Big Brand Growth Is Decoupling From Advertising Spend

WARC Media reported on 14 October that 25 of the world’s largest US-based advertisers are devoting a smaller share of sales to advertising than they did before the pandemic. Their combined ad-to-sales ratio fell from 6.1% in 2019 to 5.5% in 2025.

This is not a retreat from advertising. Combined spending rose 56% over the period, but revenue grew faster at 73%. The distinction matters because WARC still expects the global advertising market to expand 11.9% this year to US$1.34 trillion. Market growth is strong, but it is not distributed evenly across agencies’ largest clients.

What WARC Found

Technology companies account for much of the divergence. Alphabet, Meta, Microsoft and Netflix saw combined revenue rise 146%, from US$379 billion to US$931 billion, between 2019 and 2025. Their combined ad-to-sales ratio dropped from 13% to 7.4%.

WARC calculated that maintaining the 2019 ratio would have pushed their 2025 advertising spend to US$121 billion, US$52 billion above the actual figure. These businesses can grow partly through products, ecosystems and audiences they already control. They do not need to rent attention in the same proportion as companies that rely on media to create or capture demand.

Retail Media Is Absorbing The Shopper Marketing Stack

Ace Hardware is stretching retail media across creators, delivery, retailer education and measurement. The move shows why CMOs need one commercial brief, but separate objectives and attribution rules, before retailer platforms absorb more shopper, trade and influencer budgets.

Mission MediaMission Media

Why Consumer Brands Move Differently

Consumer-goods companies are moving in the opposite direction. Across Coca-Cola, Estée Lauder, L’Oréal, Nike, PepsiCo and Procter & Gamble, advertising spend grew 36% from 2019 to 2025, ahead of 29% revenue growth. Five raised their ad-to-sales ratios, while PepsiCo was broadly flat.

The group’s ratio climbed from 11.6% in 2023 to 12.5% in 2025 as sales growth softened. WARC also points to trade and shopper budgets moving into measured retail media. That means the rise reflects both competitive pressure and a change in where companies classify commercial spending.

For CMOs, the budget question is therefore broader than whether brand investment is rising. They need a consolidated view of brand media, shopper marketing, trade support and retail media, followed by separate objectives and measurement rules for each. Otherwise, a growing advertising line can disguise budget migration rather than stronger demand creation.

Where Advertising Growth Is Concentrating

WARC’s findings describe an industry running at two speeds. Alex Brownsell, head of content at WARC Media, called it “a two-speed marketplace” in which smaller businesses and cross-border ecommerce sellers are increasing platform spend faster than large brands.

Adjacent WARC data published this week shows Alphabet, Amazon and Meta are set to collect 59.7% of global ad spend outside China in 2026, or US$659.6 billion. Social media, search and retail media together are forecast to take 66.4% of total global investment.

The concentration suggests that market expansion increasingly rewards platforms built for continuous, self-service demand, not only agencies serving a limited set of multinational accounts. Brownsell said the split carries “major implications” for agencies and vendors in the enterprise market.

That pressure is especially relevant in Asia Pacific, where marketplace advertising, social commerce and cross-border selling often sit alongside regional brand plans. Agency leaders need to distinguish between clients whose revenue growth creates new paid-media demand and those whose owned audiences, distribution or commerce systems reduce their need to buy attention.

What CMOs And Agencies Should Decide

The report does not offer one correct ad-to-sales ratio. It shows why historical benchmarks weaken as business models differ so sharply. A technology platform, a consumer-goods company and a retailer may all report higher revenue while facing completely different reasons to advertise.

CMOs should set media intensity against the job advertising must perform: defend penetration, create demand, support retail partners or compensate for weak organic distribution. They should also make budget migrations visible to finance, particularly when trade spending becomes retail media and begins to carry advertising-style measurement claims.

Agency CEOs face a related decision. Growth plans built around a general rise in global ad spend may overstate the opportunity in enterprise accounts. The stronger position is to identify where clients still need rented attention, then connect media, commerce and measurement capabilities to that specific need.

WARC’s numbers suggest that advertising growth remains substantial, but the source of that growth is changing. The executive task is to decide whether each budget is funding genuine demand creation, a platform toll or a reclassified commercial expense, and to manage it accordingly.