Sorrell: Amazon's ad business will be worth $100b

Advertisers, like Brexiteers, are looking to "take back control" of their data, the S4 Capital chief said.

Amazon’s advertising business is set to soar from its current value of about $12 billion (£9.1 billion) annually to $100 billion, Martin Sorrell predicted on a media call after his company, S4 Capital, reported its first annual results.

While Sorrell did not say how quickly he expects Amazon to hit the milestone, the figure is about double Facebook’s advertising revenues and comes close to rivaling Google’s of roughly $125 billion.

Amazon’s growth would come at the expense of the "long tail" of digital media, Sorrell said. Changing consumer behavior would also drive advertisers towards the platform: "Fifty-five percent of product searches in the U.S. are coming through Amazon, and voice is becoming increasingly important. They are gonna be a big factor."

Sorrell was speaking alongside leaders from the two businesses that S4 Capital comprises: Wesley ter Haar, COO at MediaMonks, and Peter Kim, CEO of MightyHive.

Explaining the group’s tagline, "Faster, better, cheaper," Sorrell said he wanted to "emulate the Brexiteers," with their promise to "take back control."

He said S4’s approach was responding to concerns from advertisers about the ways in which digital platforms were building walls around their "walled gardens," particularly the "fearsome five" – Google, Facebook, Amazon, and China’s Tencent and Alibaba.

"Recently the walled gardens, the fearsome five, have made it quite clear they’re very concerned about the dissemination of their data," Sorrell noted, although he added that this was for "good reasons," such as concerns about user privacy.

"What clients want to do is to take back control," he continued. "That’s the line the Brexiteers used to great effect, and it’s the same with the clients; they want to take back control of their destiny."

Sorrell added that while S4’s biggest clients at present are worth $10 million, he expected to have $20-million-worth of clients by the end of this year: "We want some whoppers, or whales, so to speak."

However, he dismissed suggestions that the trend of advertisers bringing capabilities in-house had peaked, saying the pattern was "becoming more intense rather than less intense."

This story first appeared on campaignlive.co.uk. 

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