Eight Big Tech platforms are on track to account for 10.0% of all global ad spend by 2030: WARC

A new WARC analysis of the advertising investments of eight major digital platforms has highlighted the importance of “Big Tech” to the health of the global advertising economy.

Eight Big Tech platforms, namely Alibaba, Alphabet, Amazon, Baidu, Meta, Microsoft, Netflix and Tencent, are on track to account for 10.0% of all global advertising investment by 2030, she said.

These results are published by WARC, the international marketing intelligence service, as part of its WARC Media suite.

Ad spend by Alibaba, Alphabet, Amazon, Baidu, Meta, Microsoft, Netflix and Tencent in 2021 totaled $46.6 billion (+49.4%, year-on-year), or 6.0% of all advertising investments worldwide. On the current trajectory, Big Tech’s share of global ad spend will exceed 10.0% by 2030.

Big tech ad spend is also growing faster (+49.4%) than categories such as media and publishing (+34%), technology and electronics (+26%) and retail. (+21%). WARC’s analysis found that Big Tech contributed more than a tenth (10.4%) of the growth in all global ad spend in 2021.

Amazon becomes the biggest spender in the world

In 2009, Amazon founder Jeff Bezos infamously claimed that “advertising is the price you pay for a mundane product or service.” Fast forward to 2021 and Amazon spent $16.9 billion on ads (+55.0% year-over-year), the most spent ever by a single company over a 12-month period.

However, Amazon’s spending model appears to be self-financing: investing in advertising helps Amazon attract shoppers to its e-commerce platform, which in turn increases the revenue it derives from advertisements in retail media – as well as ad spend on products like Twitch and Freevee.

The second-largest advertiser within Big Tech is Alibaba, which invested $8.8 billion (+84.4%) in 2021. Fueled by China’s booming e-commerce market, Alibaba increased its share of spending total ad spend in the Big Tech category, rising from 2.9% in 2014. to 19% in 2021 – surpassing Google-owner Alphabet for the first time in total ad spend ($7.9 billion, +47.0% ).

Of the companies analyzed by WARC, Microsoft has the lowest commitment to advertising. It invested $1.5 billion in 2021, a sum that has remained stable since 2016. However, that could change in light of the potential acquisition of gaming company Activision Blizzard and Microsoft’s growing ambitions in the game. metaverse space.

Big Tech ad spend as a percentage of total sales declines

While Big Tech companies are investing huge sums in advertising in absolute terms, these platforms are also growing their revenue at a remarkable rate.

In many cases, Big Tech brands invest a lower percentage of their total sales in advertising. These companies do not feel bound by rules to maintain levels of ad spend relative to total sales, as might be found in categories such as CPG or automotive.

The notable exception is Meta, owner of Facebook, which has accelerated its advertising investments. Meta ad spend as a percentage of sales has grown from just 0.8% in 2017 to 2.5% in 2021.

Alex Brownsell, chief content officer at WARC Media and author of the report, said: “Big Tech companies have come a long way from being ad spend skeptics to becoming top spenders. in the world. As their dominance in the mobile-focused digital commerce market increases, their share of total global ad spend is likely to grow as well.

“It underscores that while digital native brands can succeed in the short term without the support of ad spend, long-term success often hinges on the willingness to invest in performance-enhancing and brand-strengthening advertising.”

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