Sir Martin Sorrell doesn't believe in keeping a low profile. After departing WPP he was soon back in the saddle with a new venture and now he's hitting the event circuit again. Sam Pena-Taylor was at the Festival of Marketing to hear him.
If advertising has something approaching a cartoon villain, Sir Martin Sorrell may just be it. The events of this summer would, for many other business people, be a very good reason to lay low for at least a little while. After all, the man is not only senior enough at 73, but also rich enough to sit back and take solace in a very healthy portfolio – he remains a top ten shareholder in his old firm – not to mention the pay packets that made headlines toward the winter of his WPP career.
When he drew shareholder ire for a whopping £70 million pay packet nobody could foresee his exit from the company that he had spent over thirty years building. But now that he’s out, he’s not giving up the fight. Sir Martin, whose honorific has led to an almost Brazilian-style familiarity across the global marketing industry, took to the stage at the Festival of Marketing, walking through the crowd like a boxer. A celebrity, a pantomime villain, perhaps - but there’s still some energy of the streetfighter there.
London’s Docklands are an appropriate setting. Though Sir Martin is originally from London, his lifestyle has been global for a long time. This area has undergone a lot of change in recent years. But it always has been a site of change, of mercantilism, of new ways to make a living. People who knew how to sell came here to change things. Like any good seller, Sir Martin knows to follow that change.
Change is happening at several levels. At the strategic level, he observes, there isn’t a CEO, CIO, or CFO left unaffected by the tide of digital transformation or disruption. It is at this level that he intends to operate with his new venture, S4 Capital. The mechanism through which to do it comes down to more tactical capabilities.
First, companies feel a need to produce content faster than ever, a topic that he calls, simply, “issues around content”. Other tactical disruptions are more technical; first-party data, and particularly Amazon’s grasp over much of it, is reframing the advertising space. Finally, there are demands for ever more sophisticated media planning and buying techniques through programmatic. It is in this context of “radical revolution” in which he is working.
He compares the present to the advertising business of the 1970s and 1980s, reflecting on the way in which he came to dominate it. That agency revenue, he says, was “royalty on the growth of multinational businesses”; S4 Capital’s opportunity, meanwhile, is on the growth of Facebook, Google, Apple, Amazon, Microsoft, Tencent, and Alibaba – a group he refers to as “the seven sisters”.
Simply, it is what clients want. With regard to S4 Capital, and its first acquisition, the Amsterdam-based Media Monks, he admits that “a lot of people will recoil at this” but the offer he’s proposing is just “faster, better, cheaper”. At the same time, “it’s nonsense to suggest […] that creativity is not at the centre of what we do”; but in a marketplace in which efficiency is now a much bigger priority, he argues that “creativity has changed”.
Traditional agencies have known good times – Sir Martin knows those well, too – but he has little truck with those who would prefer the glossy realm to remain unchanged. It’s the corner-office, Ferrari-driving types in agencies, again no strangers to him, that bemoan the shifting sands. Frankly, they’re looking through rose-tinted glasses, he says. Data is now at the core of creativity, and any contender must be ready to compete on that level, too.
Is S4 Capital, and its small but healthy agency acquisition, a criticism of the holding company mode that he played such an important part in building? Sir Martin looks ahead: if his predictions are right, the next 12-24 months are going to be crucial to advertising. During that time, he believes, “the pace of change is going to be even more violent”. In that regard, starting with a clean sheet could have distinct advantages over the weight of the legacy company. But like any fighter no longer in control, he misses his clout. “I miss the scope” of WPP, he admits.
But fundamentally, all the holding companies are going in the same direction. “They’re all making omelettes but the difference is how quickly they break the eggs.”
Those eggs are individual agency brands, most often, but the point is that clients aren’t much concerned about the agency brands, they want the capabilities and don’t really care who does it. Brands need the job done and they need it for the best price possible.
The world is very different, as Sir Martin sees it, from the days when multinationals reigned supreme. In 2017, there were two significant moments of pivot. The first was the failed Kraft Heinz bid for Unilever, which shook the business world and demonstrated that nobody is safe. Secondly, Rupert Murdoch’s decision to sell Fox, Sir Martin believes, is a signal that “there are some fundamental shifts taking place in the content and media industry that even he [Murdoch] found difficult to navigate.” Beyond that, the undoing of historic marketing relationships – witness Amex, Ford, and GSK’s moves away from WPP – signal that something much bigger is going on.
When the prospectus for S4 Capital emerged in mid-September, the marketing press scoured it for clues to Sir Martin’s next move. Perhaps the biggest clue was the front cover, an image of the Burning Man: a symbol, he says, of “creative destruction”. Is this a symbol that might reflect his aims, his plans? Does he see it as his role? Sir Martin avoids the comparison. There’s a revolution going on; he’s just finding his way through it.