As Will Smith famously said in the 1996 classic, ‘Independence Day,’ “welcome to Earf.” No, no typo, that’s how he pronounced it and I’m all for it. Anyways, Earf looked a lot different then. There were less cell phones and more books. The Cowboys won the Super Bowl. And, Amazon was a just two year old company, not the largest advertiser on Earf…
More on that later as I’ve got to explain this first. This is the Black Collar Club. And in it I’ll address relevant marketing, advertising, social and cultural “news” in a condensed format sourced from hours of early morning time spent scouring the internet in hopes of finding out what’s REALLY going on in our industry.
That’s right, Black Collar Club, welcome to Earf. Or, Earth. Where “Amazon is now [the] biggest advertiser.” (Ad Age) Yes, “Ad Age’s World’s Largest Advertisers has a new leader: Amazon, whose advertising and promotion spending soared 34% to $11 billion in 2019 as net sales surged 20% to $281 billion.” (Ad Age)
2019? That was years ago?
At least it feels like it was… Anyways, “Ad Age’s World’s Largest Advertisers… serves as the 2019 baseline for marketers and marketing activity before COVID-19 and a global recession… The 2020 tally for marketers won’t become clear until after companies disclose financial results in the early months of 2021.” (Ad Age)
Heard. 86 spending…
Yes, my fellow former service industry workers. And yes, “2020 ad spending figures for top marketers are going to be depressed…” (Ad Age) But not for all marketers. Some “increased spending to take advantage of market opportunities amid the coronavirus pandemic.” (Ad Age)
Flo.
What? Flo and her buddies down at Progressive corp., “for example, boosted ad spending by 20% in the first nine months of 2020.” (Ad Age) And during their most recent regulatory filing, said “We will continue to invest in advertising as long as we generate sales at a cost below the maximum amount we are willing to spend to acquire a new customer.” (Ad Age)
That’s genius.
But it doesn’t require one to see that “packaged-goods marketers, benefitting from consumer pantry-loading and increased consumption during the pandemic, continue to pour money into advertising.” (Ad Age)
Lower level of necessary intellect, there. But still good work.
And back up with the brain-power because “rising revenue doesn’t necessarily translate into higher spending.” (Ad Age) That’s right, Netflix’s revenue increased 25% in the first nine months of the pandemic but cut marketing spend by 17%. Alphabet (Google’s parent) saw an 8.5% rise in the first three quarters but still cut their spend by $718 million.
And, what of Earth’s biggest advertiser?
Wh-h-hell, as any college professor professing about global warming under the guise of Geography 101 would pronounce it, let me tell you…
“Amazon has prospered in the pandemic, with worldwide net sales rocketing 35% in the first nine months…” (Ad Age) But, it hasn’t necessarily led “to surging ad and promotion spending even for a marketer as flush with cash as [they are].” (Ad Age)
However, in the first nine months of the pandemic Amazon’s spend did increase 15%. In their latest filing, Amazon said they expect their “marketing costs as a percentage of net sales to continue to be favorably impacted [by the bug.]” (Ad Age)
Never-the-less, it’s quite the accomplishment being the Earth’s biggest advertiser. And “over the past 25 years, Amazon [has] pumped $47 billion into advertising and promotion to generate $1.3 trillion in net sales.” (Ad Age)
Clearly, money well spent.
And, clearly, spending more of it’s a good idea, brands.
Welcome to Earth. Where we’re all inside our homes, eating with extra napkins and buying sh!t.
Just waiting around for a vaccinated tomorrow.
Your Huckleberry,
Jimmy Boy
SOURCE: Ad Age