Sir Martin Sorrell is squaring S4 Capital up for 50% year-on-year growth by earmarking business in Latin America and Western Europe, as well as striving for “broader and deeper” relations with existing clients.
After a bold launch in 2018, the founder is clear this should be the year S4 proves “the model works”; the model being a purely digital, unitary agency brand that creates work in a way that is “faster, better [and] cheaper”.
The mergers – spun not as sell-outs but buy-ins – with digital production agency MediaMonks in July and programmatic outfit MightyHive in December stole the headlines throughout the latter half of last year, but now organic growth will be as vital to hitting analysts’ 50% annual growth predictions for Sorrell’s S4.
“We have to build bigger relationships,” he told The Drum. “We have a client list to die for, but we're not as broad and as deep as we should be with each of those clients. We have to broaden them and deepen them, and we have to convert the leads that we've got, which we're doing very well.”
He noted that more acquisition will be on the cards if cashflow remains strong; he’s confident it will, citing shrinking acquired debts and a growing assignment list from a number of global clients that he cannot name on the record. One he can name is P&G’s Braun, which MediaMonks fought WPP to win at the end of last year.
A select global footprint
Sorrell is now looking for organic growth and, potentially, M&A deals across a wider global footprint. S4 now has a presence in 13 countries and the chief executive hopes to expand this list further, particularly in Western Europe and Latin America – political uncertainty in both territories notwithstanding.
Germany, Italy, France and Spain are all earmarked to join the UK, the Netherlands and Sweden on S4’s European office list. Poland and Russia are further down the country shopping list, but “but that will be it” for the continent. MediaMonks is set to open in India
The founder noted a “strong business [in Latin America] already ... and I want to expand it”. He cited Argentina as a key market for both creativity and technical talent (MediaMonks has operated out of Buenos Aires since 2016) and has an S4 pin hovered over Colombia, “and maybe Chile".
He is cautiously optimistic about the effect political upheaval in Venezuela, Brazil and Mexico will have on business in South America, a place where S4 currently enjoys the ability to flex on price. He takes a similar view on Brexit and possible executive change across Europe, although is confident the company’s market position will be a weapon in such a time.
“I think 2019 is going to be a bumpy year,” he said. “There's going to be a lot of ups and downs probably driven by these social issues and that's going to create even more disruption, which from our point of view as a challenger – a new boy on the block – gives us more opportunity.
“The more disruption there is, probably the better it is for us.”
From his trips to CES, Davos and the North American International Auto Show in the first month of the year, Sorrell anecdotally noted clients experimenting in ways he has never seen before in his 40+ years in the industry.
“In an era of transformation or disruption or whatever you want to call it, [clients] look for different ways of doing things,” he said.