Tag Archive: Martin Sorrell

  1. Martin Sorrell’s ambitions for S4 Capital reflect a changing industry

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    Technology is dramatically transforming the communications industry – and S4 Capital is a reflection of that.

    When Martin Sorrell speaks, the advertising industry listens. That’s still the case even when he’s doing it as the head of a relatively small start-up, S4 Capital, rather than as the Chairman of WPP, the world’s largest communications conglomerate. Earlier this week he took to the stage at a Campaign Magazine event with his colleague Victor Knapp, the Chief Executive of MediaMonks, the content production company that S4 Capital acquired earlier this year. They discussed their ambitions for S4 Capital – some of which we will look at in more detail below; what is striking is that they are very much a reflection of how technology has transformed the media and advertising industries, fundamentally shifting priorities for brands and therefore for agencies. This change in direction is exemplified by the contrast between S4 Capital and the ‘traditional’ communications organisations such as Sorrell’s alma mater WPP.

    A digital and programmatic approach to media buying

    The ambitions that Sorrell and Knapp laid out for S4 Capital fall into four areas. The first is how S4 is approaching media buying. It’s telling that their first acquisition in this space is, according to Sorrell, likely to be in the digital and programmatic space, as ‘that’s where the biggest opportunity is’. Knapp added that the acquisition is likely to be a more ‘performance-based agency’, although he believes that ‘there is no difference between brand-building and performance’. There are many discussions at the moment around performance versus brand marketing – indeed, we wrote a blog about it and it was a hot topic at the ANA Masters of Marketing last month. Wherever you land in the debate, the inescapable fact is that data allows us to understand customers like never before and optimise activity to their preferences in real time; this has inevitably led to a focus on the performance of our media activity. Sorrell even went as far as to say that scale is not the most important thing anymore, as you can ‘make entries at a reasonable cost’ in the digital and programmatic arena. This demonstrates the impact that technology has had on the industry, if the size of your budget is no longer the sole most important aspect of your marketing strategy.

    A consumer-centric strategy calls for an always-on approach

    One of the key ramifications of the rapid advance of technology in the marketing space is that it has taken power out of the hands of brands and put it into those of the consumer. It is now the consumer that calls the shots, and advertisers must respond by focusing on the consumer’s experience of their brand and being ‘always on’. This is at the heart of MediaMonks and, by extension, S4 Capital’s approach to communications: it’s no longer about

    focusing on a big idea and creating 30-second spots. Brands and their agencies must consider how they can tell the best creative story across all platforms. This approach demands better, faster and more efficient content and, in Sorrell’s opinion, agencies aren’t responding quickly enough. This is the space that smaller, more agile companies like S4 can step into, as they come without the baggage of siloes, units and a plethora of agency brands.

    Helping brands to take control of their marketing services

    Data is, of course, the major marketing story of the 21st century so far and has fundamentally transformed how marketers operate, opening up a world of possibility and the opportunity to connect more deeply with consumers. It has also, unfortunately, led to issues of trust between advertisers and their agency partners, and a concern about a lack of control. This in turn has led many brands to at least consider bringing some of their marketing services in house and S4 Capital will have an offering that helps them to do that, although Sorrell pointed out that it can be difficult culturally for organisations to keep themselves and their talent abreast of the ever-changing market dynamics.

    As always, agility is the key to success

    It is telling that Sorrell and Knapp emphasised the importance of agility and consumer-centricity for S4 Capital. In the 80s, 90s and even 2000s, marketing was a very different affair and the role of the CMO was to relay stories to consumers on a one-way basis – and the likes of WPP, Omnicom and Publicis with their huge scale and buying power were well placed to support in that mission. However, technology has dramatically and fundamentally changed the landscape and the agencies that can respond rapidly in an agile, flexible manner are the ones who will stay relevant and useful for clients. This is clearly the space that Sorrell and Knapp are looking to occupy with S4 Capital, and we believe that they are well placed for success.

