Martin Sorrell: The Big Idea Isn’t Enough

If there’s one thing that gets Martin Sorrell’s goat, it’s the accusation that he doesn’t care about creativity.

“People say I’m a bean counter or an accountant, and I don’t mind that, they’re just having a dig,” said Sorrell, executive chairman of S4 Capital, the digital-focused holding company upstart he founded on his exit from WPP in 2018.

“The thing I find irritating are the rose-tinted spectacles, looking back to the bygone era when winning was about the power of personality and a presentation at 9 a.m. after a hard night out of six martinis and god knows what else – and no, no it’s not, that’s changed,” he said. “The big idea is still very important, of course, but it’s about how you deploy it.”

Increasingly, data and technology are what win clients, Sorrell said.

Last week, putting that philosophy into practice, S4 announced its intention to acquire Circus Marketing, a Mexico-City based data-driven digital content agency, and to merge it with MediaMonks, S4’s content division.

“There’s an unwillingness among people in this industry to accept the importance of technology and the implications of that importance,” Sorrell said. “I’m 74, about to be 75; I should be the last person on Earth to understand that … but here I am.”

AdExchanger caught up with Sorrell to talk data-driven creative, the big opportunity in Latin America and what S4 is looking to acquire next.

AdExchanger: You said Circus shares S4’s vision of “focusing on purely digital content, unencumbered by analog baggage.” What do you mean?

MARTIN SORRELL: I know some people say you shouldn’t distinguish between digital and analog, but I think that’s a fundamental miscalculation. The holding companies are either flat like WWP, negative like Publicis or only growing at 2% or 3%. I know what they have in their portfolios. I was involved, too. They have an analog business which has not become irrelevant, but it’s becoming increasingly less relevant.

When you start with a clean sheet of paper, you have the advantage of being able to focus where you see growth.

What happens down the line?

Today’s digital is tomorrow’s analog. But if you’re small and agile, you’re like a torpedo, you have the ability to focus. And if you’re an airline carrier or an oil tanker … you don’t. That’s not Mark Read’s fault or Arthur Sadoun’s fault, it’s just a fact of history.

Why did Circus Marketing appeal as an addition to the S4 portfolio, and how do you define data-driven creative?

The people at Circus, Firewood, MediaMonks, MightyHive – they all understand that data and technology can improve creativity, make it more effective and, indeed, more efficient. That doesn’t eliminate the romanticism of creativity, it enhances it, makes it that much more targetable and measurable.

I remember when we first bought Millward Brown at WPP. The creative departments hated the idea of copy testing, and I understand the irritation. Why should some numerical technique be taken more seriously than my creative idea?

But this is slightly different. We’re talking about finding out what the consumer wants using emotional or emotive data, data which enables us to understand why consumers like a brand and how they consume media, products and services.

Would you call this a natural evolution of the status quo?

I think it’s more of a revolution than an evolution. AR, VR, AI, voice, audio – all of these things are shifting the needle very rapidly, and it makes the traditional portfolio look more and more ancient and dilapidated.

S4 has acquired 11 companies in just over a year. Will you keep up that cadence into 2020, and what types of assets are you looking for next?

We had nothing 16 months ago: 50 million pounds, 40 million of which I put in, and we raised a total of 350 million pounds. Our market cap is now 900 million pounds or $1.2 billion.

We’ve made a fast start, and everything we’ve done, from MediaMonks through to Circus, is about asking people to buy into our philosophy. Each of the 11 deals we’ve done has been centered on first-party data, content and programmatic. Right now, about 70% of our operation is content, which is built around MediaMonks, and 30% is programmatic, built around MightyHive, which includes the first-party data and analytics business.

We’ll make another move on the media side very shortly. We’re already in discussions on that, and it’s exclusive. Once that’s done we’ll have a more even-steven balance between content and media and programmatic.

How strategic are Latam and Spanish and Portuguese-speaking markets to S4’s growth strategy?

Geographically, we’re about 70% Americas – North and South – 20% Latin America and 10% Asia, which is growing like a weed. We’re pleased with what we have, but we want more of a balance going forward: 40% Americas, 40% Asia Pacific and 20% Western Europe, including Africa and the Middle East.

As far as Latin America is concerned, I’m extremely bullish and always have been. For one, the creative abilities and technology talent in Latin America, especially in countries such as Argentina, Brazil and Mexico, are outstanding. There’s also been a bit more inflation in Latin America and so there’s more room for our clients on pricing.

Yes, the situation can be volatile there, but the energy is great and the potential is huge.

This interview has been edited and condensed.

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