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02 February 2022
Sorrell's back, back again
A retrospective of the S4 Capital Chairman, Martin Sorrell, founder and erstwhile CEO of WPP, explores the storied mogul’s strategic tendencies.
Why it matters
WPP is a major holding company whose design was profoundly influential to the structure of advertising as we know it. Sir Martin Sorrell’s second act as Chairman of the more digitally minded S4 Capital points to the changing shape of the agency business.
The story: starting is easier than rebuilding
S4 has moved quickly and found success as a featherweight protegee to his own creation. Per the Journal, S4 Capital is now worth around a fifth of WPP but with a far lower headcount, and therefore lower wage bill.
The firm’s growth strategy leans heavily on acquisitions – like WPP before it – but now with a greater emphasis on integration, a lesson learned from struggles during his later holding group career.
S4 Capital is also more disciplined on branding and concentrates on folding new acquisitions into its Media.Monks brand, all operating on one profit and loss.
This is designed to limit the inter-agency competition that had turned into a drag on WPP.
Much of WPP’s recent strategy has involved simplifying and integrating its different capabilities to attempt to disentangle those problems.
Now Sir Martin Sorrell tells the Wall Street Journal that if he was still at the helm that he would break the group up. “That’s the only way you can deal with that model,” he says. WPP says it’s doing just fine, thank you very much.
The problems continue. S4 Capital has set about winning acquisition battles – WPP was also in the running to buy Media.Monks – and taking big chunks of ad accounts for major brands like BMW and Mondelez that had been WPP’s bread and butter. Now, S4 Capital is working with one of its largest backers, Stanhope Capital, on a VC project, S4S Ventures, with interests in:
The story of Sorrell’s departure from WPP is a well-known drama. In 2018, a widely- reported personal misconduct allegation emerged threatening, despite the founder’s denials of any wrongdoing, to damage the business. It is in the name of the business that Sorrell resigned.
Soon after, the Journal reported that the probe had looked into the misuse of company funds as well as improper personal behaviour. Soon, he was back on the horse, making waves in Cannes with his plans for S4 Capital, and denouncing the leaking that had fuelled those reports.
Observers close to the action argue that salacious allegations were far less personally wounding than the suggestion he was not up to the job of running an agency operation fit for the digital age, an assertion that he has spent this second act refuting.
Sourced from the Wall Street Journal, WARC, Stanhope Capital. [Image: S4 Capital]