How FANG is sinking its teeth into advertising spending

A decade ago, the FANG gang—Facebook, Amazon, Netflix and Google—still had their baby teeth when it came to their own ad spending. A decade later, the four have bought their way into the top tier of U.S. and global advertisers. Worldwide ad spending for FANG—Wall Street lingo for these internet stocks—soared to $17.5 billion in 2018 from $1.1 billion in 2009, according to Ad Age Datacenter’s analysis. FANG revenue over that period surged to $441 billion from $51 billion. But ad spending grew faster. FANG’s worldwide ad spending as a percent of revenue nearly doubled to 4.0 percent in 2018 from 2.2 percent in 2009, as all four companies boosted the portion of revenue they put into advertising. Over that period, Facebook’s ad spending shot up to $1.1 billion in 2018 from $5 million in 2009. Amazon’s spending climbed to $8.2 billion from $593 million. A decade ago, no internet company appeared in Ad Age’s ranking of the 100 biggest global advertisers. The Ad Age Leading National Advertisers ranking of top U.S. spenders for 2009 included just one internet company, eBay. It’s a different picture today. FANG and other internet companies now are driving ad spending growth both globally and in the U.S. Ad Age Leading National Advertisers 2019’s top 200 ranking included 19 internet-centric companies whose U.S. spending in 2018 jumped a whopping 23 percent. For the first time, all four FANG companies ranked among the top 100 U.S. spenders in that report. Among the 200 biggest U.S. advertisers, seven of the 10 companies with the highest percent spending growth in 2018 were internet plays. The Ad Age World’s Largest Advertisers 2019 top 100 ranking included 12 internet companies that in 2018 increased global spending by 26 percent. In the global ranking, six of the 10 marketers with the highest percent spending growth were internet companies. It’s worth noting that three of the four FANG members—Facebook, Google parent Alphabet and Amazon—are both big ad sellers and buyers. Facebook in 2018 generated 99 percent of its worldwide revenue from advertising; at Alphabet, 85 percent of revenue came from advertising. Amazon’s “Other” revenue bucket in 2018 had $10 billion in net sales, primarily from the sale of advertising services. That’s a drop in the bucket—just 4 percent—of the company’s net sales. Netflix has debunked talk that it may start selling advertising on its video-streaming service. Netflix in July 2018 told investors: “We, like (AT&T-owned) HBO, are advertising-free. That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false.” FANG worldwide ad spending and revenue, now vs. a decade ago Ad spending by Facebook, Amazon, Netflix and Google parent Alphabet has soared over the past decade, vaulting the FANG gang into the top tier of U.S. and worldwide advertisers. Combined revenue for FANG has rocketed to $441 billion from $51 billion a decade ago. Facebook Amazon Netflix Alphabet (Google) Sum: FANG Worldwide ad spending (dollars in millions) 2018 $1,100 $8,200 $1,808 $6,367 $17,475 2009 5 593 175 353 1,126 Ad Age Leading National Advertisers: U.S. ranking 2018 100 3 44 8 2009 Too small to make ranking Ad Age World's Largest Advertisers: worldwide ranking 2018 107 5 46 9 2009 Too small to make ranking Worldwide revenue (dollars in millions) 2018 $55,838 $232,887 $15,794 $136,819 $441,338 2009 777 24,509 1,670 23,651 50,607 Worldwide ad spending as percent of revenue 2018 2.0% 3.5% 11.4% 4.7% 4.0% 2009 0.6 2.4 10.5 1.5 2.2 Source: Ad Age Datacenter analysis of company reports. Facebook and Netflix figures are advertising expenses. Amazon and Alphabet are advertising and promotion expenses. See expanded data at AdAge.com/globalmarketers2019. FANG worldwide ad spending over past decade Worldwide spending since 2009 for Facebook, Amazon, Netflix and Google parent Alphabet. Facebook’s ad spending surged to $1.1 billion in 2018 from $5 million in 2009. Over that period, Amazon’s spending climbed to $8.2 billion from $593 million. Source: Ad Age Datacenter analysis of company reports. Facebook and Netflix figures are advertising expenses. Amazon and Alphabet are advertising and promotion expenses. See expanded data at AdAge.com/globalmarketers2019.

How FANG is sinking its teeth into advertising spending

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