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Sorrell on cookies: ‘We thrive on disruption and what Google did is highly disruptive’

Sir Martin Sorrell, founder of S4 Capital

Google last week clarified its plans for a ‘privacy-first web’, confirming the obsolescence of the third-party tracking cookie as well as rubbishing suggestions that alternate identifiers could replicate them. As adtech stocks took a battering off the back of the news, we caught up with Sir Martin Sorrell who explained how the changes will impact S4 Capital – his answer to a modern marketing network.

As the world’s largest web browser with stakes in huge advertising and content platforms, Google’s move away from third-party tracking towards anonymized cohorts grouped by interest is widely felt to have implications for the future of the open web.

Sir Martin Sorrell, meanwhile, has been talking a big game since leaving WPP and launching, floating and building S4 Capital, with its aggressive expansion contrasting with a broader slowdown of mergers and acquisitions in 2020. The company turned its first profit in the first six months of 2020 and picked up greater momentum through the year.

Sorrell now tells The Drum that Google’s announcement only emphasizes why S4 is being built in such a manner. “We will thrive in a more disruptive market, and what Google has done is highly disruptive.“

Being part of the service layer shields the business from the immediate waves hitting adtech stock and Sorrell sees opportunity ahead. “We advise clients on the hardware, the software and the platforms they should be using. That, in theory, makes what we do much more valuable. We’re trying to guide people.”

He claims he won the Mondelez content business after getting a foot in the door with a data and analytics brief. Personalized content was the name of the game, but how do you deliver that without tracking the movements of the individual? In the post-cookie world, there will be difficulties in measurement and modeling consumer behaviors. But it’s not exactly a new development.

“There have been 15 months since that first Google blog to prepare for the demise of third-party cookies. We’ve had Apple and IDFA in the meantime. Google is making the changes in response to government regulations and changes in consumer sentiment – 79% of US adults say they are ‘somewhat concerned’ about how companies are using their data.”

One of Sorrell’s clients told him they believe it’s the right move from Google. They think it was caught off guard with how fast Apple moved with IDFA. Now said client is looking to create a “data-driven marketing and sales organization” supported only by first-party data. “It’s a natural evolution.”

This shift may have just blinded the holding companies. “Third-party data sources are becoming increasingly irrelevant. The holding companies get third-party data from Acxiom, Epsilon, Kantar and even Merkle. This will become less and less valuable.” Curiously, Epsilon's stepped out to claim third party data isn't dead.

For S4, the money has been invested in developing data and analytics consulting capabilities, he says.

“It becomes increasingly relevant. Instead of buying what is now useless third-party data, we’ve bought what we think are useful data analysis firms. Our biggest clients will all pool their data [to gain a clearer picture of consumer behavior].”

As the trackers are blinded, audience modelling will gain importance. As will collaborating data where legally possible. “This is not brain surgery. You don’t have to be an Einstein to figure this out. This is the stuff that needed to be done anyway, just now it has accelerated.”

On the data front, S4 is leaning on MightyHive in the US, while internationally Metric Theory, Digodat, Lens10, Brightblue Consulting and Orca are acquisitions that build it up in this space.

This is a new cycle of adtech. Marketers will need to test the new approaches. Google’s FLoC will open up in May, for example.

“We’re entering a period of experimentation. It is a matter of whether the market thinks these replacements are acceptable or not. They’ll be testing them out. With its large share of the browser market and adtech market, any changes Google makes will impact the entire industry. Marketers need to understand how these new methods work.”

Sorrell also sees a boom for in-housing ahead. Embedded staff will likely be best placed to work with the client’s first-party data. “I’ve been banging on about agility and clients taking back control of data for years,“ he tells us, pulling up an article on The Drum to prove his point.

If S4 is as effective in digital as its pitch suggests, there’s another strong year ahead. After rhyming off the Q4 ad spend increases of Google, Amazon, Facebook and Snap, he predicts that if GDP grows by as much as 5-6% in 2021, digital ad spend could surge as much as a fifth.

Sorrell will be looking to attract much of that into this burgeoning new network, guiding clients through spend in some 25 (he says) walled gardens.

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