Amazon advertising revenue could be huge

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The CEO of global advertising agency WPP Martin Sorrell says that Amazon has every chance of challenging Google and Facebook’s dominance in online advertising.

Speaking at the world economic forum in Davos, Sorrell, who leads the worlds’s biggest ad agency said that he estimated that Google and Facebook control 75% of global online advertising. But Amazon is growing swiftly.

Sorrell said: “Amazon threatens Google in two ways. One is search — 55% of product searches in the United States emanate from Amazon. So that’s a big question for Google. Amazon’s advertising platform itself — Google has about $100 billion in advertising, Facebook about $40 billion. Amazon has a fairly paltry pimple really, $2 billion or so, but growing quite quickly.”

He said that in 2017 his company spent roughly $5 billion with Google, about $2 billion at Facebook and $200 million on Amazon for WPP clients. “This year we’ll be ramping up to about $300 million,” Sorrell said, “so it’s growing, but it’s at a very small scale.”

There’s no doubt that Amazon has advertising ambitions and as, as we wrote a few days ago, they have made some advances and also lodged patents that could help them develop what is potentially a huge revenue stream. In particular, the potential for video reviews that incorporate advertising could be significant.

One Response

  1. I have read that forecasts for Amazon advertising revenue for 2018 will be $4.5 billion rising to $6.6 billion in 2019 which will still be small in comparison to Google and Facebook but with a profit margin of between %30 to %50. Where with th is Amazon can fund other ventures.

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