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Sorrell's S4 Capital sets up APAC HQ in Singapore
ADVERTISING bigwig Sir Martin Sorrell's latest gig, the up-and-coming purely digital S4 Capital, opened its Asia-Pacific headquarters in Singapore on Friday that promises to ratchet up competition in the region's digital ad and media space amid a race to own first-party data - a much vaunted asset among marketers.
"One institutional investor described S4 as a bit like WPP without the baggage. It's a reasonable way of putting it...," said the British businessman who just about a year ago exited WPP, a company he founded and built over 33 years into the world's largest advertising and public relations agency.
"Singapore is the archetype... or prototype of what we will be rolling out around the world. We have a unitary P&L (profit and loss) approach which is embodied here (Singapore) - the first office where we are physically bringing together MediaMonks and MightyHive," said S4 Capital executive chairman Mr Sorrell in an interview with The Business Times.
Within weeks of stepping down from WPP last year amid an investigation into misconduct, Mr Sorrell launched S4 in May 2018, and wasted no time snapping up its first asset, MediaMonks,a Dutch digital agency and shortly after, San Francisco-based MightyHive - a programmatic media planning and buying business.
He said clients' interest and engagement with the group's first party data model that is driving its content creation and programmatic media planning and buying have escalated this year.
On Friday, London-listed S4 Capital reported that gross profit rose 37 per cent to £33 million (S$58.5 million) for the three months to March 2019 while revenue was up over 38 per cent to £41 million from a year ago. MediaMonks contributed two thirds of gross profit with the remaining lobbed by MightyHive.
Geographically, 65 per cent of S4 Capital's total revenue stemmed from the Americas while EMEA (Europe, Middle East and Africa) and the Asia-Pacific accounted for 27 per cent and 7 per cent respectively. "New business activity is frenetic and the pipeline is still at twice the level of last year," said Mr Sorrell.
Some of the big jobs that the "new-era" ad and marketing services firm snagged over the first quarter were with Procter & Gamble's Braun, Nestlé's Starbucks Coffee at Home and the creation of content studios with Avon and Shiseido.
"Within six to eight months, we have built what is now a US$700 million company (to be exact, market value is around £550 million or US$720 million). We are making ripples... still small but have progressed from a peanut to a coco de mer (double coconut). We are seven tenths of a unicorn," he added.
S4 Capital's APAC chief executive Michel de Rijk said: "If you think about the company that we are... a small company and what level of brands we are talking to, it's hard to imagine. Essentially, we are marrying a "rolodex" that Mr Sorrell has built over three decades and the experience to our "super-flexible" new business to help clients and brands. There is an existing relationship but we still have to deliver."
S4 Capital now employs 1,200 people in 18 countries, the two most recent market additions being Paris and Milan.
Mr Sorrell, who at WPP was known for his dealmaking and acquisition sprees, said S4 Capital would probably set up shop in Germany, Spain, South Korea and "one more" which "will be it for the moment".
He said: "With technology, there is no need to be everywhere. And being everywhere brings its own problems as WPP attests to - it has become too far flung and spread out and needs to focus again."