Publicis, Omnicom, and WPP to boost ad spending with Amazon by 40% to 100% in 2018 as they search for an alternate to the Facebook/Google duopoly
Alexandra Bruell / Wall Street Journal :
Context & Ripple Effects
WPP chief Martin Sorrell had already laid out the concentration problem a year earlier: the firm put $5.5B into Google and $1.75B into Facebook while its much-hyped $70M Snapchat bet stayed marginal — two platforms absorbing the bulk of holding-company budgets. This move is the agencies' first coordinated attempt to fund a third pillar rather than just talk about one.
It lands on receptive ground: sources reported weeks later that Amazon was preparing to expand ad offerings in search and video and push off-platform sales through partners like Kargo (Amazon's 2018 ad expansion plans), giving the agencies something concrete to buy into beyond retail media.
First-order effects
- Publicis, Omnicom, and WPP redirect client budgets toward Amazon at 40%-100% growth rates for 2018, making Amazon a line item comparable to their established platform allocations instead of an experiment.
- Amazon gains the validation of the three largest agency groups' buying power at exactly the moment it is scaling inventory — the demand signal and the supply expansion reinforce each other.
Second-order effects
- Google and Facebook face negotiating leverage from buyers who now have a credible alternative, pressuring the duopoly on pricing and terms for the first time since they dominated agency planning.
- The competitive edge cuts both ways: Amazon itself began pulling back from Google, testing off-site display ads for merchants while moving to stop buying Google shopping ads (Amazon's display test and Google shopping pullback) — ad dollars flowing between rivals, not just toward them.
Third-order effects
- The bet structurally succeeded: GroupM later measured the Google-Facebook-Amazon triopoly at 90% of US digital ad spend in 2020 (GroupM's triopoly share data) and 80-90% outside China globally — the 'alternative' became a third member of the same concentrated structure.
- With Amazon simultaneously the biggest seller of ads and, per Kantar, the top US advertiser at $6.9B in 2019, the industry drifts toward a market where the largest buyer and largest sellers are the same companies — a conflict regulators and advertisers will eventually have to price in.
The trend: Agency diversification away from the Facebook/Google duopoly is accelerating consolidation into a three-player digital ad market, with holding-company budgets acting as the funding mechanism.