Dhe online retailer Amazon spent more money on advertising in 2022 than any other advertiser before it. As calculated by the American specialist magazine Ad Age, Amazon’s advertising budget last year was 20.6 billion euros. That’s nearly double the €10.9 billion spent by Amazon in the 2020 pandemic year. For comparison: The American retailer Walmart spent almost 4 billion euros on advertising in 2022.
Compared to the previous year, Amazon’s advertising spending increased by 22 percent. At the same time, the company’s net sales grew 9 percent, the slowest since 1995. However, the advertising budget represents only a small fraction of the company’s expenses. Aggregated, advertising costs account for 4 percent of net sales. In 2021, this value was still 3.6 percent, which means a small loss of efficiency.
Adspend growth is likely to slow somewhat in the coming year, as evidenced by a look at the larger pot of sales and marketing spend, which includes adspend. Combined, that spending grew 30 percent in 2022. But only 19 percent in the fourth quarter, compared to 35 percent in the previous quarters. Advertising spending made up around half of the pot in 2022.
In a note to regulators, Amazon discussed the channels it uses to target customers. First of all, sponsored results in search engines were mentioned in the letter. This was followed by advertising on social media and elsewhere on the internet, as well as third-party endorsements.