Sir Martin Sorrell is the kind of founder most valued by people in Silicon Valley. He has enjoyed great success, having built the world's largest advertising conglomerate for 32 years, WPP. He also wants revenge. As soon as the WPP board began investing "alleged violations" in the spring of last year – the council then asked him to pay back $ 200,000 in personal expenses – Sorrell left the company in shock.
Six weeks later, he formed a new company, S4 Capital, using a guidebook that he said worked. Like London-based WPP, which he and his colleagues launched by buying controlling shares in a public company that makes wire baskets and teapots – which are then used to launch global shopping – S4 emerged from a reverse merger with Derriston Capital, a small shell company that went public on the London Stock Exchange in 2016 and changed its name to S4. Then start appearing.
Already S4 – funded by Sorell with £ 40 million, and which has generated tens of millions more than other institutions for acquisition – has succeeded in pursuing nine companies, although Sorell stressed this was a merger. "All half cash and half inventory." There is no long lock, said Sorrell, who bounced around the US this week before heading to the Web Summit event in Lisbon. "If you want to sell your company, if you want to do a quick kill and get out, we are not interested. If you want to register to our vision" and help change S4 is a powerhouse itself, that's a different story, he suggested.
Silicon Valley seems to be a big part of that picture. Last month, S4 Capital completed a $ 150 million deal to join the region's largest digital agency, nine-year-old Firewood, with S4 paying $ 112 million in advance (half share, half cash) and the rest coming if Firewood reaches its target. target for this year.
It was also late last year joining the San Francisco-based digital media and MightyHive's programmed consultation on a $ 150 million deal.
If it attaches to WPP once in a while, it might as well be okay. The first acquisition of S4 Capital, for example, from the Dutch digital production agency MediaMonks, came at the expense of WPP, who had also tried to buy the company. WSJ reported at the time that S4 agreed to pay around $ 350 million for the agency.
The broad idea, he said, is to focus S4 entirely on digital advertising and on media and marketing services specifically, where in 2019, for the first time, world advertisers will spend more than half of their advertising budget. "The digital media industry is up 6 percent [for the year] and that's for traditional media, so we go where growth is and push the door open, not burdened by analog legacy or business. "
Asked whether he also had an ax to drive away when it came to WWP – who explored the world of digital and traditional advertising – Sorrell did not hesitate. "I want to see this approach work. And if it's an ax, that's right. "
Most of these approaches are centered on partnerships with, rather than trying to compete with, advertising tech giants, including Facebook and Google. Other technology clients currently include Apple, Salesforce, Microsoft, LinkedIn, Uber, and ServiceNow, according to Sorrell, treating strategic and creative marketing professionals S4 as an extension of their internal marketing team.
Firewood, for example, will embed teams in companies like Google to "understand clients as best they can," Sorrell said, adding: "We don't compete with [these companies]. We serve them; we work with them. If we are rude about it, we are retailers for each of them. They do not want to enter the service business. "(One task that makes Sorell look very proud is centered on Netlix, which MediaMonks collects 15-second video footage from the third season of" Narcos "which serves different viewers by using different tag lines and different edits." Personalization on a scale is very important, "Sorrell said.)
Asked whether he thought some of these technology clients had to be broken down, given the key to the customer data they had, he insisted he did not, "as long as they are transparent and they really use their strength responsibly."
Asked how S4 cope with the increasing number of people who no Thinking companies act responsibly with their personal information and may increasingly choose not to share it, Sorrell ignores those concerns. "My view is that as long as consumers know what they are leaving for, it's OK. If I know how my data will be used, in simple language, [I’m not going to opt out.] I think we will have a different model, [such as] ‘I want to control my data [you’re going to pay me for it in some fractional way]. 'The problem is caused by people who do not know what is being done with their data. "
The real problem, "Sorell continued," is the size of these companies. When Apple was the first person to become a trillion dollar company, [former Goldman Sachs CEO Lloyd Blankfein] was asked which would be the first $ 2 trillion company, and he said there would be no company because there was no state stage that would allow companies to get $ 2 trillion. You see this in China too. I've heard concerns about Alibaba's size too. This is not just a Western phenomenon. "
And what about political advertising, we ask Sorell. Should this platform run it, whatever its contents? That one, he said "is very difficult. My view has always been that this is a media company that is responsible for the content that flows through their pipes. I think they admit it; Facebook has thousands of people who monitor content.
"But should we accept political advertising or not? Well, in England. You have to be honest. If the ads are not honest, we have a problem.
"I think Zuckerberg made the argument that his people know what facts are or not, but mediating the truth or not is quite difficult," he admitted.
Sorrell was less careful about the traditional advertising giant, as he had built himself for three decades before leaving suddenly last year. Maybe that's not surprising, given his new efforts, but he said that companies, with their tangled property, which are mostly run like independent domains, must be demolished. "I don't think they have the opportunity to make it with the legacy assets they have."
Sorrell recalls one "dirty comment" made by one of the established players, about his new venture: "Someone called us spec in the mirror."
Continues Sorrell, "When you are in a car accident, the spec in the mirror chases you very quickly."