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S4 Unitary Structure

Founder of WPP and Founder, Executive Chairman S4 Capital

IP Interview
Published on December 27, 2020
S4 Capital

Why is this interview interesting?

  • How S4 Capital’s unitary structure works and why it doesn’t for incumbent agencies of record
Executive Bio

Sir Martin Sorrell

Founder of WPP and Founder, Executive Chairman S4 Capital

Sir Martin Sorrell is Founder and Executive Chairman of S4 Capital plc, which is building a purely digital advertising and marketing services business for global, multinational, regional, local clients and millennial-driven influencer brands. Sir Martin was CEO of WPP for 33 years, building it from a £1 million “shell” company in 1985 into the world’s largest advertising and marketing services company. When Sir Martin left in April 2018, WPP had a market capitalisation of over £16 billion, revenues of over £15 billion, profits of approximately £2 billion and over 200,000 people in 113 countries. Prior to that, Sir Martin was Group Financial Director of Saatchi & Saatchi plc for 9 years and worked for James Gulliver, Mark McCormack and Glendinning Associates before that. S4 Capital plc merged with MediaMonks, its content practice, in July 2018 and MightyHive, its programmatic practice, in December 2018 and has added eight further content programmatic and data companies to both practices in 2019 and six in 2020. It is listed on the London Stock Exchange under SFOR.L and after a little over two years, S4 Capital plc has over 2870 people in 30 countries, with a market capitalization of over $2.7 billion. Sir Martin supports a number of leading business schools and universities, including his alma maters, Harvard Business School and Cambridge University and a number of charities, including his family foundation.

Interview Transcript

Why does it make so much sense to integrate the assets at S4?

It makes sense because that’s what the client wants. The client doesn’t worry about where it comes from; we worry about brands and everything. When you collapse the brands, you lose so much, in terms of corporate memory, corporate knowledge and good people. I was talking to somebody who was in a very strong digital unit, inside one of the holding companies and I asked why he had left; he’d been at that company for 16 years. He was in a part of the company that was put in the ascendancy and he said, we drove the business and we were very ambitious then there were four companies that were put underneath us, who were good. But because they were so ambitious, everybody in that top company was promoted and put in charge.

It’s rather like when you talk to people at JWT. When Wunderman and JWT were merged, the joke was that you had to have been at Wunderman to get a senior position. What happened was that all the people in JWT were demoralized. This other guy that I was talking to had been in this organization where he was put on top; all the good people left and took clients, or the clients went, because the good people had left. It’s a very subtle balance and it’s very difficult. Going through it, it explains to you how difficult it is.

Why does the unitary structure works for S4, but is really difficult for the holding companies?

You’ve got to remember that it’s different because we started with a clean sheet of paper; we started with a very distinct philosophy. Those four principles are very distinct. Let’s look at the other side of it. What they say is, we’re not going to do any traditional. It says, when we talk to merger candidates, what we say to them is, look, if you want to sell your business, we’re not interested; do you want to buy in. Everything we have done has been half shares, half cash and, therefore, people are, effectively, cashing in part of their asset and they’re rolling their equity, into ours. They have to have faith in our mission and in our determination.

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