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.
