Sir Martin Sorrell says Amazon's ad business is a 'pimple' but will 'grow violently'

Key Points
  • Sir Martin Sorrell, CEO of advertising agency giant WPP, believe's Amazon's ad business is slated to grow violently.
  • Amazon's strength as a marketplace makes it a good home for transactional advertising.
  • Sorrell does not believe that this creates a significant threat to Facebook and Google, though.
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Sir Martin Sorrell, the CEO of advertising agency giant WPP, believes that Amazon's ad business is slated to grow "violently," but he says it won't pose a threat to Google and Facebook.

"I referred to [Amazon] I think on CNBC before as a pimple, that's probably a little bit unfair, but it's certainly growing. It's becoming a bigger pimple, or a boil, or however you want to put it," Sir Martin Sorrell said on CNBC's Squawk Box on Friday.

Amazon's advertising clout today is very small. This past year, WPP clients spent $5 billion on Google and $2 billion on Facebook for advertising, whereas Amazon only got $200 million. But he said in the next year, he plans to give the online marketplace $300 million for advertising. With these numbers, he expects Amazon's ad presence to "grow violently."

Amazon's position as an online marketplace gives it an advantage for transactional advertising.

"That [search] data will be controlled by Amazon and that disintermediates our clients and their relationship with the consumer," said Sorrell. "We had a situation with Nike I think a few months ago where they said, no, they're not going to go on the Amazon platform but they quickly reverse that. You saw the impact and I think they hit a high on the back of that."

Even if Amazon becomes a bigger competitor and continues to grow exponentially, Sorrell still doesn't believe that it will be an issue for Google and Facebook considering their expertise and continual growth.

"At the end of the day, they continue to rise almost inexorably." he said.