Exploring Annual Global Marketing Costs of Amazon by the Numbers
The 2021 report of the annual global marketing costs of Amazon revealed an advertising spend of $16.9 billion, making it likely the biggest advertiser in history. The company’s goal would seem to be to become as ubiquitous on the internet and airwaves as the company’s deliveries, vehicles, and personnel are on the streets.
As for Amazon’s marketing, in the fiscal year 2021, Amazon’s marketing expenses came to roughly $32.6 billion, up from $22 billion in 2020.
There’s an interesting story here about the pandemic and about supply and demand: According to Amazon, “advertising and other promotional costs to market [their] products and services” went up $6 billion in 2021—that’s 55% growth, after a somewhat low year in 2020. Amazon focused this budget on targeted online advertising, TV ads, Amazon Web Services, and overhead costs like marketing staff.
As you read this guide, see how the skyrocketing demands for Amazon’s products and services starting in the spring of 2020 meant less need for marketing—and more need for those resources elsewhere—and how Amazon’s marketing department came back in 2021 bigger than ever.
Top Datapoints (Editors’ Picks)
Let’s start by highlighting the statistics that stand out:
- 40% of all online sales take place on Amazon.
- As of 2021, Amazon accounted for 8% of global digital advertising revenue…
- …And that’s projected to be over 13% of global ad revenue within five years.
- Amazon ad revenue by the second quarter of 2020 was up 40% to $88.9 billion.
- Amazon’s 2021 ad revenue exceeded Microsoft’s $10+ billion.
- Amazon’s worldwide net sales rose 38% in 2020 to $386 billion.
- Amazon spent $4.2 million on new TV creative in one week in 2019.
- Procter & Gamble, Unilever, and Alphabet (Google) each spend around $8 billion on advertising, or just half of Amazon’s budget.
- Amazon cut marketing expenses by roughly 33% in the second quarter of 2020 to manage a demand surge caused by the pandemic.
How Much Is Amazon’s Marketing Budget?
Amazon’s most relevant marketing channels are third-party customer referrals, sponsored search, social and online advertising, television advertising, and “other initiatives.” Amazon’s annual advertising spend was up to $10.9 billion in 2020.
Amazon’s Advertising Investment
The annual global marketing costs of Amazon in 2021 were roughly $32.6 billion, up from $22 billion in 2020.
Among the big spenders like Procter & Gamble, Unilever, and Alphabet (Google), Amazon exceeds other top advertisers: Its advertising budget is about twice any of theirs. When you think about the diverse products, sites, and services these brands offer, it’s more than likely that all four of these companies are a big part of your day.
- In 2021, Amazon’s global marketing expenditure was about $32.6 billion.
- The annual global marketing costs of Amazon in 2021 were up from $22 billion in 2020, with an advertising budget of just $10.9 billion.
- Procter & Gamble, Unilever, and Amazon’s tech rival Alphabet each spend around $8 billion on advertising—half of Amazon’s budget.
- Brian Wieser, global president of business intelligence at Group M, said Amazon is on track to be “the biggest advertiser in history,” based on Amazon’s annual report.
World’s Top Advertisers
Globally, 2021’s largest advertiser was Procter & Gamble, with an $8.1 billion ad spend. Amazon came in second with $4.8 billion on advertising, and Unilever was close behind at $4.7 billion.
The grand total of all advertising expenditures in the world for 2021 came to $722.84 billion. How much of that did Amazon account for, and how much did their marketing budgets rise after a quiet 2020? Amazon spent “only” 4.8 billion that year, just between 2021’s top advertisers, Procter & Gamble ($8.1 billion) and Unilever ($4.7 billion).
- Global advertising expenditures for all companies totaled $722.84 billion in 2021.
- Procter & Gamble was the 2021 top advertiser worldwide, with $8.1 billion spent on promotion.
- Amazon was second on the list, with an ad spend of 4.8 billion, followed by Unilever at $4.7 billion.
Amazon Marketing Expenses During the Pandemic
In the Amazon Marketing Cost Cut Initiative, Amazon brought down marketing expenses by 33% in the second quarter of 2020 to use those resources to manage the demand surge for online shopping and Amazon Web Services as people stuck at home started ordering everything for delivery, streaming shows, and using apps that rely on Amazon’s web services.
On the upside, Amazon’s revenue jumped up 40% to $88.9 billion, and the category containing ad sales grew 41% to $4.22 billion. All told, Amazon net sales went up 38% in 2020 to $386 billion.
It may seem counterintuitive, but pulling back on marketing during the pandemic was a good idea. Marketing exists to increase demand. But because of the pandemic, that demand was already spiking. Amazon decided to use those resources elsewhere, as the pandemic impacted other parts of the business.
