In India recently for the launch of media consultancy MightyHive’s new office in Mumbai, Sir Martin Sorrell, who had earlier launched S4 Capital in May 2018, a digital advertising and marketing services company, said his company was “interested in personalisation of advertising and marketing at scale”. In 2018, MightyHive, a US-based new-age media consultancy that works closely with global brands and agencies,had merged with S4 Capital Plc.
The former head and founder of WPP, the advertising group he had led for 30 years before being ousted early last year in the wake of accusations of misconduct, Sorrell was speaking at the event in Mumbai where he also announced the acquisition of Delhi-based content creation and production company WhiteBalance by S4’s global content practice MediaMonks.
Referring to S4 Capital’s key focus areas, Sorrell said, “We are currently focusing on two things, firstly on developing a new era, new-age model and secondly, on disrupting the traditional business approach model.”
Talking about the underlying principles guiding the group, Sorrell said his company had four core principles. “One is purely Digital. We’re not interested in any traditional activity. India is an interesting market because here Digital accounts for 20% of the market whereas globally it’s around 40%. However, while Digital is growing at around 30-35%, traditional is growing at high single digits and the overall industry is growing at about 10-12%.”
While the growth in the traditional sector may not be as rapid as it has been in the past,“it’s still very strong in a worldwide context”, Sorrell added.
“Our second principle is this model that we have of first-party data driving the development of digital content and programmatic. We’re interested in personalisation of advertising and marketing at scale. That’s on the content and programmatic side,” Sorrell elaborated.
Laying out the contours of the “third fundamental principle”, Sorrell said it was based on a tagline called, ‘Faster, Better, Cheaper’, “which sounds a bit simplistic but it really has traction with clients. To my mind, those are the things the clients are really focussed on.”
Explaining the concept, he said, “‘Faster’ is about agility. Old legacy companies are looking for their organisations to become more agile. ‘Better’ is about understanding the digital ecosystem. There are around 14-16 companies like Google, Facebook Amazon, Tencent, Apple, and Microsoft that we’re focused on and we have to agnostically evaluate those companies for our clients because that’s how they distribute their digital. So understanding those companies is about ‘better’. And then the final area is ‘cheaper’ and becoming more cost efficient.”
Interestingly, the fourth principle, Sorrell said,was about “a unitary structure instead of a fragmented one”.
In the context of the pressures on the agency business and the disruptions that were redrawing the market,Sorrell referredto the need for transparency in business that he believed could help moderate the penalties that clients were imposing on agencies for failing to “fulfill their promises”.
S4 Market Capitalisation
Talking about his company,Sorrellsaid S4 Capital had had a good run in the 10 months since inception. “We are now up to a market capitalisation of $1.1 billion. We have 2000 people in 26 countries. So we’ve had a good start in just a little over a year. I’m very pleased with the progress but there’s a lot more work to do,” he said.
S4 Capital has bagged several blue-chip clients, including Apple, Google, HP, P&G, Coca-Cola, Adidas, Johnson & Johnson, Sony Pictures, Netflix, Starbucks, and Nestle among others.By next year, S4 Capital revenues are expected to be aroundthe $350-million mark.
Sorrell said that among the most important companies in the world were Google, Facebook, Amazon, Tencent, Alibaba, Apple, Microsoft, Oracle, Salesforce, IBM, Twitter, and Bytedance to name a few. “TikTok is beginning to make significant inroads with advertising revenues.”
Referring to Google, Facebook, Amazon, Tencent, Alibaba, Apple, and Microsoft as ‘Seven Sisters’, he said the last time a group of companies was called ‘seven sisters’ was a bunch of global oil giants.