Is there a chance Snapchat is becoming a bigger threat to Facebook? Martin Sorrell, the chief executive of WPP, the world’s largest advertising firm, thinks it may be.
Sorrell first told CNBC Tuesday that the firm’s clients spent a whopping $90 million on advertising on Snapchat last year—about $60 million more than what WPP predicted would be spent on the app at the beginning of the year. That amount means Snapchat’s 2016 revenues are likely to be higher than what the market currently predicts, CNBC reports, considering WPP clients spent $90 million of the original $350 million that was expected.
“It does become a threatening alternative to Facebook and I think that’s the big opportunity for them. We know Facebook have tried to buy Snapchat a couple of times, we know that they’ve made product changes as a result of Snapchat’s products,” Sorrell told CNBC.
He continued: “I think Facebook is concerned about the potential opposition.”
The recent controversy surrounding “fake news” and how it impacted the 2016 presidential election also gives Snapchat a leg up, Sorrell told CNBC:
“I think with the measurement issues, with the fake news issues, and the fraud issues that the internet faces, clients want to try and experiment,” he said.
That aside, Snapchat is also gearing up for an IPO that could reportedly value the company at $25 billion, and ad spend on the app could reach nearly $1 billion ($935.46 million) in 2017, CNBC reports—giving it a chance to raise the stakes among more established companies like Facebook (FB) and Google (GOOGL). However, when compared to the amount that clients spent on advertising on those companies, Snapchat still has a long way to go: In 2016, clients spent $5 billion and $1.7 billion on Google and Facebook, respectively.
