Martin Sorrell ready to bounce back

Advertising. It’s only weeks since the resignation of Sir Martin Sorrell  from WPP, the world’s largest marketing services company he created 33 years ago. Sorrell is investing £40m of his own cash in the reverse takeover of a UK quoted shell company called Derriston, which he promises to turn into “a new multinational communications services business”. The stunning comeback is said to be supported by Schroders, Toscafund, Lombard Odier, Milton and RIT Capital Partners, which are believed to have committed an initial £150m for acquisitions. The company is being renamed S4 Capital but there are few clues about its strategy beyond the assertion that “There are significant opportunities for development in technology, data and content.” WPP’s longterm success was based on offering a wide range of high-quality but separate marketing services under the one roof. But that approach has increasingly been under attack from new-wave startups, large consultancy firms like Accenture, and cost-conscious clients who want to be much more involved in marketing. The digital disruption of traditional media has complicated everything for the advertisers who have been funding it. The UK advertising news brand Campaign took a neat swipe at this week’s news: “Whatever one might say (and people have) about his legacy, he is an astute businessman – arguably the most accomplished of his generation (there is a delicious irony for those who tried to leave WPP during Sorrell’s reign that he himself left without a non-compete agreement in place). All of which suggests it’d be foolish to bet against him. Whether he is capable of reinvention is another matter.” We can safely assume two things about S4: its first M&A will come quickly; and the company will be anything but a re-creation of WPP, perhaps more of a consultancy. Might Sorrell even be exploring some kind of virtual group of collaborating businesses, a federal structure with which to attack companies like – WPP? The man who transformed the global advertising business has never believed in standing still. Just wait.