If you thought that Martin Sorrell’s exit from the WPP group was the end of a great career you were wrong. Sorrell now 73, who stepped down from WPP a few months ago, is making a comeback with a new advertising (and marketing services) venture.
With his experience of taking over an unknown firm called WPP which was largely a shell company 33 years ago, it was natural for him to try his hand again at a similar experiment.
Sorrell now is taking charge of another shell company – Derriston Capital – which he intends to turn into an advertising venture. Confirmation of the Derriston deal was confirmed first by Sky News. Derriston as a company has been on the New York Stock Exchange since 2016.
In this first interview with Anant Rangaswami on CNBC last night at Zee Melt, Sir Martin spoke on a number of issues with his usual eloquence. For those branding experts who are wondering about the significance of S4, it stands for four generations of Sorrells in the UK. (His grandparents came to the UK from Eastern Europe in 1899.) He quoted Brian Whipple the CEO of Accenture Interactive while speaking about how competition from consulting might affect the advertising agency business. Quoting an interview that Whipple gave he said: “the consulting companies don’t compete with the agencies head-on. They go above the agencies to the CEOs and CFOs, the CMOs and the CIOs and CTOs. And they say to them you are going through significant change, they might describe it as a digital disruption. You are spending a lot of money. Let’s look at it as one and let’s see how we can improve your productivity, improve your technological response, digitise your company, transform your company and at the same time spend less money. And by the way pay us on the basis of what we save. Which is a very alluring concept”.
Whipple has led Accenture Interactive’s disruption of the traditional agency landscape by creating a new service model. Whipple is known to have said “[Holding companies] are changing, but the pace of change is woefully slow. And it’s not because of the intent. It’s because of the structure and the culture.” One couldn’t help feeling that Sir Martin is welcoming the fact that by starting on a clean slate he might be able to do things differently with S4 than what he could do with WPP.
As a new way of doing business Sorrell said in the interview that S4 would not only like to sharpen its tactical response but also develop its strategic response at the higher levels of the company. He reiterated the need to be ready for change, whether cyclical or strategic.
But what shape might Sorrells new venture take? Given his penchant as a ‘math man’ and his various criticisms of the ‘madman’ era of advertising, he is likely to be more interested in the world of data and digital. It is quite likely that Sorrell’s new venture might be devoid of the traditional advertising agency. In any case revenues of all his advertising agencies put together in WPP were much smaller than the media company or the research company. Which goes to show that he perhaps thought that advertising was really an old-world phenomenon. Sorrell is putting in his own personal investment of £40 million into the new venture. Institutional investors include Lombard Odier, Miton, RIT Capital Partners, Schroders and Toscafund would add a further £11 million.
That, of course, does not mean that the new venture will be devoid of creativity in other forms. Sorrell always believed in creativity and the power of ideas although he is often accused of marginalising creativity. Sorrell always said that the definition of creativity needs to change because he said “we are not in the advertising business anymore”. Sorrell in the past has also said “75 percent of what we [WPP] do now, Don Draper and maybe even Sir John Hegarty wouldn’t recognise.”
So what might we expect from Sorrell’s new venture is perhaps a smaller WPP minus traditional advertising and the traditional way of doing business by holding companies. But like WPP it would grow through acquisition.
To go back to Whipple he is known to have said that for agencies to survive they must leave the founder’s culture behind. In the case of Sorrell, it might well the opposite. A case of the founder leaving his agency’s culture behind