Sorrell On Ads’ ‘Holy Trinity’ & S4’s Push For Growth
It may be barely a year old but, already, the digital ad services group formed by former WPP CEO Sir Martin Sorrell is making headlines.
After its initial capitalization, S4 Capital was kick-started by a pair of key acquisitions - content studio MediaMonks and programmatic firm MightyHive - and further acquisitions will continue to provide the fuel for its future.
This summer, S4 issued a half-year earnings report showing: its headcount had grown by 60% to 1,375 people, including some former WPP executives.
Pre-tax profit hit £6.48 million, despite an overall gross loss thanks to acquisition costs it targets "doubling the size of the company organically by 2021".
In this video interview with Beet.TV, Sorrell says S4's growth will come from three business areas he calls "the holy trinity": first-party data (BizTech, etc) content (MediaMonks, Caramel Pictures, IMA) programmatic (MightyHive, ProgMedia) "This is a continuous loop," he says of the new approach.
"You take the data, you develop the digital advertising content from the data, you pump it out programmatically, you look at the results, you get more data that improves the content.
I liken it to an election campaign without an election date." Sorrell says S4 will not be so much "digital-first" as "digital-only", and aims to grow faster than the agency holding group he led for so many years.
"We're growing a top line of 40% plus, which the agency holding companies would die for," Sorrell adds.
"We're a very small-scale, but we're getting bigger all the time.
And, (in) the second half of the year, we'll be growing at an even faster rate.
"Our largest client is about $20 million (profit) out of this year, probably around $250 million of revenue.
"We think we will grow at 50% for the year.
The question is, 'How can we get that 20 to a 60, 70, or 80 million (profit)?'
We'll get there through a mixture of organic growth and deals.
We will have whoppers and I'm totally convinced of that." When S4 issued its half-year earnings, Sorrell said it was bidding for three “major” global marketing contracts", Financial Times reported.
The company reported its clients include Procter & Gamble, Nestlé, Coca-Cola, Sprint, Bayer, ASICS, Vodafone NZ, SoFi and Lavazza.
This video is part of a series of interviews conducted during Advertising Week New York, 2019. This series is co-production of Beet.TV and Advertising Week. The series is sponsored by Roundel, a Target company. Please see more videos from Advertising Week right here.