The purchase, confirmed by the Financial Times, marks the second of Sir Martin’s acquisitions at the helm of his new company, S4 Capital. It follows the acquisition of the Amsterdam-based MediaMonks, a digital-first creative company and the ability it has brought to S4 of doing content, “faster, better, cheaper.”
In the document detailing the acquisition, Sir Martin builds on his often invoked comparison of his new firm to peanuts. “The merger with MightyHive marks an important second strategic step for S4 Capital. The peanut has now morphed into a coconut, and is growing and ripening.” He adds that the combination of MediaMonks and MightyHive “will give S4 Capital’s clients end-to-end, fully integrated and seamless capabilities in purely digital marketing”.
Based in San Francisco, MightyHive was recently joined in the Bay Area by MediaMonks. This geographic proximity to some of the fastest growing companies on the planet is crucial to Sir Martin’s current project. He has likened the growth of agency revenue in the latter half of the 20th Century to the growth that’s possible in the 21st. But while agencies enjoyed a royalty on the growth of multinational business, he sees S4’s opportunity as the royalty on the growth of “the seven sisters”: Facebook, Google, Apple, Amazon, Microsoft, Tencent, and Alibaba.
MightyHive adds to Sir Martin’s interests in the growing programmatic space. What makes the difference, though, is how it fits into the crucial in-house programmatic space. As IAB data shows, almost a fifth (18%) of US advertisers have moved their full programmatic capability in-house, while 47% have brought it in partially.
As well as an outsourcing programmatic capability, an important part of the MightyHive offer is the in-housing advisory business. Sir Martin alludes to this capability, of working deep within a client’s organisation. “Clients of all kinds want these services delivered faster, better and cheaper, by more agile and responsive organisations, either in-house, co-located with them or alone.”
It is a canny move, one that reflects a subtle reading of the in-housing phenomenon as about trust and control of data and technology rather than cutting costs. Speaking recently at a London event, MediaLink SVP Nick Manning spoke about his take on the debate. “In-housing is about having the motive to manage the supply chain: knowing exactly what technologies you're using and why, how much they cost, how much data sits within that, and knowing that the data is secure”, he said in comments reported by MediaTel.
“I think it’s structural, and the need to control data is here to stay. While that remains, an element of in-housing has to happen - such as ownership of technologies. That doesn’t mean to say there won’t be a settling down into more hybrid solutions, which has already started to happen.”
Sourced from the Financial Times, Investegate, IAB, MediaTel; additional content by WARC staff