In 2009-2024 brands spent over $ 30 trillion on marketing. Where did it go? What comes next?

The extractive business model of digital platforms siphoned billions of dollars from brands, media, journalism, and advertising agencies. Time now to act on their impact on growth, competition, & innovation.

Last week I urged advertisers, the media, journalists, and ad agencies to promote the proposal from two economists (recipients of the Nobel Prize for their earlier work) for a tax on digital advertising levied on the technology platforms whose revenues are mostly or significantly generated by ads: A solution to the power of big tech, toxic media, monopoly, and the awful state of advertising. This could be accompanied by the enforcement of anti-trust (in the U.S.) and competition laws (in the E.U.) on application stories to create a competitive industry open to innovators.

Why is this necessary and urgent?

Between 2009 and 2024 corporations 'spent' trillions on marketing.  Statista reported the 2023 number as $1.65 tr. In my work for enterprise-scale clients I saw 'expenditure' as LESS THAN 50% of the investments made in paid, owned, and earned marketing programs and resources. Over 15 years we can be sure marketing investments exceeded $30 trillion worldwide.

What did this growing expenditure achieve? Who gained? Who lost?

The goals of marketing are clear: sell today and build brand value for the long-term. But how is brand value measured, and how is the long-term forecast projected?         

Accounting conventions treat brands as intangible contributors to corporate valuations. A methodology for Brand Valuation has been published by the International Standards Organization, with the most recent version at ISO 10668.

Brand contributions to corporate valuations are measured by three consultancies: Brand Finance (independent), Interbrand (Omnicom); and Brandz (Kantar, now controlled by Bain Capital, but formerly part of WPP and a thus a partner with whose data I sometimes worked.) 

All three have now published their 2024 reports. All use different methodologies. All report widely different valuations, and on different trajectories. While they concur in ranking Apple the most valuable global brand, Brand Finance reports Apple at $517 bn (+ 74% over 2023), Interbrand at $489 bn (-3% down from 2023), and Brandz $1,015 bn (+15% over 2024).

The 2024 valuations are at Brand Finance, Interbrand, and Brandz.

Confusing. Perhaps a Marketing podcast host might interview David Haigh Greg Silverman and Martin Guerrieria to debate their methodologies? Perhaps the discussions could be expanded to include financial experts in corporate valuation, or to pair CMO's with CFO's. We are perennially told the greatest challenge for CMO's is to demonstrate effectiveness. So go to.

The marketing and advertising industries spend huge time and energy on increasingly disputatious measures of their inputs, in particular auditing standards for media audiences, and on conjuring new metrics like attention. Wouldn't it nice if a similar effort was devoted to standards for measurement of outputs i.e. of the effect of marketing on brand valuations? And wouldn't it be even nicer if that effort by the marketing profession was coordinated with the accounting profession, ISO, or other standards and best practices?

As the general insights and conclusions are similar, the following is based on Kantar’s Brandz valuations. By incorporating surveys of global consumer perceptions, Brandz arguably better captures qualitative brand equity as well as quantitative financial valuation.

As the valuations vary, what is perhaps more interesting are their trends over time, in particular over the span of 15 years from 2009 to today. In 2009 Brandz ranked Google most valuable brand as its dominance in search and increasing role on both the buy and sell sides of online advertising became institutionalized. Then in 2009 Facebook introduced the "Like" button, which changed the way we use social media, post, and interact online.

It's important as context that from Octobers 2009 to 2024 the S&P 500 grew from around 1500 to 5750, an ARR of 9.35%.

Where did the money go?

A simplistic narrative for the years 2009 to 2024 is that investment shifted to digital brands and digital media. The harsh reality is that marketing, advertising, and commerce shifted to a small number of digital platforms and application stores, principally owned by five monopolist corporations Alphabet (Google), Amazon, Apple, Microsoft, and Meta (Facebook, Instagram).

All three brand measurement companies, with almost all the marketing and advertising industries, miss the profound shift which incurred over this period. Traditionally, brands made products or created services. Consumers paid for the products or services, and the business recognized the surplus as profit. Starting with Google, digital platform businesses sell access to users of their services, for the right to advertise, communicate, and sell to their consumers. Users mostly do not pay, and the surplus recognized by the platforms is a rent.

It's a radically different business model. Economists and historians like Diana Coyle in Cogs and Monsters and Yanis Varoufakis in Technofeudalism. What KIlled Capitalism have recognized what practical marketers miss. An added aspect of the model is that the once economic law of diminishing returns no longer holds true. Network effects and close-to-zero marginal costs mean that there is no economic limit to the size of the business.

The outcome is monopoly, or monopsony, and certainly oligopoly.

Let's review what the trends in the brand studies tell us.

• Five big tech brands Apple, Amazon, Google, Microsoft, and Meta dominate with a valuation of $3.3 bn. Stripping out estimates of their product/service revenue, it's still over $1.9 bn.
• The valuation of five leading product/service brands in 2009 - Coca-Cola, McDonald's, Nokia, Walmart, Toyota - is a mere $ 421 million vs $1.6 bn if they had tracked the S&P 500.
• Nokia was destroyed by Apple, and formers icons like IBM and GE declined precipitously.
• McDonald's is unique in almost preserving its value. Much-vaunted Coca-Cola's brand valuation had a precipitous fall; TCCC's advertising prowess has always been over-rated.
• Nike in particular, and Starbucks, have in context been hugely successful in building brand value, demonstrating despite recent hiccoughs what matters is the long-term.

Product/service brands in 2009 without business models based on data surveillance and extraction lost at least $1.2 bn and 75% of their value.

Digital platforms, which generated most of their revenue from data surveillance, advertising and apps, gained at least $ 1.9 bn in value.

Not only did storied brands slowly decline or die fast, the study of brand valuations over recent years begs the question: where are the new business models like direct-to-consumer and the innovative product brands that have been stifled by Big Tech?

What's Next?

A groundswell for change is beginning to grow in a response to the dominance of Big Tech. It must be supported by a whole society approach, one that includes the marketing and advertising communities who have been so damaged by Big Tech, and government regulation.

Please note I do not believe the big tech oligopoly will decline through what was once the natural order of events, a new wave of innovation and creative destruction that will see new companies and brands emerge. It will not just happen for these reasons:

1. Unregulated big tech has proven that through acquisition or unfair competition potential competitors can be crushed.
2. Their financial war chests enable them to expand horizontally into completely new markets, such as Amazon in retail and healthcare, or Microsoft and Google in energy.
3. The rush to A.I. with its enormous demands for investment and computing power is excavating even wider and deeper moats between the Five and threats to their models.

In The Everything War, Dana Mattioli concludes with this quote: "I think Bezos doesn’t see a viable threat to Amazon other than government intervention, and you can see that in how much attention he’s paid to Washington, DC, in recent years,” Stacy Mitchell of the Institute for Local Self-Reliance.

That's why we need what Bezos and his cohort fear: government regulation on a global scale.

Stewart Pearson

Stewart believes in Consilience, the unity of knowledge across disciplines. He has lived, worked, and traveled globally in Europe, Asia, and the U.S. He settled in the Evergreen State and Seattle. After studying Statistics and Marxist Economics in the U.K. he had four decades of experience in marketing and advertising focused on building client brands directly and globally. He was Global Chief Client Officer and Vice-Chairman of Wunderman when it was the fastest-growing major agency in WPP. David Ogilvy once sent him a telex from India and Lester Wunderman told him stories of Picasso from the village in France where both of Stewart’s heroes had lived. Stewart is on LinkedIn and Twitter, and at scotthebrave@live.com.