Sir Martin Sorrell is the type of founder that the people of Silicon Valley reward the most. It has enjoyed great success, having built the world’s largest ad conglomerate in 32 years, WPP. He also seeks revenge. Shortly after WPP the board began reversing a “misconduct charge” in the spring of last year [luego le pidió que reembolsara $ 200,000 en gastos personales]. Sorrell left the company in anger.
Six weeks later, he formed a new company, S4 Capital, using a playbook that he knows works.. He and a partner launched London-based WPP by buying a controlling stake in a publicly traded company that made wire baskets and kettles, and then used it to launch a global buying spree. Similarly, S4 grew out of a reverse merger with Derriston Capital, a small shell company that went public on the London Stock Exchange in 2016 and changed its name to S4. Then it started to increase.
Already S4 – that Sorrell was funded with £ 40 million and has raised tens of millions more from other institutions for acquisitions – has successfully pursued nine companies, although Sorrell emphasizes that these are mergers. “All half cash and half stock.” There are also no long locks, says Sorrell, who was bouncing around the United States this week before heading to the Web Summit event in Lisbon.
“If you want to sell your company, if you want to make a quick kill and get out, we’re not interested. If you want to subscribe to our vision” and help make S4 a powerhouse in its own right, that’s a different story, he suggests.
Silicon Valley is apparently a big part of the picture. Last month, S4 Capital finalized a $ 150 million deal to merge with the region’s largest digital agency, nine-year-old Firewood, with S4 paying $ 112 million upfront in stock and cash, and the balance will come if Firewood you reach your goals for the year.
Also late last year it merged with San Francisco-based digital media and programmatic consultancy MightyHive in a deal valued at $ 150 million.
If you stick to WPP on occasion, that’s probably fine too. S4 Capital’s first acquisition, for example, from Dutch digital production agency MediaMonks, was at the expense of WPP, which had also been trying to buy the company. The WSJ reported at the time that S4 agreed to pay approximately $ 350 million for the agency.
The general idea, Sorrell says, is to focus S4 entirely on digital advertising and on media and marketing services specifically, where in 2019 for the first time, the world’s advertisers will spend more than half of their advertising budgets. “The digital media industry is up 6 percent [para el año] and it has come down for traditional media, so we are going where the growth is and we are pushing an open door, free of obstacles from legacy or analog businesses. “
When asked if he doesn’t have an ax to grind when it comes to WWP, which is immersed in both the digital and traditional ad world, Sorrell doesn’t hesitate. “I want to see this approach succeed. And if that’s an ax, that’s right. “
Much of that focus is on partnering, rather than trying to compete, with the ad tech giants, including Facebook and Google, precarious as that deal may be.
Other current technology clients include Apple, Salesforce, Microsoft, LinkedIn, Uber and ServiceNow, which Sorrell says treat S4’s strategic and creative marketers as extensions of their internal marketing teams.
Firewood, for example, will integrate teams within companies like Google to “understand the customer as well as possible,” Sorrell says. As he explains it, “We do not compete with [estas empresas]. We serve them; We work with them. If we are being rude about it, we are resellers for each of them. They don’t want to get into the service business. “
They also want to keep control over what they know about our tastes and interests and other data in which they have a growing blockage, but they asked if you think that some of these technology clients should separate, and you insist that you do not, “as always that be transparent and really exercise the power you have responsibly. “
Asked how S4 surpasses the growing number of people who no If companies think they are acting responsibly with their private information and might increasingly choose not to share it, Sorrell dismisses the idea that people are deeply concerned about targeted advertising. “My opinion is that as long as the consumer knows what they are getting into, that’s fine. If I know how my data will be used, in simple language, [no voy a optar por no participar]. I think we will have differentiated models, such as’ I want to control my data so [usted’] He is going to pay it to me in some fractional way. “The problem is caused by people who do not know what is being done with their data.”
And even that problem is overshadowed by what Sorrell sees as the real reason for the handshake, which is the size of these companies. “When Apple was the first to become a trillion dollar company, the [ex CEO de Goldman Sachs, Lloyd Blankfein] which would be the first $ 2 trillion company, and he said there won’t be one because no nation-state would allow a company to reach $ 2 trillion. You also see this in China, ”he says. “I have heard concerns expressed about the size of Alibaba. It is not just a Western phenomenon.”
And about the political announcements leading up to the US presidential election, we asked Sorrell. Twitter has taken a position; Google is considering changes to its own advertising policy. Should these platforms run them, regardless of their content?
That one, he says, is “very difficult. My opinion has always been that these are media companies that are responsible for the content that flows through their channels. I think they are recognizing it; Facebook has thousands of people monitoring content.
But should we take political advertising or not? Well in the UK you to have To be honest If the ads are not true, we have problems. I think Zuckerberg argued that his people know what is fact or not, but to judge what is true or not is quite difficult, “he acknowledges.
Before long, our time was up, but before he is gone, we speak to Sorrell’s traditional giants, like the one he built himself for three decades before abruptly abandoning it last year. Maybe not surprising, given his new endeavor, but he says those The companies, with their tangle of properties, most of which are run as independent fiefdoms, should definitely be dismantled. “I don’t think they have a chance to succeed with the legacy assets that they have.”
Sorrell recalls a “brat comment” made by one of the established players, regarding his new company: “Someone called us a spec in the mirror.” Sorrell continues, “When you’re in a car accident, that spec in the mirror catches up with you very quickly.”