Big tech drives the decline in ad intensity, report

The report examines how advertising investment has evolved among some of the world’s biggest brands and what this means for the wider advertising market.

The world’s largest advertisers are spending a smaller share of their revenue on advertising, with consumer goods companies emerging as a notable exception.

WARC Media’s Global Ad Trends: The Cost of Being Seen report finds that the combined advertising-to-sales ratio of 25 major US advertisers fell from 6.1 percent in 2019 to 5.5 percent in 2025, despite substantial growth in their advertising budgets.

WARC forecasts global advertising expenditure will grow 11.9 percent in 2026 to reach $1.34 trillion, driven in part by retail media and digital platforms.

The combined advertising-to-sales ratio of Alphabet, Meta, Microsoft and Netflix fell from 13.0 percent in 2019 to 7.4 percent in 2025. Over the same period, their combined revenue increased 146 percent, rising from $379 billion to $931 billion.

Had these companies maintained their 2019 advertising intensity, they would have spent $121 billion on advertising in 2025, or $52 billion more than they actually did. The figures illustrate how revenue growth among major technology companies has outpaced their advertising investment.

Across all 25 advertisers analysed, combined advertising expenditure increased 56 percent between 2019 and 2025, compared with revenue growth of 73 percent. The decline in advertising intensity therefore reflects a slower pace of investment relative to business growth rather than an overall reduction in spending.

Consumer goods brands increase advertising investment

Consumer goods companies bucked the broader trend. Among the six brands analysed — Coca-Cola, Estée Lauder, L'Oréal, Nike, PepsiCo and Procter & Gamble — five increased their advertising-to-sales ratios between 2019 and 2025, while PepsiCo's ratio remained broadly stable.

Their combined advertising-to-sales ratio rose from 11.6 percent in 2023 to 12.5 percent in 2025. Across the full 2019–2025 period, collective advertising expenditure increased 36 percent, exceeding revenue growth of 29 percent.

WARC attributes the increase partly to softer sales growth and the movement of trade and shopper marketing budgets into measured media, including retail media. These shifts can increase the share of expenditure recorded as advertising, even when the underlying investment reflects changes in budget allocation.

Advertising trends vary across other major brands

The 15 advertisers outside the technology and consumer goods groups presented a mixed picture. Although their revenue-weighted average advertising-to-sales ratio remained broadly flat or edged upwards, 10 companies reduced their individual ratios between 2019 and 2025.

In the automotive sector, Ford's ratio declined from 2.3 percent to 1.6 percent, while General Motors fell from 2.7 percent to 1.7 percent. In payments, Visa dropped from 4.8 percent to 4.2 percent, and Mastercard from 5.6 percent to 4.0 percent.

McDonald's advertising-to-sales ratio fell from 1.7 percent to 1.3 percent, while Target's declined from 2.0 percent to 1.4 percent. Marriott, Booking Holdings, Eli Lilly and The Home Depot also recorded declines. Amazon and Yum! Brands remained broadly stable, while Walmart, Starbucks and Expedia increased their ratios.

Three factors shape advertising intensity

Alex Brownsell, Head of Content, WARC Media: "The global ad market is expanding rapidly, but companies from Meta to Mastercard and McDonald’s are allocating a diminishing share of revenue to advertising. Only consumer goods companies – buffeted by softening sales growth and with trade budgets moving into measured media – are increasing ad intensity.

"This underlines what we’ve previously reported – namely that we are operating in a two-speed marketplace. The expansion of digital platform spend by smaller businesses and cross-border e-commerce sellers is by far outpacing growth in ad investment by big brands. This has major implications for the ecosystem of agencies and vendors operating in the enterprise market."

The report identifies three main forces behind changes in advertising intensity. First, weaker sales can push the ratio upwards when companies maintain advertising expenditure despite declining revenue. Second, the transfer of trade and shopper marketing budgets into retail media can increase the proportion of spending classified as advertising.

Third, the distinction between owning and renting audience attention can influence investment decisions. Companies such as Alphabet and Meta own platforms that attract large audiences, giving them opportunities to expand revenue without relying on advertising expenditure to reach audiences in the same way as brands that must purchase media access.

WARC's findings point to a widening gap between the growth of the global advertising market and the investment patterns of established brands. While digital platforms and smaller advertisers contribute to market expansion, many of the largest companies are allowing advertising expenditure to grow more slowly than their revenues.