Sir Martin Sorrell wants nothing to do with ‘slow growth’ traditional advertising
Sir Martin Sorrell has shared his fast-paced vision for S4 Capital during a lecture at The City College of New York.
BIC's Nancy Tag, Sir Martin Sorrell, and professor Michael Farmer
“I don’t want to have anything to do with anything traditional,” Sorrell said, in discussion with professor Michael Farmer, author of Madison Avenue Manslaughter. “I want it expunged. It’s slow growth.”
Sorrell wants his advertising and marketing services company to focus on content creation, first-party data and programmatic, in order to get faster, better and cheaper results in fast-growth digital channels.
In terms of growing S4 Capital through future acquisitions, Sorrell asserted that earn-outs don’t work.
He said when company leaders leaves fragmentation, is created, as they rarely stay long enough to oversee a successful transition and integration.
“I’m not interested in making acquisitions where the leaders want to buy out; I want leaders who want to buy in to being part of the [combined] organization,” Sorrell said.
Sorrell recently officiated the opening of S4 Capital’s offices in Singapore, where he talked up the company’s first-party data model and offered his thoughts on how clients and agencies should work together.
Stateside, he commented on the state of holding companies, saying they need to rethink their business model to meet customers’ expectations.
“Clients don’t care where the talent comes from,” Sorrell said, adding that clients just want results.
Sorrell recalled P&G as an example, noting that chief marketer Marc Pritchard had told three of the holding companies (including WPP, where Sorrell was chief executive at the time) that they would have to collaborate to continue to serve the consumer goods behemoth.
P&G has since taken considerable steps to reinvent its agency model by bringing talent from competing holding companies under one roof.
Sorrell believes that each of the big six holding companies needs to operate as one agency, not as a book of agencies. They should morph from holding companies to services companies — single agencies with multiple disciplines, he said. Though not an agency, Sorrell said McKinsey & Company is a good example of this.
“There’s not enough differentiation between the creative agencies,” he said. Plus, he added, the holding companies lose more by having competing brands rather than one brand.
Sorrell thinks Dentsu Aegis Network is best positioned to accomplish this shift, even though he thinks they’ve been too heavy handed with replacing senior leaders. Sorrell added that Publicis Groupe is going in the right direction but is moving too fast. And Omnicom, he said, “is strategically bereft but tactically solid.”
His recommendation: for now, the management of the individual agencies need to collaborate to best serve clients.
The challenge here, Sorrell said, is that agency leaders are cheerleaders for their brand. He said that one of the qualities that made former Ogilvy & Mather chief executive Shelly Lazarus such a great leader was her fervent dedication to Ogilvy. Sorrell added that this type of dedication, however, can make it challenging for a holding company to create one cohesive brand from its existing group of agencies.
Another challenge agencies face is pricing. Sorrell said: “The crushing weight procurement has had on advertising” had drastically changed the business and margins.