Big brand ad spend lags sales as ad-to-sales ratio drops to 5.5%

A booming market, but not because of the biggest brands

The global advertising market is growing at its fastest pace in years. The world's largest advertisers are not the main reason. New WARC Media research shows that 25 large US-based advertisers spent a smaller share of their revenue on advertising in 2025 than in 2019. Their combined advertising-to-sales ratio fell from 6.1% to 5.5%1112. The report, titled Global Ad Trends: The cost of being seen, was published on October 1514.

The headline number is easy to misread. These companies did not cut their budgets. Their combined ad spend rose 56% over the six years. Their revenue grew faster, by 73%1318. Some coverage put it bluntly, saying the world's biggest brands "spend less on ads"1516. Other outlets made the more accurate point that advertisers are spending more in dollars but less as a share of sales19. The second reading is the correct one. What matters here is the shrinking share, not any absolute retreat. Even so, a shrinking share has real consequences for everyone who sells advertising to these companies.

The timing makes the gap stand out. One week before the intensity report, WARC raised its global forecast. It now expects ad spend to grow 11.9% to $1.34 trillion in 2026, after 10% growth in both 2024 and 202518. That is a big jump from the 8.9% growth WARC had projected in June5. So the market is speeding up while its best-known spenders become less advertising-intensive. That tension is the real story.

Big Tech is the main driver

All the coverage agrees on one point: technology platforms explain most of the decline. Alphabet, Meta, Microsoft and Netflix saw their combined ad-to-sales ratio fall from 13% in 2019 to 7.4% in 2025. Over the same period their combined revenue grew 146%, from $379 billion to $931 billion1220. WARC calculates that if the four had kept their 2019 ratio, they would have spent $121 billion on advertising in 2025. That is $52 billion more than they actually spent1114.

WARC's explanation is ownership of an audience. Companies like Alphabet and Meta can grow through their own platforms. They depend less on paying other media owners to reach consumers11. The report frames this as owning attention versus renting it13. This is the clearest link to the social media part of the story. The companies that run the biggest social and search properties are the ones that need paid media least, because they already control the audiences everyone else pays to reach.

There is an irony here. WARC expects social media to be the fastest-growing channel this year, up 21.3% to $394.6 billion, and to pass $500 billion by 2028210. Alphabet, Amazon and Meta together are expected to take 59.7% of global ad spend outside China in 2026, or $659.6 billion. WARC sees that share rising to 61.5% by 202849. Put the two reports together and the picture is lopsided. The platform owners collect a growing share of the market's revenue while spending a shrinking share of their own revenue to buy attention elsewhere.

Consumer goods companies go the other way

Consumer goods companies are the main exception. WARC looked at six of them: 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 flat1319. As a group, their ad spend rose 36% while revenue rose 29%. Their combined ratio climbed from 11.6% in 2023 to 12.5% in 20251214.

This should not be read as a straightforward vote of confidence in advertising. WARC gives two causes. One is softer sales growth. The other is an accounting change: trade and shopper marketing budgets are moving into retail media, so money that used to sit under sales is now counted as advertising1118. The report also notes that a rising ratio does not always mean a bigger budget. A company that holds spending steady while sales fall will show higher advertising intensity without investing more1120. Part of the consumer goods increase is therefore a change in how spending is classified, and part reflects weaker sales, not just a decision to spend more.

That ties directly to the retail media boom. WARC expects retail media to grow 14.3% to $202.1 billion this year10. In WARC's channel table, retail media is now bigger than TV, which stands at $176.2 billion3. When packaged goods companies move shopper marketing money into retailer ad networks, it shows up as advertising growth. Some of that growth is existing commercial spending under a new label, not new demand.

Everyone else: a mixed picture

The other 15 advertisers, outside tech and consumer goods, show no clear pattern. Weighted by revenue, their average ratio was flat or slightly higher. Yet 10 of the 15 cut their individual ratios between 2019 and 202512[13]:

• Carmakers: Ford fell from 2.3% to 1.6%, and General Motors from 2.7% to 1.7%14.
• Payments: Visa slipped from 4.8% to 4.2%, and Mastercard dropped from 5.6% to 4%11.
• Restaurants and retail: McDonald's went from 1.7% to 1.3%, and Target from 2% to 1.4%18.
• Other decliners: Marriott, Booking Holdings, Eli Lilly and The Home Depot12.
• Flat: Amazon and Yum! Brands14.
• Increases: Walmart, Starbucks and Expedia11.

The gap between the weighted average and the individual results is worth noticing. Most of these companies became less ad-intensive, but a few large-revenue firms kept the weighted figure steady. Walmart is one of them. Its increase fits the retail media logic: a retailer that runs its own ad business has reasons to treat advertising differently from a payments network or a carmaker.

A two-speed market

WARC's head of content, Alex Brownsell, describes a "two-speed marketplace." In his account, smaller businesses and cross-border e-commerce sellers are increasing their digital platform spending much faster than big brands are increasing theirs1314. He said the shift has major implications for the agencies and vendors that serve large enterprise clients1720.

This is the most important takeaway from the report. Large agency networks have historically depended on big multinational advertisers for a large share of their business. If those clients keep putting a falling share of revenue into advertising, overall market growth will not turn into matching growth for agencies19. Meanwhile, the money that is growing tends to go straight into self-serve auctions on social, search and retail platforms, with few intermediaries involved.

The forecast data supports this. Social media, search and retail media are expected to take 66.4% of global ad spend in 2026, rising to 70% by 2028610. Analysis by PPC Land, which is its own calculation and not a WARC figure, estimates that these three channels account for about 92% of all new ad money this year5. Traditional channels are falling behind. By that same reading of WARC's figures, TV grows only 1.2% this year, despite a calendar with the Olympics, the FIFA World Cup and the US midterms, and is forecast to shrink in 20274.

What it means

Taken together, the two WARC reports say that the advertising market's growth is no longer led by its largest brand owners. Three forces drive the growth instead. One is the long tail of small advertisers buying performance media. Another is AI and technology companies spending to win customers: tech and electronics is the fastest-growing category, up 20.7%, with social media taking 40.2% of its budgets19. The third is the reclassification of trade spend into retail media.

Two caveats apply. First, the intensity study covers only 25 US-based companies12. It reflects the behavior of big American corporations, not the whole global market, even though some headlines described it as the "world's" biggest brands16. Second, WARC expects growth to cool to 8.4% in 2027, which it attributes to tougher comparisons and a return to normal after unusually strong years2.

A slowdown would put more pressure on the gap described here. When small advertisers and AI startups pull back, big brands become the market's base demand. On current trends, that base is growing more slowly than the companies themselves. The platforms will probably be fine either way, because they own the audiences. The agencies and media owners that depend on enterprise budgets are the ones exposed if the ratio keeps falling.