Sir Martin Sorrell picks India CEO of S4 Capital, all set to announce the name
S4 Capital to initially start operations on the content side with MediaMonks in India
Sir Martin Sorrell, founder of S4 Capital and WPP, has zeroed in on an India CEO for his new company S4 Capital, and is all set to announce the name this week, ahead of launching the company’s operations in India.
Talking to exchange4media on the sidelines of the International Advertising Association (IAA) World Congress at Kochi, Sorrell said, "We are going to launch S4 Capital shortly in India and we have chosen our head for India. We will initially start on the content side with MediaMonks." Sorrell refused to divulge the name of the person, but said, “His name will come out later this week.”
Meanwhile, S4 Capital has been talking to Indian advertisers and expects new partnerships to be forged soon. Globally, S4 Capital has had a very good new business run, adding to its kitty blue-chip clients such as Apple, Google, Adidas, P&G, Johnson & Johnson, Netflix, Starbucks, Nestle, etc., in the last few months.
Speaking at the event, Sorrell described S4 Capital as the ‘New Reality', which differentiates it from his previous company, WPP. He also emphasised the importance of controlling first party data. “First party data is critically important. That is where you win or lose,” he said. “With the growth of fake news and political debates on platforms like Facebook and Twitter, the issue of privacy has worried customers.”
Addressing the concern for data privacy, Sorrell said, "One has to explain to the consumer in simple terms what he/she is getting into when they sign up for something. We complicate what is actually simple. The consumer wishes to be informed and not to be surprised."
He also said transparency in data is of utmost importance in India, considering how prominent traditional media is in India, compared to the rest of the world. But although reliant on traditional media, India will be the most flourishing business, “because of the talent, quality of people and tech capabilities are so good” Sorrell said.
To youngsters present at the event, Sorrell said, “The position of the media industry is much better than what it was 10 years back and it's a good business to get into. Our biggest clients are from the tech domain. Our recruits are really excited about technology. We are more attractive to the population than ever before.”
In April last year, the 73-year-old Sorrell had stepped down – or ‘been electrocuted’ in his own words - from the position of CEO of WPP. Six weeks later, he made a comeback to the marketing and advertising business with his new venture, S4 Capital. In July last year, S4 Capital acquired Dutch digital production firm MediaMonks for $300 million and in December bought San Francisco-based programmatic ad firm MightyHive for $150 million, sending out a strong signal that he has started building his new empire.
Here are excerpts from our conversation with Sorrell:
Where is S4 Capital poised at this point? What is your vision for it, and what is happening as we speak?
It is going to be a purely digital operation, focusing on three areas –data, driving digital content, and media planning and buying or programmatic… It’s a unitary structure, so we have brands fusing creative with media; merging MediaMonks and MightyHive in with the principals having significant shares.
Last year, we had revenues of around $150 million and EBITDA of $30 million. This year, analysts expect $225 million in revenues with an EBITDA of around $45 million. That’s 50% growth, and all organic growth without any acquisitions. Now, we have a market cap of $600 million, which is significant, for the last six months. These are strong numbers.
Then our mantra is faster, better, cheaper. Faster means being always on. For instance, running a campaign now would mean running a campaign for Prime Minister Narendra Modi or the Congress party and being active on Election Day! Better means using technology aggressively and effectively, whether it is AI, AR or VR. Cheaper means in a world that’s growing slower in nominal terms, clients are focused on costs being more efficient.
What is the kind of company you want S4 Capital to be – should it grow very big or necessarily remain at a particular size so as not to be unwieldy?
Growth is essential. What we’ve done is look at the areas of WPP which were growing, data and digital content, digital media planning and buying. We’ve gone for the sweet spot, what McKinsey identified as the key factor for corporate success - being at the right place at the right time, pushing on an open door, not pushing on a closed door. We’ve gone over revenue, and revenue growth is going to be the key metric. We want to be known as the digital leader and we want our model to be a proven one. The measure of success will be the proof of the concept.
What is one thing that you would like to change in the advertising industry?
What I would like to do is change things to the benefit of S4 Capital. For instance, I’d like the Indian market to be more transparent.
Do you miss being at the head of a large company like WPP? What are some of the things you can do now that you did not have the time or bandwidth to do earlier?
Now, I can get involved deeper in industry issues. I have more time to spend diving into things deeper. Earlier, by definition, it would be more superficial.
Now, the advantage is not being bound by history, the disadvantage is you don’t have the scale. We have to create the new operations, which we’re doing, to achieve scale.
What is your favourite India story – an anecdote or incident that you are fond of telling?
(While at WPP) We made Sam Balsara of Madison an offer that we thought he couldn’t refuse. But he refused it!
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