NEW YORK: Facebook and Google completely dominate digital advertising at present, but at least three major ad holding companies are reported to be planning to increase their spending with Amazon by a significant amount next year.
According to the Wall Street Journal, “multiple agency executives” at Omnicom, Publicis and WPP have indicated that their advertising budgets allocated to the e-commerce giant could grow by a collective $800m.
Taking each in turn, the Journal’s sources revealed that Omnicom spends around $100m with Amazon, but that figure could double next year and continue at the same rate in the coming years.
Publicis currently spends around $200m with Amazon, but plans to increase its spending by about 50% to $300m next year. And WPP, which also currently spends around $200m with Amazon, may increase its adspend by 40% to 50%.
“We are absolutely leaning into Amazon as an ad partner and think there are big advantages to our clients,” said Kelly Clark, CEO of WPP’s GroupM.
Advertising accounts for a tiny proportion of Amazon’s overall revenues at present, but the company has been growing the business with offers that include search and banner ad inventory on its own platform, as well as ads served during NFL games streamed to Amazon Prime subscribers.
According to the Journal, Amazon’s appeal rests in its massive audience and data, while the ad holding companies are keen to identify a third large platform that can compete with the “duopoly” of Facebook and Google.
The sheer scale of their hold over the digital advertising landscape was revealed recently in WARC analysis that found Facebook and Google will account for 61% of all online adspend this year, up from 58% in 2016 and 47% in 2012.
In addition, their anticipated $133bn in combined revenue will equate to a quarter of all global adspend in 2017, up from a fifth in 2016 and just 9.4% in 2012.
What’s more, at least half of global marketers expect to increase their spending on the two tech giants next year, according to WARC’s Toolkit 2018, which included a survey of 616 marketing and advertising professionals from around the world.
But the survey also revealed that 29% expect to increase their spending with Amazon in 2018, while another 12% will keep their spending at the same level.
“Amazon’s recent attempts to sell itself as an ad platform looks likely to bear fruit,” the report noted.
Sourced from Wall Street Journal; additional content by WARC staff