How Amazon's annual ad spending rocketed from $30,000 to $16.9 billion

Amazon in 2021 poured $16.9 billion into worldwide advertising and promotion, a 55% spending increase that will solidify the retailer’s rank as the No. 1 U.S. advertiser and virtually ensure it will take the top spot in Ad Age’s global advertisers ranking. The company’s spending spree last year worked out to an astounding $32,000 a minute—or $536 a second. Source: Ad Age Datacenter analysis of company filings. Numbers rounded.Credit: Infographic by Ad Age. Photo: Amazon Amazon primed the pump on marketing last year after pulling back slightly on advertising and promotion in 2020, when it trimmed spending amid unprecedented demand for online shopping from homebound consumers in the first year of the pandemic. In its annual regulatory filing this month, Amazon attributed an increase in 2021 marketing expenses primarily to “higher marketing spend, which was constrained in 2020 in response to COVID-19, and increased payroll and related expenses for personnel engaged in marketing and selling activities.” Advertising and promotion last year accounted for about half of Amazon's marketing expenses. Amazon in 2020 trimmed ad and promotion spending about 1%, reflecting “lower spending on marketing channels as a result of COVID-19,” according to Amazon’s annual filing from a year ago. Prime numbers: Amazon ad and promotion spending, 1995 to present Amazon spending soared to $16.9 billion in 2021 from just $30,000 in 1995. Source: Ad Age Datacenter analysis of company filings. Expanded data at AdAge.com/globalmarketers2021. Figures for 1999 to present are advertising and other promotional costs. Figures for 1995 through 1998 are advertising expense. The marketer has cut annual ad and promotion spending four times—in 2020 amid the pandemic and back in 2001, 2002 and 2003 in the wake of the dot-com bubble. The company had double-digit percentage increases in ad and promotion spending every year from 2004 through 2019, and again in 2021. Last year’s 55% jump was the biggest percentage increase since 2011. Check out The Big List, Ad Age Datacenter’s definitive rankings of advertisers and agencies. So, how does Amazon pay for all of this advertising? It’s amassed a cache of cash: Worldwide net sales increased 22% to $470 billion in 2021. And the company has more money flowing in, as it is raising the annual Prime membership fee in the U.S. by $20, to $139, the first increase since 2018. Since Amazon opened its online bookstore in 1995, the company has pumped $75 billion into advertising and promotion (3.4% of sales) and registered $2.2 trillion in net sales, according to Ad Age Datacenter. Amazon scored double-digit percentage growth in net sales every year since 2000 (and triple-digit growth before that). More than half of Amazon’s ad and promotion spending (51.9%) and net sales (51.7%) came in the past three years. Source: Ad Age Datacenter analysis of company filings. Numbers rounded.Credit: Infographic by Ad Age. Photo: Amazon Ad and promotion spending last year equaled 3.6% of net sales, up from 2.8% in 2020 but in the range of the 3.5% to 3.9% Amazon spent each year from 2014 through 2019. Amazon is a virtual lock to take back the top spot in the World’s Largest Advertisers ranking, based on 2021 spending, that Ad Age will release in December. Amazon previously vaulted over Procter & Gamble Co. in Ad Age’s global ranking based on 2019 spending. P&G retook the lead position in Ad Age’s most recent global ranking with estimated worldwide marketing spending of $11.5 billion that topped Amazon’s $10.9 billion 2020 outlay. Amazon is on track to be No. 1 in Ad Age’s upcoming U.S. advertisers ranking for the third year in a row. Ad Age will publish the Leading National Advertisers ranking in June based on 2021 spending. Ad Age previously ranked Amazon as the biggest U.S. advertiser, ahead of Comcast Corp., based on estimated U.S. spending in 2020 and 2019.

How Amazon's annual ad spending rocketed from $30,000 to $16.9 billion

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