Major Brands Reduce Advertising Spending, Impacting Big Tech Revenue
What happened
A WARC Media report found that the world’s largest brand owners are spending a diminishing share of their sales revenue on advertising, with the notable exception of consumer goods companies. The report noted that digital platform spending by smaller businesses and cross-border e-commerce sellers is outpacing ad investment from big brands.
Why it matters
While global ad spend is forecast to grow 11.9% this year to $1.34 trillion, the shift in spending intensity has major implications for agencies and vendors in the enterprise market. Companies like Alphabet Inc., Microsoft, Meta, and Google could see their core ad revenue materially impacted by this diminishing brand spending.
Who's involved
- MetaIs cited as a company allocating a diminishing share of revenue to advertising.
- MastercardIs cited as a company allocating a diminishing share of revenue to advertising.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Alphabet Inc.Speculative
Core ad revenue might be materially impacted by diminishing brand spending.
- MicrosoftSpeculative
Core ad revenue might be materially impacted by diminishing brand spending.
- MetaSpeculative
Core ad revenue might be materially impacted by diminishing brand spending.
- GoogleSpeculative
Core ad revenue might be materially impacted by diminishing brand spending.
- LinkedInSpeculative
Ad revenue could decline, affecting its core ad business.
- YouTubeSpeculative
Ad revenue could decline, affecting its core ad business.
- MastercardSpeculative
Transaction volume in the advertising payment segment might decrease.
Keep exploring
The entities involved
-
Microsoft
American multinational technology corporation
-
Meta
American technology company
-
Netflix
American subscription video on-demand over-the-top streaming service
Related events
- Google and Meta reported significant year-over-year growth in advertising revenue, highlighting their dominance in the tech market.
- Established businesses like Nike and Costco are currently outperforming speculative technology stocks.
- Corporate earnings from Amazon and Intel reflect current market trends and AI infrastructure growth.