazon opened its online bookstore in 1995.
 
The company had double-digit percentage increases in ad and promotion spending every year from 2004 through 2022 except for 2020, when Amazon trimmed spending by 1%, according to Ad Age Datacenter’s analysis of Amazon financial filings.

Up until the sales growth slowdown in 2022, Amazon scored double-digit percentage growth in net sales every year since 2000 (and triple-digit growth before that).
 
The marketer has cut annual ad and promotion spending four times—in 2020 amid the coronavirus pandemic and back in 2001, 2002 and 2003 in the wake of the dot-com bubble.
 
Ad and promotion spending as percent of net sales rose from 3.6% in 2021 to 4.0% in 2022. That’s Amazon’s highest ad and promotion spending percentage since 2000.
 
Since Amazon opened for business in 1995, the company has pumped $95 billion into advertising and promotion (3.5% of sales) and registered $2.7 trillion in net sales, according to Ad Age Datacenter. Just over half of Amazon’s ad and promotion spending and net sales came in the past three years.

The retailer is set to take the top spot in the World’s Largest Advertisers ranking for the second year in a row when Ad Age publishes its global ranking this December based on 2022 spending.

Amazon also is on track to be No. 1 in Ad Age’s upcoming U.S. advertisers ranking for the fourth year in a row. Ad Age will publish the Leading National Advertisers ranking in June based on 2022 spending.

Amazon’s stated 2022 worldwide ad and promotion costs ($20.6 billion) were nearly double the level of 2020 ($10.9 billion).

There are indications that Amazon could tighten spending as it grapples with slowing sales growth and economic headwinds.

Amazon doesn’t reveal quarter-by-quarter ad and promotion spending, but growth in a larger expense bucket—sales-and-marketing spending—has slowed. 
 
Sales-and-marketing spending rose 30% in 2022—with a 35% increase in the first nine months of the year, but only 19% growth in the fourth quarter vs. the same period a year earlier.
 
Ad and promotion spending in 2022 accounted for about half (49%) of Amazon’s sales-and-marketing spending.

The company discussed marketing in its annual regulatory filing last week.
 
“We direct customers to our stores primarily through a number of marketing channels, such as our sponsored search, social and online advertising, third party customer referrals, television advertising, and other initiatives,” Amazon said in the filing. “Our marketing costs are largely variable, based on growth in sales and changes in rates. To the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing costs.”
 
Speaking on an earnings call last October, Amazon Chief Financial Officer Brian Olsavsky said the company was “taking actions to tighten our belt. … We aim to strike the right balance between investing for our customers for the long term while driving operational efficiency improvements and accomplishing more with less.”
 
On an earnings call last week, President-CEO Andrew Jassy said: “We’re working really hard to streamline our costs and trying to do so at the same time that we don't give up on the long-term strategic investments that we believe can meaningfully change broad customer experiences and change Amazon over the long term.”
 
Amazon had about 1,541,000 full-time and part-time employees at year-end 2022, down from 1,608,000 at year-end 2021, according to its annual filings.
 
Amazon continued to cut its headcount last month, announcing layoffs of more than 18,000 employees.