Amazon is threatening Google's ad space monopoly, Martin Sorrell says

  • The CEO of WPP, the world's largest ad company, explained why he saw a growth trajectory ahead for the American e-commerce giant's ad business
  • The advertising tycoon said he spent about $5 billion with Google last year, with about $2 billion at Facebook, and $200 million on Amazon

Amazon is threatening Google and Facebook's dominance of the digital ad space, Martin Sorrell told CNBC at the World Economic Forum in Davos on Tuesday.

The CEO of WPP, the world's largest ad company, explained why he saw a growth trajectory ahead for the American e-commerce giant's ad business.

"Amazon threatens Google in two ways. One is search — 55 percent of product searches in the United States emanate from Amazon. So that's a big question for Google," Sorrell said.

Still, Amazon's market share doesn't come close to the duopoly of Facebook and Google. The two tech and media behemoths control about 75 percent of the digital ad space, Sorrell said.

"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."

The advertising tycoon said he spent about $5 billion with Google last year, roughly $2 billion at Facebook and $200 million on Amazon on behalf of WPP's 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."

Sir Martin Sorrell
Cameron Costa | CNBC
Sir Martin Sorrell

'Techlash'

Sorrell also spoke about the issue of "techlash," the rising tide of popular discontent with the ever-expanding reach of global technology companies. There are "big issues" surrounding privacy and employment in this realm, the British CEO described.

"A large reason for the rise of populism on both sides of Atlantic surrounds these issues around privacy and certainly about jobs, and how the economy will develop at a time when technology is becoming increasingly important."

"Yesterday, we had Amazon launching its employee-less store in Seattle," Sorrell noted. "And the big question is does automation — do improvements in technology — actually create jobs, destroy them or keep them the same?"

Sorrell took over WPP as a small British wire shopping cart company in 1986, serving as its chief executive since that year. Its revenue in 2016 was more than $20 billion.

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