    Thumbnail image: Shutterstock

  2. New WPP chief hits the ground running

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    WPP has filled its CEO vacancy – and there’s a lot to do.

    A popular choice to fill big shoes

    Since Martin Sorrell’s acrimonious departure from the top job at WPP earlier this year, there has naturally been speculation around who would replace him. Charismatic and combative, and the chief architect of WPP’s growth from a wire and plastics company into the world’s largest advertising company, Sorrell left big shoes to fill.

    WPP announced this week that those shoes have been filled by Mark Read, who had been running the organisation on an interim basis, alongside Andrew Scott, since Sorrell’s departure. Read is a popular choice both within WPP and among shareholders, and was the leading internal candidate for the role. He has a proven track record in running WPP digital agency Wunderman, as well as in digital leadership and as a board member from 2006 to 2015. He is viewed as a steady pair of hands and someone who can hit the ground running – perhaps less charismatic and pugnacious than his predecessor, but that is widely seen as a good thing.

    Read has industry challenges to contend with…

    Read has his work cut out for him. The day after his appointment was announced, WPP suffered a sharp drop in share price, and the company recently announced a somewhat mixed set of results, with a small Q2 global revenue growth of 2.4% but a continued decline in its North American business, which dropped by 2.9%.  WPP is suffering from many of the same problems as its industry peers, including navigating the seismic shifts that the advertising industry is experiencing thanks to rapidly advancing technology. Many clients are looking to take at least some of their marketing activity in-house, forcing agencies and in particular media agencies to re-examine what the future looks like. Those that aren’t yet taking their activity in-house are simultaneously cutting costs and demanding greater transparency in the wake of brand safety scandals and the like. Furthermore, a new generation of competitors is springing up: not just the small boutique and niche agencies, but also in the form of companies such as Accenture and other consultancies, who are establishing capabilities in high margin marketing services such as data and programmatic

    …and in-house problems too

    Read’s challenges aren’t just those faced by the advertising industry at large: WPP has its own set of unique issues to resolve. It is famously huge, with hundreds of agency brands across the world, more than could ever be needed to manage conflict and who indeed often compete with one another. The many P&Ls

    make it unwieldy and, crucially, ‘impenetrable to understand’ for clients, in Read’s words. This is a major cause of concern for some of the group’s key clients such as P&G and Unilever, while Ford – WPP’s biggest client – announced earlier this year a review of its global creative business, currently handled by GTB, the dedicated agency established by WPP for the automotive brand.

    ‘Radical evolution’ is needed

    In response to WPP’s issues and in order to future-proof the organisation, Read has announced a ‘radical evolution’ strategy that will streamline WPP’s structure, consolidating some of the 170,000-strong workforce across 112 countries and 3000 offices. As Read said, “WPP needs to come closer together, not further apart. There are many good things about the business. It is a question of simplifying the offer, refocusing the portfolio and investing more in data and technology alongside creativity.”

    Read has ample experience in the digital side of the WPP business, and his transformation strategy includes turning WPP’s approach to how it works with data and tech on its head. He recognised that, in a world where the likes of Facebook, Amazon, Google and Alibaba own the lion’s share of consumer data, the most realistic way for WPP to monetise its data capabilities is to effectively borrow data from the tech companies and charge clients for data consultancy, rather than execution. GroupM agency MediaCom is already progressing in this area.

    Other elements of Read’s approach include actively helping clients take elements of their marketing in house by consulting on the strategy rather than focusing on the execution; and management of their data investment or research portfolio – it appears likely that Kantar Media could be sold in the not-too-distant future.

    The keys to success: steady hands and an open mind

    Mark Read is stepping to the fore at a time when strong winds are buffeting WPP and the wider advertising industry. However, a combination of steady hands at the helm and a willingness to transform the organisation’s structure and model could well be just what WPP needs to stay on course.

    Thumbnail image: Shutterstock.com