Martin Sorrell’s new advertising business, S4 Capital, will essentially be a ‘new era, new age’ company with significant focus on countries such as India where he sees immense potential.
“Half of the advertising business is traditional stuff and half is new stuff. It will be focused on platforms that are much flexible and faster,” said Sorrell at a press conference at Cannes Lions 2018.
Sorrell, 73, did not have a non-compete clause in his WPP contract and has already started his venture.
Not revealing much about his future plans, Sorrell said, “In the next 5-7 years, S4 will try and deal at the very highest levels of the companies it works with and, at the same time, be able to tacitly implement in a totally different way: More agile, more responsive, less bureaucratic, more creative.”
Just six weeks later after leaving WPP, Sorrell has established a new company S4 Capital with a private equity of 51 million pounds. When asked about how different would his new agency be from the rest in the industry, Sorrell said, “I listen to what the CMOs are saying. They are demanding more flexible, faster, cheaper, global and can work with the local agencies with a millennial influential. Who knows about my plans, but that is where everything is going. Most of the agencies don’t fit these points and this is the new era.”
Sorrell aims S4 Capital to resemble the likes of Accentures because all six holding companies are moving in the exact same direction. “The Accentures don’t compete for $5 million projects, they compete for change projects as high as $200 mn,” he said.
Emphasising on the rise of the consulting companies getting into the advertising space, Sorrell said, “If you even add the market cap of all the holding companies together, Accenture is one-and-a-half times bigger than the six put together.”
Brands are demanding more integration of services offered by the holding companies and the big six will have to modify their offerings tailor-made for the brands, said Sorrell on the existence and future of holding companies. “Brands need the best and not the six,” he said.
Sorrell mentioned that a few weeks ago, Proctor and Gamble’s North American business has said that they would like Publicis, WPP and Omnicom to form an integrated agency; one in Publicis’ New York premises and one in WPP’s Cincinnati premises.
“Therefore, through Essence, WPP is trying to ensure that all the best resources would work in interest of the brands together and will see to all the opportunities and challenges that the brands face,” said Sorrell.
Sorrell said the lines are getting blurred in the services offered by the various media agencies and the industry needs consolidation. He said, “If you look at the individual agencies within the holding companies, what is the real difference? If you look at Group M in that case, what is the difference between Mindshare, Mediacom and Wavemaker? The difference is only in our minds and the people who work in them. But for the clients, it’s the same.”
Sorrell also opened up on the personal allegations in front of the global media. Reacting to Financial Times’ report that he was not just abusive but also cruel to people in WPP, he said, “I am not an easy person to deal with. I am also demanding. I think that was fair. I demanded high standards. FT might have spoken to 25-27 people, but maybe they spoke to the wrong set of people.”
On the alleged use of company funds and petty cash on a lot of other things, Sorrell said it was false. “You should recall that there was an investigation. You should also recall that the investigation didn’t find anything in it,” he said. “Quitting WPP was in the best interest of the clients and the people at WPP.”