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S4’s APAC boss compares his ‘startup on steroids’ with ‘prehistoric ways’ of WPP


By Sam Bradley | Senior Reporter

May 25, 2022 | 8 min read

As S4 Capital looks to regain its growth momentum, APAC leader Michel de Rijk explains what the work of scaling-up looks like on the ground.

michel de rijk

Michel de Rijk is APAC chief executive officer for S4 Capital / S4 Capital

S4 Capital has come under intense scrutiny in recent months due to an accounting fiasco that sabered its share price and embarrassed executive chairman Sir Martin Sorrell.

Much of that scrutiny has focused on whether the challenger network has the business infrastructure equal to its ambitions as it acquires agency businesses across the globe. A recent Sunday Times scoop suggested that wasn’t the case, although the company has made a series of hires to beef up its financial governance in recent months, sparing no expense in the process with new chief financial officer Mary Basterfield granted a salary 48% higher than Sorrell’s.

But the work of gelling a fast-growing business like S4 together isn’t just about getting the branding right – or expensive hires. It’s also present in the day-to-day bustle of its agencies.

Startup culture

Superficially, much of the set-up at Media.Monks’ Singapore office still seems like that of a startup. The wifi network is named for a dirty pun on 72andSunny, the agency that previously occupied its space in Duxton – a whitewashed former biscuit factory in sight of the 65-story tower that houses holding giant Dentsu’s offices. Inside, bags of Cheetos are heaped on the kitchen counter while control of the office playlist is considered a high honor.

From here, S4’s Asia Pacific chief executive Michel de Rijk oversees operations across markets such as Singapore, Australia, Korea, China and India. He’s got plenty of headroom to grow. ”When we started, we said that in an ideal world our business would be split 40% Americas, 40% APAC and 20% Europe,” he says. ”For better or worse, the US has got a little bit too dominant for us because of a couple of mergers and the businesses there being bigger, so APAC is a little under at the moment.”

Fresh acquisitions, which S4 has said it is still focused upon in the medium-term, would change that. And the emerging markets of Vietnam, Indonesia and Thailand are only short flights away.

De Rijk earned his stripes at adtech firms such as EyeWonder, as they scaled and grew. The experience gave him an ease with the loose, agile business environments of startups, but at WPP, where he led and scaled Xaxis, he began to feel out of place.

”I moved to a role to help other businesses like Xaxis set up within WPP... and in that period, I got a lot of exposure to the M&A side and there were always a few things that frustrated me,” he explains. Principally, there was difficulty speeding up the holding company’s cumbersome approach to planning; once it had acquired ”a shiny new toy” in a given sector, its capacity to grow to the scale required was hampered by long financial earn-out deals for founders and agency leaders, who would typically retreat behind balance sheets once the ink was dry, de Rijk says. ”Every time WPP acquired something it would happen on a timeline of five years... but for those five years, the founders were protecting what they had built and maximizing their earnings.”

Those arrangements incentivized agency leaders against long-term investment, sharing resources, ideas or duties on key clients, he argues. ”We couldn’t offer these services to clients, to deepen the relationships we had, without having these internal distractions. It was a big frustration.”

WPP was ”too big and too dependent on prehistoric ways of structuring deals or doing business,” he says. ”It makes it very difficult for whoever runs that business to change.”

Complaints around lack of strategic vision, agencies being treated like corporate fiefs and 40 years’ worth of bureaucratic build-up are legion among the executives S4 has prized away from WPP (and there have been quite a few, including chief growth officer Scott Spirit, German managing director Thomas Sterath and former Ogilvy boss Miles Young). From its beginning, S4 has aimed to dodge that fate by offering founders a split between equity and cash and moving away from the traditional ’earn out’ acquisition model. But given that S4 founder Sorrell was also the founder of WPP, can de Rijk be certain he won’t find himself confronted again by those same problems once the company reaches maturity?

”Having the opportunity to take a white sheet of paper and draw out how we think we should do business today and in the future – because that’s where growth is – is an interesting way of doing it,” he argues. ”It’s sort of a startup on steroids.”

But as any decent physio will tell you, steroids can lead to long-term side effects. De Rijk says it’s inevitable a company that expands as quickly as S4 has since 2017 will run into problems: ”In the old world, [Media.Monks and MightyHive] would have merged into an established, well-structured, well-oiled organization with internal audit teams. We didn’t have that as such. We’ve been trying to reinvent the wheel while growing 40%, 50%, 60%, which isn’t easy. And unfortunately, that resulted in the challenges we have seen in the last couple of weeks.”

Acquisition targets

Growth is still the agenda at Media.Monks, however. De Rijk’s team in Asia covers both established markets and emerging ones, accounting for 1,000 of Media.Monks’ staff spread across China, Singapore, Korea, India and Australia – offices created from the acquisitions of Tomorrow, White Balance, Biztech, Destined, Lens10 and an asset deal with Datalicious.

S4’s tech services arm was launched to some fanfare last year, when it acquired Zemoga. But that pillar of the business doesn’t quite exist in Asia yet.

”We don’t have tech services here yet in this region; it was a relatively new pillar for us globally,” de Rijk notes. He says the business is split 60/40 between creative and digital transformation work. ”It’s a more balanced split between these two than we would see in other regions where our content offering is significantly larger.”

But its tech pillar could well be the next focus of its shopping activities in the region.

”Apart from Tomorrow, which became part of the overall Media.Monks content business and was bought as part of a growth strategy, all those other mergers have been about capabilities,” he says.

Continuing that strategy of building up capabilities – especially tech services – through acquisitions, is vital, says de Rijk. ”Building full capabilities up from scratch is a lengthy, time-consuming journey, so ideally we’re looking in that space at somewhere that can be an extension of the capabilities we’ve just merged with [such as Zemoga] across the US and the Americas,” he says.

Outsourcing that work to the company’s offices in the US and Europe would be inefficient, while local competitors in neighboring markets might undercut Media.Monks if they chose to create those capabilities through recruitment.

”It’s very, very hard to build up in this region. Take app development; you don’t build an app for a client in Singapore out of the US when you have similar [competitors] in Vietnam, in India... we need to be realistic about what you can service and from where.”

Expanding through the takeovers of buzzy, young tech marketing firms could also help de Rijk preserve the positive aspects of his agency’s startup atmosphere. While most agency offices in Singapore are deserted even with most Covid-19 restrictions now lifted, Media.Monks’ base stands out for the crowd of creatives and developers milling around.

Their enthusiasm will help maintain Media.Monks’ trajectory, says de Rijk. ”Everybody has a willingness to contribute to the global success. I think that’s a very strong argument – for us and for our clients.”

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