S4 to launch in India in Feb-end, will reveal CEO’s name soon: Martin Sorrell
Speaking on Day 1 at the IAA World Congress in Kochi on February 20, 2019, Sir Martin Sorrell, Executive Chairman of S4 Capital Limited, discussed the potential in data content and digital media planning and buying.
According to Sorrell, first party data is driving content, and for a very good reason. He added, “Control of first party data is critically important. That is where you win or lose. With the growth of fake news and political debates on platforms like FB and Twitter, there’s an issue of privacy which has worried the customers.” Model driven white data is critical, he said.
Giving his take on the Indian market, Sorrell observed, “For me, India is an interesting market. I have been coming here on and off for about 30-35 years and the business of WPP here is a prominent one, around 50 per cent of market share. But the Indian market is still quite traditional. There are two different strategies: Seagull management/ spreadsheet management, and Consolidated – Group strategy and separate – brand-wise strategy.”
He added that transparency in data is important in India, considering the fact how prominent traditional media is in India compared to ready of the world.
Sorrell also announced that his companies, S4 Capital and Media Monks, were on the cusp of setting up their operations in India. He added that the companies would follow a data-driven model in India, “where we take the content, develop it and then feed that content into programmatic media buying, depending on the behaviour of the consumer. This model using data has been done before. S4 Capital is purely about digital; 40 per cent of our clients’ budgets suffuses digital at the moment.”
Adgully caught up with Sir Martin Sorrell to know more about his India plans.
How is the experience of starting an entire new venture in your 70s?
Just like the first time. I can’t tell you what it’s like, compared to when I was in my 40s. It is a bit different in a funny way. The good news is that you have a clean sheet of paper, but the bad news is that you have a clean sheet of paper. When I left Saatchi and went to what was Wired Plastic Products (WPP), we didn’t have the resources and had to build from scratch. All there was, was the excitement of starting anew. You don’t have the history, you don’t have the weight of the past, the anchors and the adroitness of the past. You can set your own agenda. If Media Monks or MightyHive were available – which they were – you ask around in the industry what their reputation is, it has a pretty strong reputation among clients, business journalists, analysts, et al. You have the opportunity to fashion something in your own way, with your own ideas.
When I think about what happened before, like when I was in Saatchi, it was all about globalisation. When I was at WPP, it was about reinforcing globalisation. We were into technology in a big way – 40 per cent in digital when I left. Now, 100 per cent of WPP is in digital; digital is the prime mover and globalisation is still important. But you need to ask yourself – is it necessary to be in 113 countries? We recently set up our operations in Japan and now we are all set to set shop in India, which will be our 15th country.
Could you tell us about S4 Capital’s India foray?
We will start our operations in India by the end of February 2019. We have somebody in place to run the operations and we will reveal the name soon. It will be a completely Indian operation and we are not going in with a partner. We will be starting from scratch.
You have been a frequent visitor to India. What are your key observations and takeaways from the Indian advertising market?
I think the Indian market remains very vibrant. Obviously, the industry is still growing. The agencies seem to have flattened out, so it is tougher for the agencies. The agencies here see the same challenges here as they see elsewhere, but fewer ones. The market is more traditional, with traditional media playing a greater role. It might continue to be so in the future, but will be subject to new pressures.
What also interests me here is the two-tier economy in India. The pace of technology in the country is very high, with Bangalore becoming a tech hub just like the Silicon Valley. It’s a great market and is heading to be the most populous one on the planet. India is full of potential and I think that’s a dividend and not a liability. While India might not be the wealthiest country on the planet, but from a media point of view, it will only grow in importance.
You have stated earlier that 2019 will be a bumpy year. What are the challenges that you foresee?
There is a strange dichotomy or difference, and to me that signals that there is going to be a fair amount of bumpiness. Take Brexit, for example. To my mind, Brexit is a side show to the trade fight; it’s not a tiff, it’s a war. Governments are changing; India is set for its General Elections. I think this is about who is going to be top dog.
What would be the key revenue earners for S4 Capital in India?
Well, disruption – or bumpiness – is good for us, because we are a disrupter and we are at the early stages of our business. We are not a big far-flung company. We have 1,200 people. This year, our brokers are forecasting $225 million in revenues and $600 million in market cap. Thus, bumpiness is a good thing for us, while it is not the case for the established people. For them, it creates more and more challenges, while for us it creates opportunities. The more disruption there is in the system, the better for us.
We see a lot of spends in digital, but the market is getting more and more fragmented…
When it’s fragmented, it throws up consolidation opportunities. So, fragmentation is not such a bad thing. I think you’ve got to be a bit careful about that. When an industry is in its early stages, it tends to be more fragmented. As it matures, it gets more consolidated. In 1985, when we focused on what is now called below the line, it was highly fragmented. The reason it was highly fragmented was because nobody took it seriously. It was in its early stages, so the opportunities to consolidate were significant then and that’s what we did. But it is different with digital, because that is serious stuff and people understand it. I’d like to think, though I may be wrong, that digital is ripe for consolidation too.
Are you relishing the David vs Goliath moment with WPP?
David defeated Goliath! I am trying to think of the small and big ways that the Lilliputians overcame Gulliver. ‘The bigger they are, the harder they fall’, is what the phrase is. It is not a question of David and Goliath, I mean I’ve done this before and this is the third time. The first time was when I joined Saatchi. Then how we grew Wired Plastic Products into the WPP conglomerate. And now with S4 Capital.
How are you looking at this challenge? Are you fully geared?
I know from my experience in the last 6-9 months that if we get Media Monks or MightyHive to a client, they will win the business. They are extremely effective at winning businesses.
Will we see more of you in India once operations for S4 Capital begin?
No. Once the operations start, I will depart.