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Amazon's Ad Business Is Already (Frighteningly) Big. We Just Don't Know Exactly How Big

By Published on .

Ad Age's Scanner is your mobile-ready executive summary: must-know media and marketing news summed up in 400 words or less.

As Angela Doland noted in this morning's Ad Age Wake-Up Call, WPP is cutting its full-year forecast, predicting 0-1% revenue growth. That news has resulted in the market hammering WPP's share price, overshadowing another striking stat that emerged in the global ad giant's earnings call. Business Insider's Shona Ghosh writes this about something WPP chief Sir Martin Sorrell said this morning:

During WPP's half-year earnings call, he estimated that Amazon had earned $2.5 billion (£1.95 billion) from digital advertising. He didn't give a time frame, but the wider context of his remarks was digital ad spend in 2016.

Flashback: "Amazon: The Quietest Big Ad Business in Tech Would Like Your Brand Ads, Too" -- that's an Ad Age headline from April 2013. At the time, Amazon had just built its own demand-side platform (DSP) for ad retargeting across web properties, leveraging the vast amount of data the retailer collects on its own customers. And last October, The Wall Street Journal suggested that "ad buyers see the e-commerce powerhouse as a sleeping giant that could someday challenge Facebook and Google."

The takeaway: The sleeping ad giant may not be so sleepy anymore. Last year, eMarketer put out a projection that Amazon would book $1 billion in online ad revenue in 2017. In April, BMO Capital Markets issued a report saying that "We believe Amazon's ad business is gaining significant momentum [and] will reach $3.5B in revenue in 2017 (up 65%)." And this morning Sir Martin tossed out that $2.5 blllion number. Amazon, as always, is holding its cards tight, declining to break out its ad revenue. But regardless of whose guestimate you trust most, it's clear that Amazon is already a significantly bigger ad player than some other much noisier digital-advertising newbies -- like, say, Snapchat (which booked a disappointing $181.7 million in revenue in the second quarter).

With George Slefo.

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