Ad Tech Briefing: Lines are being drawn in Amazon and Google’s evolving rivalry 

It might seem intuitive that Big Tech (as a collective) will be the big beneficiaries of such trends, but as the recent raft of quarterly earnings releases demonstrates, such players are repositioning, and the impact on Madison Avenue could potentially be seismic. 

Google-owner Alphabet was the first across the line, and in last week’s analysis, Digiday noted how ad tech is a declining priority for the Big Tech giant of Madison Avenue, with AI dominating Wall Street analysts’ questions (see right). As the remainder of ‘GAFAM’ – that’s Apple, Facebook (or Meta), Amazon, and Microsoft – followed suit with their results for the period, the AI-intrigue continued.

The duopoly is solid (for now)

However, for those paying close attention to how their priorities will impact the marketing and advertising market, there were some breadcrumbs pointing toward potential political ruptures, given how such players account for almost two-thirds of U.S. ad spend. 

Firstly, it’s worth clarifying how Google is far from a shrinking willow in the advertising market, given its $96.4 billion Q2 revenue haul – it’s still the clear pace-setter on Madison Avenue. And while its Google Network business, a.k.a. what was DoubleClick, is in continued decline, core platforms like Search and YouTube grew 12 percent and 13 percent, respectively, with analysts noting how it has shifted from an enabler of the ecosystem to a premium media owner, with its AI overviews also setting a new paradigm.  

Meanwhile, Meta CEO Mark Zuckerberg used this juncture to launch his “Personal Superintelligence” manifesto – for shareholders’ sake, let’s hope this one receives a warmer welcome than his metaverse prophecy. However, glib observations aside, Meta’s 3.4 billion-strong audience helped generate $47.5 billion during the same reporting period, up 22 percent year over year — a strong performance, indeed — with the Facebook and Instagram owner also underscoring its AI efforts.    

Amazon’s challenge to Madison Avenue’s throne 

Ahead of any further analysis, it is worth reminding ourselves that Alphabet’s latest earnings suggest a strategic shift away from third-party ad tech dominance toward owned-and-operated platforms (not to mention AI), and it’s this shift in priorities that may focus Amazon Advertising’s energies in the near-to-mid-term. 

In its Q2 earnings update, Amazon reported $167.7 billion in revenue, a 12 percent increase from the year-ago period, according to the company’s latest earnings disclosure. According to the company’s executives, advertising played a key role in driving growth, a contrast to what several analysts deemed a worrying outlook for its AI investments. 

Understandably, Wall Street queries focused on hot-button issues, such as whether tariffs will impact Amazon’s core e-commerce business and its prospects in the ongoing AI land grab, with such developments casting an interesting light on its growing ads business.  

On the company’s subsequent earnings call, which took place ahead of the crunch tariff deadline from the U.S. administration, Amazon’s executives emphasized the unpredictability of the situation, with CEO Andy Jassy observing, “In the first half, we just haven’t seen diminished demand.”   

Given the broader AI narrative, many analysts’ questions centered on its AWS vertical, which generated $30.9 billion in revenue, a 17.5 percent year-over-year increase. Notably, Morgan Stanley’s Brian Novak bluntly articulated the perception that “AWS is falling behind with Gen AI.” Evidently, Jassy’s response did little to reverse such notions, with Amazon’s stock price dropping by 7 percent in the hours after the call. 

Meanwhile, the online giant’s advertising business had a significant impact on its bottom line, contributing $15.7 billion, a 22 percent year-over-year increase, or (more pertinently to the matter at hand) accounting for 9.4 percent of Amazon’s total revenue for the period. 

As Amazon CFO, Brian Lioswski, noted, “Advertising remains an important contributor to profitability in the North American [and] international segments.” Note how this contrasts with the way AWS margins “saw headwinds” during the reporting period, and as Lioswski also noted, “We expect AWS margins to fluctuate over time.”      

A brewing storm? 

Amazon executives also highlighted some of its tentpole Cannes Lions announcements, such as its integration with Roku. All of this is understandable, particularly as analysts take an increasingly austere view of AWS’ outlook; after all, the high margins of digital advertising have created some of the biggest Big Tech behemoths.  

And that’s why the recent emergence that Amazon has abruptly cut its Google Shopping ad spending is causing speculation: could this be the start of a tit-for-tat trade war (of sorts) between a Big tech pairing who also happen to be two of Madison Avenue’s biggest spenders? 

One of the biggest stories on Madison Avenue over the past 12 months has been Amazon, specifically as an advertiser, awarding separate parts of its media account to different holding companies worldwide. It’s well understood that the unspoken horse-trading of winning such large accounts – separate estimates put Big Tech’s marketing spend in the range of $20 billion or more per year – involves a degree of deal-making. 

In the case of Amazon, several Digiday sources have speculated that awarding such a lucrative account would have involved an implied, if not outright stated, expectation that a certain percentage of spend will be channeled in the direction of its accompanying media business. If this is the case, will Google look to retaliate? 

Furthermore, more puckish observers might note that Google’s account review, which took place in 2021, saw it consolidate its media business within WPP’s Essence – the same business unit that won Amazon’s media business in Europe and APAC.

Are these shifting tectonic plates signs of a brewing storm between the two that could have a scaled downstream impact? 

What we’ve heard

“Payor reliability is slipping — only 43 percent paid on time more often than not, with ‘always-on-time’ payors down to just 13 percent.”

— OAREX evp Nick Carrabbia cites statistics from the company’s H1 2025 Payments Study. 

Numbers to know

• $94 billion: Apple’s quarterly revenue, up 10 percent annually, its Services division (including advertising) generated $27.4 billion. 
• 21 percent: The latest quarterly revenue increase for Microsoft’s Search and News advertising division.  
• $500 million: Q2 revenue for Reddit was up 78 percent year on year. 
• $483 million: Criteo’s Q2 revenue, representing a 2 precent annual increase in revenue. 

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