How FANG is sinking its teeth into advertising spending

A decade ago, the FANG gang—Facebook, Amazon, Netflix and Google—still had their baby teeth when it came to their own ad spending.

A decade later, the four have bought their way into the top tier of U.S. and global advertisers.

Worldwide ad spending for FANG—Wall Street lingo for these internet stocks—soared to $17.5 billion in 2018 from $1.1 billion in 2009, according to Ad Age Datacenter’s analysis.

FANG revenue over that period surged to $441 billion from $51 billion. But ad spending grew faster. FANG’s worldwide ad spending as a percent of revenue nearly doubled to 4.0 percent in 2018 from 2.2 percent in 2009, as all four companies boosted the portion of revenue they put into advertising.

Over that period, Facebook’s ad spending shot up to $1.1 billion in 2018 from $5 million in 2009. Amazon’s spending climbed to $8.2 billion from $593 million.

A decade ago, no internet company appeared in Ad Age’s ranking of the 100 biggest global advertisers. The Ad Age Leading National Advertisers ranking of top U.S. spenders for 2009 included just one internet company, eBay.

It’s a different picture today. FANG and other internet companies now are driving ad spending growth both globally and in the U.S.

Ad Age Leading National Advertisers 2019’s top 200 ranking included 19 internet-centric companies whose U.S. spending last year jumped a whopping 23 percent. For the first time, all four FANG companies ranked among the top 100 U.S. spenders in that report.

Among the 200 biggest U.S. advertisers, seven of the 10 companies with the highest percent spending growth last year were internet plays.

The Ad Age World’s Largest Advertisers 2019 top 100 ranking included 12 internet companies that last year increased global spending by 26 percent.

In the global ranking, six of the 10 marketers with the highest percent spending growth were internet companies.

It’s worth noting that three of the four FANG members—Facebook, Google parent Alphabet and Amazon—are both big ad sellers and buyers. Facebook last year generated 99 percent of its worldwide revenue from advertising; at Alphabet, 85 percent of revenue came from advertising.

Amazon’s “Other” revenue bucket last year had $10 billion in net sales, primarily from the sale of advertising services. That’s a drop in the bucket—just 4 percent—of the company’s net sales.

Netflix has debunked talk that it may start selling advertising on its video-streaming service. Netflix earlier this year told investors: “We, like (AT&T-owned) HBO, are advertising-free. That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false.”

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