Sir Martin Sorrell is founder and Executive Chairman of the London-based listed company S4 Capital plc, which is building a global digital advertising and marketing services business. He had been founder and CEO of WPP for 33 years, building it from a £1m “shell” company in 1985 into the world’s largest advertising and marketing services group. When he left in April 2018, WPP had a market cap of more than £16bn (it’s £13bn now). Prior to that, he had been CFO of Saatchi & Saatchi plc for nine years. S4 merged with MediaMonks, its “content practice”, in July 2018 and with MightyHive, its “data and digital media practice”, in December 2018. This year, it combined the two practices under the Media.Monks brand. Having added eight companies in 2019 and six in 2020, it has made 11 in acquisitions so far in 2021. Just three years after its formation, S4 Capital has almost 6,000 people in 33 countries, with a market cap of some £3.5bn. Investors are forecasting the company will have 2021 revenue of £553.6m, EBITDA of £103.2m, and EPS growth of 54%.
What is the significance to media companies of the rapid growth of S4 Capital/ MediaMonks?
You say “media companies”. If that’s the target market you’re talking about, we signify the growing importance of digital media (55-60% of the market, incremental $100bn of digital spend this year). That’s where the growth is. It also signifies the importance of transparency and the faster (agility), better (knowledge of their digital ecosystem), cheaper (efficiency) model, along with our unitary (one p&l) structure.
Advertising as a proportion of GDP slipped from 2% to 1% over the last 5-10 years. It’s forecast to rise to 1.75% over the next five years or so. The motive forces behind these moves have been the pressure on traditional media, which will continue, and the continued rise of digital media. Consumer consumption of media has changed fundamentally.
What’s so special and distinctive about your company?
Our mission to create the new era advertising and marketing services model and disrupt the old. Four founding principles – focussed totally on growth and, therefore, digital; the “holy trinity model” uses data to drive the creation, production and distribution of advertising content in an iterative way; faster, better, cheaper or speed, quality, value is our go-to-market mantra; and all through a unitary structure.
What’s your ultimate vision of S4 Capital, say, in 10 years?
I can’t really think 10 years ahead. The mission is to create the new model. The headline 10 years (or mostly sooner) is adoption at scale of the new model. We have 6 “whoppers” (clients generating $20m of gross annual revenues). We’re targeting 19 more, who we already work for. The measure of success is whether we achieve conversion at scale and become the ‘agency of the decade’.
What’s the single biggest lesson you learned in 32 years managing WPP?
The centrality of strategy and structure – the need for a clear vision and mission and the right structure to implement it. Aligning all the stakeholders is not easy.
What has been the proudest achievement in your corporate career?
Building two businesses from nothing (WPP & S4) and helping to build a third (Saatchi).
Which company (other than your own) do you most admire?
Very difficult to single out one – has to be from MAGAT: Microsoft, Apple, Google, Amazon or Tesla
How different will the media industry look in, say, five years?
Digital will be well over 70% of the market and the FAANGs will still be dominant, but there will be significant and growing competition from the Metaverse, Web 3.0, AI, AR, VR and voice.
How will the world economy and the media industry fare in 2022?
Very well. GDP growth will be 4-5%. But just watch out for 2023, when GDP growth reverts to 2-3%, as pre-Covid. But we will still have the digital marketing transformation tailwind behind our backs.
What’s top of your agenda for 2022?
Growing conversion at scale. We have 6 “whoppers’. Our target is 20. We’ve identified another 19 potentials over the next three years. So building our client base among the “whoppers”, “whoppertunities” and local heroes is the priority.