Silicon Valley Tech Is Spending More On Ads – Largely On Itself

Internet-age companies like Apple, Alphabet, Amazon and Netflix, not to mention Chinese technology giants, are spending more on advertising, catching verticals like CPG, automotive and financial companies that traditionally spend the most on ads.

There are 10 new-age tech companies among Ad Age’s top 100 global advertisers. In 2017, the most recent full year data is available for, those 10 brands collectively increased ad spend by 29.6%. The remaining 90 top advertisers increased 2.6%.

While internet companies disproportionately outspend legacy brands online, they’re getting into traditional channels like television and out-of-home media.

Broadcasters used to debate whether to accept ads from companies like Google and Amazon that were siphoning audiences online, said Brian Wieser, GroupM’s global president of business intelligence. “Obviously the industry settled on accepting those ads.”

And tech companies are bolstering television spend and pricing, even as TV audiences decline, said Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence.

Television is particularly important as companies like Amazon and Google build in-home hardware and media subscription businesses, Barnard said, because to gain mass market appeal they need to reach people who aren’t regular users of their online services.

That need for reach is why tech companies have invested heavily in out-of-home (OOH) as well.

Three internet companies, Apple, Amazon and Google, were among the 10 biggest OOH spenders last year (and Facebook was No. 11), per Kantar Media data. Netflix cut out the middleman and bought a Hollywood billboard company last July.

Google, Apple and Amazon enjoy huge advantages in terms of attribution and sales conversion data, Barnard said. So those brand marketers could gain useful insights about rival media companies for their ad platform colleagues, especially as tensions mount between digital media and telco-broadcasters.

The global economy constantly cycles through new massive advertisers, said Wieser. In the 1980s, entertainment studios became big advertisers to support nationwide blockbuster releases, he said. And the pharma category has cycled up and down since it became legal to market prescription medicine to consumers.

But unlike previous waves of top ad spenders, tech companies are also the fastest-growing media sellers, creating a virtuous cycle of spend and earn for online ad platforms.

“Tech companies have become major players on the demand side of the ad market, as well as in the supply side,” Barnard said. The ad spend the tech companies devote toward selling their products often goes right back to them.

The top advertisers on Amazon during the holidays last year were Amazon and Apple, according to data from the ecommerce marketing company Downstream. Last November, Apple agreed to sell some products directly to Amazon, with the ecommerce company taking first-party control over marketing on the platform.

And when Facebook released its political ad transparency report in 2016, most of the attention was on how different candidates and parties spent on the platform. But the transparency tool revealed that the biggest political spender on the platform was Facebook.

Owning the media and ad tech gives tech companies unique opportunities. For instance, Apple very rarely discounts its products, but in the past month Amazon has had exclusive, lowest-ever prices on Apple iPads and Watches.

Amazon also led all Google search advertisers in 2017, according to a report by Searchmetrics. And Google doesn’t disclose what it pays to Apple for the right to be the default search engine for Siri and Safari, but Goldman Sachs estimates it to be $21 billion in 2018 and 2019 combined.

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