WPP's Amazon win: What it means for the Indian market

WPP scored a major win last week, securing Amazon as a new client. On September 4, Amazon transitioned its global media account after a competitive review from IPG to Omnicom Media Group (OMG) and WPP. 

WPP India is expected to play a significant role in managing Amazon’s media strategy, as the country remains one of Amazon’s key growth markets.

WPP to handle Amazon's media in EMEA and APAC

While OMG will handle the account in the Americas, WPP will manage it across the EMEA and APAC regions. Amazon views this decision as a strategic move to leverage the strengths of both agencies. The account's total value is around $5 billion, though the exact share of the Indian market remains unconfirmed. However, neither agency has made an official announcement yet.

India's key role in Amazon’s global strategy and growing media spend

India's role in Amazon’s global strategy and growing media spend

India plays a pivotal role in Amazon's global strategy, driving the e-commerce giant's growth in critical verticals like e-commerce and Prime Video. WPP, which has long been a market leader in India’s advertising landscape, will manage Amazon’s media operations in the country.  With a vast network and deep integration into the local market, WPP is uniquely positioned to handle Amazon’s complex advertising needs across the region.  

The bulk of Amazon's advertising spend is funnelled into its e-commerce business, including key verticals like Amazon Fresh and Prime Video. 

As previously reported by e4m, Amazon's Indian subsidiaries collectively spent Rs 5,957.9 crore on advertising in FY22, marking a 25% increase from the Rs4,768 crore spent in FY21. The spending was distributed among Amazon Seller Services, Amazon Internet Services, Amazon Wholesale India, and Amazon Pay India.

Amazon Seller Services’s advertising expenses decreased to Rs3,209 crore in FY23 as compared to Rs 3426.4 crore in FY22. In FY21, the company spent Rs2,728.4 crore on advertising. This is also the firm that spent the highest among the other subsidiaries.

Amazon Pay India, which handles the online payments business, spent Rs2,380.9 crore on advertising, up 21% from Rs1,967.2 crore in FY21, while Amazon Wholesale India, the wholesale arm, saw a significant rise in advertising expenses, reaching Rs 95.2 crore, a 144% increase from Rs39 crore. Amazon Internet Services, responsible for Amazon Web Services (AWS) in India, spent Rs55.4 crore on advertising in FY22, a 66% increase from Rs33.4 crore in FY21.

WPP's strength in India and APAC

This win not only demonstrates WPP’s strength in APAC but also highlights its expertise in India, a country that is increasingly critical to Amazon’s global ambitions.

WPP’s financial performance reflects its strong foothold in India. As per the agency’s H1 2024 financials, while the ‘rest of the world’ segment saw a 2.2% decline in Q2, India posted robust growth of over 9%.
The growth though was outweighed by a decline of 24.2% in China on client assignment losses and persistent macroeconomic pressures, it is important to note that India still showed positive growth, standing out compared to other markets.

With Amazon awarding its media account for the EMEA and APAC regions to WPP, the Indian market is expected to see further growth.

The report also mentioned how GroupM, WPP's media planning and buying arm, continues to hold the top position in key markets like India, China, Japan, Germany, and the UK, maintaining its status as the world’s largest media agency network.

WPP’s other key clients in India span a wide range including the likes of Unilever, for which it handles significant media planning and advertising, as well as P&G, Nestlé, and ITC. 
WPP also works closely with Google and Amazon, managing their advertising and digital marketing efforts in the region.

The importance of local expertise

As for Omnicom, a media planner familiar with the account commented, "In the short term, there might not be much action in India. However, in the long term, strategies and learnings from India could be exported to markets like Latin America, which share some cultural similarities with India.”

While global media pitches are typically managed at a high level, they do have a ripple effect on individual markets like India. Local performance and the value an agency can deliver remain critical factors in determining success. 

As per media planners, global brands tend to favour agencies deeply rooted in key markets. 

“For instance, WPP’s stronghold in Asia, especially in India, coupled with its established presence in Europe, gives it a competitive advantage over other agencies,” another planner said.
Amazon spokesperson Margaret Callahan as reported by the international media said, "After an extensive evaluation of our consumer business's advertising needs, we've decided to partner with OMG and WPP.”

"This choice followed a meticulous review process," Callahan told Adweek. "We assessed each agency’s expertise in the marketplace, media planning capabilities, media pricing, measurement skills, and account management across all regions."