Global marketing spend ‘to reach $2.4tn’
Global marketing spend is forecast to reach $2.4tn this year, according to Madison and Wall, the consultancy founded by former GroupM business intelligence chief Brian Wieser.
The global marketing industry is understood to be larger than the global advertising industry, since it spans a wider remit beyond “straightforward” advertising, the report noted.
To calculate the forecast, Madison and Wall took the most recent full-year financial results of 20 large companies that report both an advertising (or advertising and promotions) expense and a marketing (or sales and marketing) expense.
Its analysis found that this group of advertisers, which collectively accounted for $2tn of revenue last year, attributed 10.4% of revenue to marketing and 4.6% to advertising on a median basis.
“Put differently, advertising expense amounted to 40.7% of marketing, implying that marketing is nearly 2.5x the size of advertising,” the report summarised.
Based on this assumption, and using GroupM’s estimate that global advertising will reach $989.8bn in 2024, Madison and Wall has calculated $2.4tn in global sales and marketing expenditure this year.
Furthermore, the report added that the advertising-expense-to-marketing-expense ratio has been relatively stable when looking at figures from the past five years at around 41%.
Brands could be spending three times too much on social. You read that right