Dive Brief:
- The ratio of ad spending to sales revenue is on the decline among some of the deepest-pocketed U.S. marketers, but consumer goods companies are bucking the trend, according to a new report from WARC Media.
- The top consumer goods marketers grew their ad-to-sales ratio from 11.6% in 2023 to 12.5% last year as they attempted to offset softer demand and pumped investment in channels like retail media. Collective ad spending for these companies jumped 36% between 2019 and 2025 while revenue growth increased 29% over the same period.
- By contrast, technology firms, including Alphabet and Meta, shrunk their ad-to-sales ratio from 13% in 2019 to 7.4% in 2025 while combined revenue ballooned 146%. The pullback from tech has weighed on several agency networks while the report’s larger findings illustrate what WARC calls a “two-speed marketplace” for advertising.
Dive Insight:
Among 25 major U.S. advertisers, the total ad-to-sales ratio, or how much a company spends on advertising relative to its revenue, declined over half a percentage point to 5.5% between 2019 and last year. The downward trend has been driven by technology platforms, such as Google, Meta and Netflix, that are able to own consumer attention instead of renting it, per WARC.
Consumer goods brands, including food and beverage and beauty and cosmetics marketers, are an outlier as they bet on advertising to preserve market share in a downturn and shift more budgets to retail media in the chase for precision. On the latter front, dollars once allocated for shopper and trade spend are now advertising line items, affecting the ad-to-sales ratio.
WARC analyzed spending patterns from six leading companies in the consumer goods space – PepsiCo, The Coca-Cola Company, The Estée Lauder Companies, L'Oréal, Nike and Procter & Gamble – and found all save PepsiCo raised their ad-to-sales ratios between 2019 and 2025.
Regarding Nike, the sportswear giant is trying to stage a turnaround amid stiffer competition in areas like running and an overswing toward performance during the pandemic. Consumer goods brands broadly have wrestled with years of post-pandemic inflation and price-sensitive shoppers.
WARC emphasized that the findings do not suggest that brands are abandoning advertising, as spend is generally robust. Global ad spend is forecast to grow 11.9% to $1.34 trillion this year despite dour consumer sentiment, WARC previously found. Rather, ad spending cadence has not kept pace with revenue gains in many instances. Tech companies riding a massive revenue wave — in many cases due to advertising from small- and medium-sized bussineses — are now commanding the consumer attention that other brands pay to access.
“The expansion of digital platform spend by smaller businesses and cross-border e-commerce sellers is by far outpacing growth in ad investment by big brands,” said Alex Brownsell, WARC Media’s head of content, in a statement. “This has major implications for the ecosystem of agencies and vendors operating in the enterprise market.”
While the paths of tech companies and consumer goods brands are fairly consistent, other categories are murkier. Walmart, Starbucks and Expedia have seen their ad-to-sales ratio rise while payments firms, including Visa and Mastercard, are down, WARC found.
Editor’s note: Informa, which owns a controlling stake in Marketing Dive’s publisher Informa TechTarget, is also invested in WARC. Informa has no influence over Marketing Dive’s coverage.
