Sir Martin On Tech-Driven Growth And The Quest For 'Whoppers'
CANNES -- He may have previously run the world's largest advertising agency holding group, but Sir Martin Sorrell is pretty happy in his current seat.
The former WPP CEO is now executive chairman of his own S4 Capital, the group building a digital marketing services company through its main Media.Monks division.
In this video interview with Beet.TV editorial advisor Jon Watts at Cannes Lions, Sorrell says technology is fuelling his company to grow faster than traditional groups and driving national economic growth.
Understanding S4
Sir Martin outlined S4 Capital's four "pillars":
Digital-only.
Data-driven.
"Faster, better, cheaper" - agility, digital nous and efficiency.
Unitary structure, operating everything through Media.Monks.
Now with 9,000 staff in 32 countries, the company's "Holy Trinity" is:
First-party data.
Digital content.
Programmatic services.
Sorrell revealed the company's 10 biggest clients:
Google.
A large telecoms company.
Meta.
BMW Mini.
Mondelez.
HP.
An FMCG
A financial services company.
Amazon.
T-Mobile.
PayPal.
Hunting whoppers
S4 was effectively launched in 2018, the same year Sorrell left WPP, when he acquired a shell company. It has grown fast.
"We call them 'whoppers' - we've now got eight clients at over $20 million of revenue," he says. But Sorrell is targeting a milestone he calls "20 squared" - 20 such $20 million whoppers on his client list.
"Last year, we did about $900 million of revenue," Sorrell continues. "This year, we're forecast by analysts to be (at) about $1.2, $1.3 billion - so, 25% organic growth rate; we did 34% in the first quarter."
Digital speed
Sorrell's previous company, WPP, could only hope for that kind of growth.
In its Q1 2022 trading update, his successor Mike Read said: "We now expect our growth to be in the range of 5.5% to 6.5%." Sorrell says he knows the reason for the disparity.
"The holding companies say they're going to grow 5% to 6% this year - we're saying 25%, but we're in the digital space," he says.
"They're sort of constrained by the analogue space ... the albatross around their neck is analogue."
Tech-driven growth
It isn't just that digital channels continue showing faster growth than analogue forebears. As he explained on a Beet.TV panel discussion, Sir Martin thinks technology companies will become richer still thanks to the Ukraine war.
"When the Germans spend four percentage GDP on defence, they're going to be investing a lot in technology," he claims.
"I think governments are starting to realise that, to be successful as a nation from an economic point of view and security point of view, a strong tech ecosystem is really important."
You are watching 'The Mediaocean Retreat', a Beet.TV Leadership Summit at Cannes Lions 2022.
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