- Amazon is now “the largest advertiser on Earth” as the ad expense soared to $11 billion–a rise of 34 percent, or $2.8 billion, year after year.
Since recording annual advertising costs, Amazon is now “the largest advertiser on Earth” as the ad expense soared to $11 billion–a rise of 34 percent, or $2.8 billion, year after year. According to its annual report, the online retail and cloud computing giant increased its spending on “advertising and other promotional expenses to sell our products and services” faster than net sales, which rose 20 percent to $280.5 billion.
“We primarily direct customers to our stores through a number of marketing channels, such as our sponsored search, third-party customer referrals, social and online advertising, television advertising and other initiatives,” the annual report stated.
Amazon has become a regular advertiser during the US Super Bowl, using Droga5 London from Accenture Interactive to make a spot for this year’s big game featuring Ellen DeGeneres. In recent years a number of ad agencies, including Lucky Generals and Joint, shared duties on the creation of the company. Amazon uses the Initiative of Interpublic to deal with the purchase of global media.
According to company filings, Amazon, created by Jeff Bezos in 1994, has increased its ad spending almost twice in a decade from $593 million in 2009 to $3.3 billion in 2014 and $11 billion in 2019.
Amazon’s size of spending means it has outstripped consumer packaged goods giants Procter & Gamble and Unilever as the world’s top advertiser. Brian Wieser, president of global intelligence at WPP Group M, said: “Amazon is probably the largest advertiser on Earth, responsible for almost 2 percent of all spending.”
Amazon’s four largest markets are the United States, Germany, the United Kingdom, and Japan. The brands include Alexa, Fire, New, Kindle, Amazon, Twitch, Prime Video, and Web Services. In its annual report, the company reported a total marketing expense of $18.9 billion which included $11 billion in ads and around $7.9 billion in other costs.
“Marketing costs include advertisement and payroll and related expenses for employees involved in marketing and sales operations, including Amazon Web Services sales commissions,” the study said. “While costs associated with Amazon Prime memberships and other shipping offers are not included in marketing expenses, we view these offers as effective global marketing tools and intend to continue to provide them indefinitely.” P&G, which until recently was widely regarded as the world’s largest advertiser, reported that its ad spending fell by $350 million to $6.8 billion in 2019.
It was $19.1 billion in sales, general and administrative expenses, which included “marketing-related” expenditures and other costs. Throughout recent years, Amazon has also become a major media proprietor by selling ad space on its website. The company said it brought in “primarily” $14.1 billion from ad sales, although that figure, which rose 39 percent year-on-year, also included revenue from “some other services.”
According to eMarketer, it now ranks fourth in the world by digital ad sales, behind Google, Twitter, and Alibaba.
