WSJ: WPP, Publicis, Omnicom to spend combined $800M on Amazon in 2018
- Three of the world's largest ad holding groups, Publicis, WPP and Omnicom, plan to increase their advertising spending on Amazon to reach $800 million, collectively, next year, The Wall Street Journal reported citing unnamed agency executives.
- WPP, the world's largest ad holding company, is expected to spend about $200 million on advertising with Amazon this year, according to CEO Sir Martin Sorrell. The Journal's sources said that that amount could jump 40% to 50% next year.
- Omnicom spends about $100 million with Amazon each year and could double that in 2018, according to the Journal, while Publicis is said to be boosting its current ad spend across Amazon's platforms from $200 million to $300 million,
Though Google and Facebook still command the lion's share of the digital ad market — WPP's GroupM predicts they'll account for 84% of all global digital spending this year, excluding China, per the Journal — Amazon is quickly making inroads into the space. Forrester Research forecasts that, by 2021, the Seattle-based company will surpass $2.5 billion in ad revenue.
While that figure might seem like a drop in the bucket compared to the tens of billions Facebook and Google command together, the Journal's report speaks to how marketers are eagerly seeking out out a third major digital advertising force to break the stranglehold the duopoly has and are willing to considerably boost their budgets along the way.
Amazon has a number of attributes that make it an attractive bet for agencies. Sorrell earlier this year cited its large user base along with its massive consumer data network that's likely going to grow considerably following a $13.7 billion acquisition of the upscale grocery retailer Whole Foods in August. Through Amazon's e-commerce business, marketers' ads can also appear where people are already close to making a purchase online, hitting a valuable area of the sales funnel that competitors frequently can't.
And with its digital assistant Alexa, Amazon has become an early leader in voice search — one of the emerging technology areas marketers are watching closely as connected devices continue to pick up traction with consumers. Recent findings from Juniper Research suggested marketers' ad spending on voice-powered digital assistants will reach nearly $19 billion by 2022, and the Journal's report reinforces that some of those budgets are likely going to Amazon.
Recognizing these strengths, Amazon has been steadily building out its advertising business in 2017 — in some cases literally with a new office in New York City. It's also tested tools like premium product pages for brands, which reportedly sell for $500,000, and the addition of more capabilities for advertisers. In June, it rolled out Advertiser Audiences, a self-serve platform that allows for greater segmentation and targeting using first-party user data.
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