World’s Largest Advertisers 2022—Cautious growth as a recession may loom

The World’s Largest Advertisers have pared spending growth this year—and in some cases slashed budgets—amid tensions of inflation, rising interest rates and slumping financial markets after a spending surge in 2021, according to Ad Age’s new global report. Rampant expectations of recession presage a rough and rocky 2023. Whatever the new year brings, there’s no denying a remarkable turnaround in advertising from the depths of the coronavirus pandemic. Spending for the world’s 100 biggest advertisers jumped 22.1% to a record $339 billion in 2021, rebounding from a 7.1% decline in 2020. Ad Age World’s Largest Advertisers 2022 See ad spending, rankings and analysis for the biggest global marketers Click here That’s far and away the biggest percentage growth since Ad Age began ranking marketers based on worldwide spending in 2001. (This is Ad Age’s 36th annual global report, but top 100 tallies through 2000 ranked marketers based on media spending outside the U.S.) The rebound in 2021 global ad spending tracked with a turnabout in U.S. ad spending. The top 200 U.S. advertisers increased 2021 ad and marketing services spending by 19.7%, according to Ad Age’s Leading National Advertisers report. Among the world’s 100 biggest advertisers, 91 increased spending in 2021 vs. 2020, when ad spending fell amid a brief but brutal global recession precipitated by the COVID-19 pandemic. Among the top 100 advertisers, 71 spent more in 2021 than they did in pre-pandemic 2019, according to Ad Age Datacenter’s analysis. Fastest growth in 2021 Expedia Group showed the biggest ad spending growth among the top 100 in 2021. Its global spending soared 125% to $2.7 billion last year as the travel market emerged from lockdown. (Expedia’s spending tumbled 66% to $1.2 billion in 2020 from $3.5 billion in 2019, the sharpest fall among the top 100.) Biggest spending drop IBM Corp. had the biggest spending drop among the top 100 in 2021 as it trimmed ad and promotion spending by 6%. The fact that the deepest spending drop was only 6% is testament to the strength and resilience of global marketing in 2021. Biggest advertisers Amazon reclaimed the No. 1 spot in the Ad Age World’s Largest Advertisers ranking with $16.9 billion in 2021 worldwide ad and promotion spending, up 55%. The online retailer previously topped the ranking based on 2019 spending but came in second place for 2020. In the 27 years since Amazon opened its online bookstore from 1995 through 2021, Amazon pumped $75 billion (3.4% of sales) into advertising and promotion to generate $2.2 trillion in net sales, according to Ad Age Datacenter. Just over half of its ad and promotion spending and net sales came in the three year period of 2019-2021. Alibaba Group Holding vaulted to No. 2 from No. 5 in Ad Age’s ranking with ad and promotion spending of $14.2 billion in 2021, up 68%. Spending by the Chinese e-commerce titan in 2021 was nearly 100 times its ad and promotion outlay back in 2011 ($147 million), according to Ad Age Datacenter’s analysis. L’Oréal, the French cosmetics and personal care products marketer, ranked third with 2021 ad and promotion spending of $12.5 billion, up 27%. Packaged goods powerhouse Procter & Gamble Co. dropped to fourth place from the top spot with estimated worldwide marketing spending of $11.1 billion in the fiscal year ended June 2022, down 3%. Amazon and Alibaba are among 15 internet-centric companies in the Ad Age World’s Largest Advertisers top 100 ranking. The internet firms collectively boosted 2021 global spending 50%. The remaining 85 companies in the ranking raised spending 16%. Among the 15 internet players, 14 increased spending in 2021; U.S. online retailer Wayfair trimmed spending 2%. Ad Age World's Largest Advertisers 2022 Want to dig deeper? Subscribe to Ad Age Datacenter to access the complete Ad Age World's Largest Advertisers 2022 report online. Ad Age Datacenter subscribers get: Global marketers database with ad spending, key agency relationships, executives and company profiles for the world's 100 biggest advertisers Ad Age Datacenter's exclusive ranking of the 100 biggest spenders, downloadable in Excel Biggest advertisers by country based on measured-media spending Ad Age Datacenter subscription info: AdAge.com/getdatacenter customerservice@adage.com 877-320-1721 Ad spending in 2022 The 2022 tally for marketers won’t be clear until after public companies disclose full-year financial results starting in the early months of 2023. The latest quarterly filings from major marketers show higher year-to-date spending overall, though some companies have pulled back on marketing amid economic and business challenges. Publicly traded companies often make only limited disclosures—and sometimes no disclosures—on ad and marketing spending in quarterly or other interim financial filings. But Ad Age Datacenter’s analysis of disclosures by 50 of the top global advertisers shows that three in four companies boosted year-to-date 2022 global spending. For companies that broke out spending, Ad Age calculated a median year-to-date spending increase of 7.4% based on reported figures in local currencies. In U.S. dollars, that percentage would be lower due to the strength of the dollar against other major currencies in 2022. For example, German sports products marketer Adidas increased marketing and point-of-sale expenses 9% in the first three quarters of 2022 based on financial reporting in euros, but that translated to a 3% decline when Ad Age converted figures to dollars at average exchange rates. Biggest year-to-date gain Booking Holdings (Booking.com, Priceline) showed the biggest year-to-date spending gain among companies analyzed by Ad Age. It increased marketing spending 66% in the first nine months of 2022 vs. the same period last year as the travel market continued to rebound. The company’s marketing spending is now running well ahead of its level in pre-pandemic 2019. Sharpest drop in 2022 ad spending Chinese internet services firm Tencent Holdings had