News 2 minutes, 47 second read Mark Johnson, Editor, Just.Marketing
Sir Martin Sorrell has outlined a three-pronged strategy for digital-only S4Capital, the company he created after leaving WPP in 2018.
Speaking exclusively to Just.Marketing, the company’s executive chairman said, “It’s now about the holy trinity of: first-party data, digital content and programmatic. First-party data is driving content and programmatic. The net effect is that brands want to build direct consumer data access.”
S4 Capital acquired both digital content agency MediaMonks and programmatic media planning specialists MightyHive in 2018, the same year S4 Capital was launched. Since then, other developments have included a merger announced in November between India-based White Balance and MediaMonks at which time the firm unveiled ambitious plans to double its India business within six months.
Three growth areas
Sir Martin’s new venture has a digital-only strategy based on the three areas that were fastest growing at WPP.
He said, “In the first six months of this year in the US the ad industry was up about 6%. Traditional is down 3% and digital is up 20%, so we’re pushing at an open door. We’re building digital because that’s where the growth is – if you look at ad spend it’s dominated by Google at around US$125bn and probably going to around $150bn next year.”
He said the biggest concerns of clients today are speed, quality and value and that S4Capital is anxious to respond to all three.
“We are about being faster, better and cheaper. Faster is about speed and agility, better is about understanding the digital eco system. There are about 16 companies you have to understand, including Facebook, Instagram, Twitter, Alibaba, Ten Cent, Baidu and then the likes of Tik Tok,” he said.
‘No tent pole model’ today
Commenting on how the world of advertising and marketing has changed over the last 10 years, he said, “There is no tent pole model anymore, except for perhaps the big ads around the World Cup.”
He continued: “There are now two types of client: disrupted and disrupters and for the disrupted, speed and agility are key, as well as being more efficient, which is still very important.
“Clients are really focused on agility and the implications of digital marketing. Some people say you shouldn’t distinguish between digital and traditional marketing. I think that’s nonsense – digital is where the growth is and it’s where the technology is taking us. It may well be that marketing will be 100% digital one day. But if you merge the two, you become an apologist for analogue and you don’t go where the growth is.”
First-party data has become a key strategic priority for most brands, said Sir Martin, describing this as the reason why Nestlé paid Starbucks US$7.1bn (£5.2bn) in May 2018 to sell its coffee – “it’s about amassing consumer data,” he said.
He also believes that marketing integration is “key” for marketing success.
Describing his strategy for S4Capital, still a new company, he said, “It’s a new era, new age advertising services model and it’s about disintermediation of existing models”.
He dismissed the description of MediaMonks and MightyHive as “acquisitions”.
“We don’t acquire, we merge with businesses,” he said, adding, “we operate in a unitary fashion. We have pulled our business into one cohesive operation. [There will be] no more earn outs – we want people to buy in to our concept. We offer half shares and half cash. They must commit to building the company.”