Advertisers are declining to join the backlash against Facebook, according to Sir Martin Sorrell, despite a year of scandal at the social networking giant.

Facebook still enjoys a near-duopoly over digital advertising alongside Google, even though investors have wiped nearly a third off the company’s value this year. The firm has faced criticism over the distribution of fake news on its platform and the revelation that the personal Facebook data of 50 million people was improperly obtained by Cambridge Analytica, a political consultancy that went on to work for Donald Trump.

Sorrell, who is attempting to relaunch his advertising career as a digital guru following his acrimonious departure this year from WPP, told the Guardian that Facebook’s Instagram unit was providing a commercial counterweight to the company’s main network.

“Facebook includes Instagram,” said Sorrell, who has re-emerged as a digital specialist under his new advertising venture S4 Capital. “From what I’ve seen there might be some nervousness around Facebook. But there has been an increased focus on Instagram. Whatever Facebook is losing around the Facebook swing it is probably gaining on the Instagram roundabout.”

Despite its tumultuous year, the Facebook group’s total global ad revenues will grow by 36% this year, to $54bn (£43bn), as its power as an advertising medium seems unaffected by its tarnished corporate reputation.

Facebook acquired Instagram for $1bn in 2012 and the site is rapidly becoming the engine for future growth. It is successfully keeping hold of younger audiences – and the advertisers desperate to target them – that are switched off by the ageing Facebook service. Instagram’s ad revenues grew at 110% this year, to $9bn, according to research company eMarketer. By 2020, it will still be growing at an annual rate of 44%, more than double the rate of Facebook, with ad revenues forecast at $21bn.

“I am very focused on the 20% of the $1tn advertising and marketing services industry that is growing the fastest, and that is the digital piece,” said Sorrell, who has bought two digital advertising businesses this year with his S4 Capital vehicle. “The digital piece is forecast to grow at 55% in the next couple of years. With the traditional media part of the business even linear TV [advertising] seems to be coming under pressure.”

Sorrell, a renowned workaholic when he was at WPP, spent an extended Christmas break with his family in Latin America, having attended the lavish wedding of the daughter of India’s richest man, Mukesh Ambani.

“We don’t know how to spell holiday,” he said. “If you asked my family, I think they would say my schedule hasn’t changed. I’ve already fixed my Cannes [advertising festival] debate interviewee, I’ll be at Davos, the Consumer Electronics Show, the motor show in Detroit.”

Sorrell made an abrupt and headline-grabbing departure in April from WPP, the advertising giant he founded more than three decades ago, in a scandal involving allegations of personal misconduct.

In June, Sorrell “strenuously” denied paying for a sex worker using funds from WPP, the company he founded and developed into the world’s largest advertising group. WPP, which has been accused of being too cumbersome for the digital age, lost the number one spot in October to US rival Omnicom.

Sorrell, who was always something of a digital evangelist at WPP, said he had become even more strident in his views about digital.

“S4 was born and bred in digital,” he says. “There has been no contamination, if that is the right way of looking at it, from traditional media.”

S4 is attempting to strike the balance between global scale and fulfilling Sorrell’s mantra of “faster, better, more efficient”. The two businesses Sorrell has bought so far employ 1,200 people, WPP has more than 130,000 staff.

“In the first four or five months at Saatchi & Saatchi [where he worked as the agency’s first finance chief] or WPP I couldn’t have given you an answer. Neither could Maurice or Charles [Saatchi],” he says. “To some extent you are driven by circumstances or serendipity, structural changes in the traditional ad business that gives you significant opportunity. It’s the old cannibalisation argument: if you don’t eat your children, someone else will.”

WPP faces ‘headwinds’

Next year is set to be the most critical in WPP’s history since it almost went out of business three decades ago trying to become the global behemoth it is today. With WPP’s share price down 37%, investors are far from confident in the business’s prospects. While the rate of disintegration of the WPP business has accelerated this year – from client losses to plunging share price – the rot had begun to set in under Sorrell with 2017 the company’s worst performance in almost a decade.

Mark Read, WPP’s new chief executive, has embarked on a slimline strategy designed to make the company fit for an increasingly digital future, including co-locating or shutting almost 200 offices, cutting 3,500 jobs and merging some of its most venerable ad businesses. WPP, which owns the Grey and Ogilvy & Mather agencies, is merging its J Walter Thompson and Wunderman units.

However, having lost a string of major clients including a sizeable chunk of Ford, American Express, United Airlines, Pepsi, Bayer, Opel, GlaxoSmithKline and part of Daimler, Read has admitted WPP faces a “headwind” of several hundred million dollars to make up before 2019 effectively can be considered to have “started”.

Of most concern will be the deteriorating situation in the US, the world’s biggest advertising market by some distance, where WPP’s revenues fell 5.3% in the third quarter. North American revenues, which account for 36% of the group’s total revenues, were down 2.9% in the first half of the year.

Read’s revival strategy is founded on a belief that the ad industry is undergoing structural change, which WPP can cope with, and not wholesale structural decline, which would signal potentially the end of the global holding company model. He has promised a a “radical evolution”that he says will have returned it to the growth levels of peers such as Omnicom, IPG, Dentsu Aegis, Publicis and Havas by the end of 2021. Investors will hopefully be patient as he strives to prove his plan is right.