the sharpest year-to-date spending drop among companies reviewed by Ad Age. It slashed ad and promotion spending in the first nine months of 2022 by 31% in renminbi and 33% in dollars. In a filing, Tencent said a reduction in selling and marketing expenses reflected “more disciplined spending on marketing activities across our organisation.” Internet media firms' spending in 2022 A weakening digital ad market could put pressure on marketing spending at internet media firms, where “efficiency” is the new watchword. At Google parent Alphabet, third-quarter 2022 worldwide revenue growth slowed to 6% while sales-and-marketing expenses rose 26%—including a $708 million increase in ad and promotion spending. Alphabet CEO Sundar Pichai in recent months has stressed an imperative to improve productivity and efficiency across the company. Facebook parent Meta Platforms boosted marketing and promotion spending in the first nine months, but revenue was flat for that period—and down 4% in the third quarter. On Meta’s quarterly earnings call in October, Chief Financial Officer (and now Chief Strategy Officer) David Wehner told analysts: “We are making significant changes across the board to operate more efficiently.” Meta last month laid off more than 11,000 employees, and the company has been working to cut costs across its business. Amazon also faces ballooning costs amid slower growth in sales, raising the prospect of some adjustment in its massive ad and promotion budget. The retailer’s sales-and-marketing costs jumped 35% in the first nine months of 2022, including higher marketing spending, while net sales rose 10%. Speaking on an October earnings call, Amazon CFO 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.” Amazon in November began layoffs in its corporate staff, and President-CEO Andrew Jassy told employees to expect additional staff reductions in early 2023. Alibaba cut its sales-and-marketing expenses 14% in renminbi in the six months ended Sept. 30 as it emphasizes what CFO Toby Xu termed “operating efficiency and cost optimization.” Advertising and promotion accounts for the lion’s share of Alibaba sales-and-marketing spending. Based on spending trends, Alibaba’s ad and promotion spending for the fiscal year ending March 2023 likely will come in several billion dollars below last year’s $14.2 billion. Financial services spending in 2022 Among nine financial services firms in the top 100, four—Capital One Financial Corp., JPMorgan Chase & Co., American Express Co. and Citigroup—disclosed double-digit increases in worldwide marketing spending in the first nine months of 2022, led by a 55% spending boost at credit card provider Capital One. Four financial firms—Rocket Cos., Allstate Corp., Bank of America Corp. and Progressive Corp.—cut spending in the first nine months. Mortgage provider Rocket slashed third-quarter ad and marketing spending 33% as its business tumbled with higher interest rates and the housing slump. The ninth financial firm in the ranking, Geico parent Berkshire Hathaway, doesn't break out marketing spending. Ad spending by category in 2021 For classification purposes, Ad Age placed each marketer in a category (e.g., travel, retail, financial services). For marketers that operate in multiple categories, Ad Age assigned the marketer to its most-advertised category. Based on that classification protocol, global ad spending for the top 100 rose in every marketer category in 2021. That’s a turnabout from 2020, when spending dropped in all categories except retail and personal care/household products. Spending last year for the ranking’s three travel-related ventures (Expedia, Booking Holdings, Uber Technologies) rocketed 88%, propelling the travel category to the biggest percentage increase in 2021 from the sharpest category drop in 2020. The list includes 15 retailers that in aggregate last year boosted spending 44%, powered by e-commerce (Amazon and China’s Alibaba and JD.com) and the resurgent global luxury market (Compagnie Financière Richemont, LVMH Moët Hennessy Louis Vuitton and Kering). The ranking includes 14 personal care/household products marketers that increased spending 10%. The top 100’s four telecom-related ventures (AT&T, Charter Communications, Deutsche Telekom and Verizon Communications) increased global spending 5%, the lowest category spending growth rate. Top 100 by headquarters location Ad Age World’s Largest Advertisers includes a roster of marketers from Amazon, based in Seattle (ad and promotion spending: $16.9 billion), to No. 100 Rocket, a mortgage provider based in Detroit (ad and marketing spending: $1.25 billion). Among the world’s top 100 advertisers, 51 have headquarters in North America (50 in the U.S., one—Burger King parent company Restaurant Brands International—in Canada), 29 in Europe and 20 in Asia. The list includes six China-based marketers—internet ventures Alibaba, Baidu, JD.com and Tencent; auto marketer SAIC Motor Corp.; and food and beverage marketer Inner Mongolia Yili Industrial Group Co.—that in aggregate increased worldwide spending by 50% in 2021. The remaining 94 marketers increased worldwide spending by 20%. The global ranking complements the Ad Age Leading National Advertisers ranking; 84 of last year’s 200 biggest U.S. spenders (and 70 of the 100 biggest U.S. spenders) made the ranking of the world’s top 100 spenders. Seven of the Ad Age World’s Largest Advertisers had no significant U.S. measured-media spending in 2021: China’s Baidu, JD.com, SAIC and Yili; French automaker Renault; German retailer Rewe Group; and Japanese retailer Aeon Co. Ad Age Datacenter subscribers can access the full World’s Largest Advertisers ranking and a global marketers database showing ad spending, key agency relationships, executives and company profiles at AdAge.com/globalmarketers2022. Ad Age World’s Largest Advertisers 2022 See ad spending, rankings and analysis for the biggest global marketers Click here

World’s Largest Advertisers 2022—Cautious growth as a recession may loom

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