- Amazon cut marketing expenses by roughly a third in the second quarter of 2020.
- Amazon revenue was up 40% to $88.9 billion in the same period.
- The company’s “other” category, mostly ad sales, grew 41% to $4.22 billion.
- Amazon’s worldwide net sales grew 38% in 2020 to $386 billion.
- Amazon trimmed ad and promotion spending by just 1% to $10.9 billion in 2021.
How Much Do Brands Spend On Amazon Marketing?
We’ve discussed the annual global marketing costs of Amazon’s own spending on advertising and where that sits on the global scene. But what about advertising revenue? Which is to say, what about other companies marketing on the platform itself? Companies and third-party sellers know the value of marketing their goods on Amazon, where search results can make or break your revenue.
Amazon’s Share of Worldwide Advertising Revenue
While still much lower than Google Services’ $69.4 billion revenue in 2021’s fourth quarter, Amazon’s ad revenue was larger than the 2021 ad revenue of Microsoft, Snapchat, and Pinterest combined. Experts even compare Amazon’s ad revenue to that of the global newspaper industry.
You may see ads for Amazon itself, its drivers or warehouse workers, or employment opportunities, but you’re just as likely to see product ads on other websites linking back to Amazon and other third-party channels that Amazon uses to get its message across. TV ads, newspaper and print ads, and more: You’re not likely to go too long on a given day without seeing an Amazon logo, branding, or packaging.
- In 2021, Amazon’s advertising sales exceeded YouTube’s $28.8 billion and Microsoft’s $10 billion.
- Google Services’ revenue as of the fourth quarter of 2021 was $69.4 billion—still much higher than Amazon’s.
- Amazon’s 2021 revenue is greater than Pinterest’s ($846.7 million) and even Snapchat’s ($1.3 billion).
- In the fourth quarter of 2021 growth of Amazon’s ad business reached $9.7 billion, for 33% growth year-over-year.
- In 2020, LinkedIn and Twitter’s annual advertising earnings were $3 billion each. Snapchat’s was approximately $2.5 billion, while Pinterest’s revenue was $1.7 billion.
- In 2021, Snap’s total ad revenue was $4.12 billion, and Pinterest’s was $2.58 billion. Amazon’s ad revenue increased by more than $3 billion in the second quarter of 2021 alone, meaning more than those other companies combined.
- Amazon’s advertising unit is estimated to be about 2.4 times larger than that of Snapchat, Twitter, Roku, and Pinterest combined.
Marketing Pricing for Amazon
Monthly, companies may pay anywhere from $9,000 all the way up to $60,000 for Amazon marketing services.
When creating an Amazon ad budget for your business, it’s best to choose a daily budget over a lifetime one so you have room to tinker with the details as you learn what works and doesn’t. Lifetime budgets are required to be $100 or more, and you can only set them for a sponsored brand campaign anyway.
Think of it this way: You only need to spend as much as it takes for your ads to be profitable. That means you make more money from the increased sales your ads bring in than you spent on the ads themselves. If you find that you are consistently making profits, it’s time to think about increasing your budget.
But that’s only part of the story: We’re also seeing how advertisers are thinking more and more about their brands—and their presence on Amazon. JungleScout tells us that “Sponsored Products,” those that show up at the top of the search results page, is the most popular ad type among sellers. Over the last three years, however, there’s been a shift towards “Sponsored Brands” and “Sponsored Display ads”—both of which mean there’s value in building your brand presence on Amazon.
- Companies pay $9,000 to $60,000 per month for Amazon marketing services—An average daily budget for Amazon ads between $300 and $2,000.
- In 2021, 77% of all Amazon ads were for sponsored products, 20% for sponsored brands, and just 2% for sponsored display ads. All three categories are growing.
- You can start running ads at $5 to $10 per day, although it’s said most successful campaigns spend $50 to $100 per day on Amazon ads.
The pandemic was good for business: Amazon’s worldwide net sales rose 38% in 2020 to $386 billion. Ad revenue was up 40% by the second quarter, to $88.9 billion. At the same time, Amazon slashed marketing budgets by 33% in the second quarter of 2020.
Amazon is a major player on the world stage when it comes to ad revenue: From 2021 to 2026, Amazon is expected to rise from representing 8% to over 13% of global ad revenue, from $26 to $85 billion. That’s a rise of 1% of the total ad revenue on Earth every year.
The most surprising finding, however, could be that 40% of all online sales take place on Amazon. When you think about the number of websites out there, that means that a staggering two for every five purchases online take place at Amazon.
In terms of the annual global marketing costs of Amazon, the company is among the world’s top advertisers. Amazon is unique because it can conceivably offer and go to market with almost any product.