Ad-to-Sales Ratios Slip to 5.5% at Top Brands as Ad Market Booms

The paradox at the center of a record ad year

The global advertising market is having one of its strongest years on record. The companies people tend to think of as the biggest advertisers are not the main reason.

WARC Media's latest Global Ad Trends report, "The cost of being seen," released in mid-October, finds that the world's largest brand owners are putting a shrinking share of their sales revenue into advertising. Consumer goods companies are the main exception.410 Across 25 large US-based advertisers, the combined advertising-to-sales ratio fell from 6.1% in 2019 to 5.5% in 2025.1 Their total ad spend did not fall. It rose 56% over those six years, but revenue grew 73%, so budgets fell behind the companies' own growth.25

The report arrived about a week after WARC Media raised its global forecast. It now expects worldwide ad spending to grow 11.9% in 2026 to $1.34 trillion, after roughly 10% growth in each of 2024 and 2025.1117 Put the two findings together and the picture is clear: the ad economy is growing quickly, but the growth is coming less and less from the blue-chip advertisers that have long anchored agency holding companies and big media deals.

Big Tech is the biggest drag on intensity

Almost every outlet that covered the report agrees on the main point: large technology companies account for most of the decline. Alphabet, Meta, Microsoft and Netflix together cut their ad-to-sales ratio from 13.0% in 2019 to 7.4% in 2025. Over the same period their combined revenue rose 146%, from $379 billion to $931 billion.17 WARC estimates that if the four had kept their 2019 ratio, they would have spent $121 billion on advertising in 2025, which is $52 billion more than they actually spent.24 Those figures imply actual 2025 ad spending of about $69 billion for the group, which matches 7.4% of $931 billion.

The obvious irony is that Alphabet and Meta are also the companies earning most of the growth in the ad market. WARC's explanation is the difference between owning attention and renting it. A company that controls a huge audience can promote its own products on its own platforms without paying someone else for reach.35 On that reading, the falling ratio at these companies is less a sign of caution than a structural benefit. Their most valuable promotional space is space they already own.

This matters for interpreting the ratio itself. When Meta's ad intensity falls, it does not mean Meta has lost faith in advertising, since its business is built on other companies' faith in it. The ad-to-sales ratio was designed to describe companies that have to buy their way into consumers' view. Applied to platform owners, it partly measures how little they need to.

Consumer goods giants move the other way

Consumer goods is the one sector that clearly runs against the trend. WARC looked at six companies: Coca-Cola, Estée Lauder, L'Oréal, Nike, PepsiCo and Procter & Gamble. Five raised their ad-to-sales ratios between 2019 and 2025, and PepsiCo's stayed roughly flat.27 Their combined ad spend rose 36% over the period, ahead of 29% revenue growth. The group ratio climbed from 11.6% in 2023 to 12.5% in 2025.3

WARC gives two reasons, and both deserve attention. The first is weaker sales. If a company holds its marketing budget steady while revenue stalls, its ratio goes up without any new commitment to advertising.1 The second is accounting as much as strategy. Money that sales teams used to spend on trade and shopper marketing is moving into retail media, and once it does, it is counted as advertising.45

That second point should make readers cautious about treating the consumer goods increase as a return of brand-building. Some of the rise is probably the same money moving to a different line in the accounts. Retail media is now large enough for this to matter at the level of the whole market: WARC's third-quarter forecast puts it at $202.1 billion this year, up 14.3% and bigger than TV at $176.2 billion.14 The coverage supports this cautious reading. WARC itself links the higher intensity to softer sales and reclassified budgets, not to bolder ambitions.

A messier middle

The 15 remaining advertisers, which are neither tech nor consumer goods companies, show a less consistent pattern. Weighted by revenue, their average ratio was flat to slightly higher, but 10 of the 15 lowered their ratios between 2019 and 2025.1 Ford went from 2.3% to 1.6% and General Motors from 2.7% to 1.7%. Visa slipped from 4.8% to 4.2% and Mastercard from 5.6% to 4.0%. McDonald's fell from 1.7% to 1.3% and Target from 2.0% to 1.4%.24 Marriott, Booking Holdings, Eli Lilly and The Home Depot also became less ad-intensive. Amazon and Yum! Brands stayed roughly flat, while Walmart, Starbucks and Expedia went up.7

The difference between the weighted average and the individual counts is worth noting. A flat weighted figure alongside a majority of companies cutting back suggests a few large companies, such as Walmart, are offsetting widespread modest declines elsewhere. Walmart is a notable case because it runs one of the most developed retail media businesses in the US. That is analysis, not a WARC finding, but it fits the report's view that owning a channel changes how a company advertises.

There is also a small inconsistency in how the sample is described. Several outlets call the 25 companies "US-based" or "US-listed," yet the consumer goods group includes L'Oréal.25 The coverage does not explain this. It is a reminder that the group is a selected sample of large advertisers, not a census, and the eCommerceNews write-up notes that WARC used supplementary category data where company reporting differed.5

Where the money is actually going

If large brands are not driving growth, something else is. WARC's forecast points clearly to social media. Social ad spending is expected to grow 21.3% this year to $394.6 billion, the fastest of any major channel, and to pass $500 billion by 2028.1115 Search is forecast to rise 14.2% to $295.7 billion. Together, social, search and retail media account for 66.4% of global ad spend, a share WARC expects to reach 70% by 2028.1219

The money is also concentrated in a few companies. Excluding China, Alphabet, Amazon and Meta are expected to take 59.7% of global ad spend this year, or $659.6 billion, rising to 61.5% by 2028.18 PPC Land, working from WARC's growth rates, estimated that social, search and retail media together absorb about 92% of this year's additional ad dollars. That is the outlet's own calculation, not a WARC figure.12

WARC's Alex Brownsell connects the two reports directly. He describes a "two-speed" market in which digital platform spending by smaller businesses and cross-border e-commerce sellers is growing far faster than investment by major brands. He warns that this has major consequences for the agencies and vendors that serve enterprise clients.56 BestMediaInfo makes the same point more bluntly: growth in the overall market may not lead to similar growth in spending by the multinationals that have historically provided much of the big agency networks' business.3

How solid is the backdrop?

The coverage diverges more on the size of the headline forecast than on its direction. PPC Land points out that WARC's June revision had put 2026 growth at 8.9%, so the October figure is a 3-point upgrade in one quarter. WPP Media's midyear projection was far lower at 4.4%, although the two use different definitions and baselines.12 WARC attributes the strength to corporate AI investment and to the Winter Olympics, the FIFA World Cup and the US midterm elections, and it lists further escalation of global tensions as a downside risk.1120 It already expects growth to slow to 8.4% in 2027 because comparisons will be tougher.13

Several of those drivers are one-off events, and the AI-related spending comes from a category, technology and electronics, that WARC expects to grow 20.7% this year, with 40.2% of that spending going to social media.15 This supports the two-speed reading. A large share of the boom comes from newer companies and AI firms competing to acquire customers, not from established brands raising budgets.

The takeaway

The most reasonable reading of the coverage is that big brands have not given up on advertising. Their ad budgets grew by more than half in six years. What has changed is how important they are to the market. Platform owners can promote themselves on audiences they already control. Consumer goods companies are partly relabeling trade spending as advertising. Car companies, payment networks and restaurant chains are mostly letting revenue outpace their ad budgets. Meanwhile, the self-serve, performance-driven, social-heavy part of the market keeps growing faster than the rest.

For social platforms this is close to ideal, because their growth depends less on any single large client. The pressure falls mainly on agencies, which are still organized around a small number of large advertisers.