Free from the supertanker of WPP, Sorrell's new venture can be flexible

Martin Sorrell's new vehicle S4 Capital could take multiple shapes. Despite plenty of challenges we shouldn't bet against its leader, the chief executive of Fold7 writes.

Martin Sorrell launches a new S4 venture from the shell of a listed company, Derriston Capital. As beginnings go, it has a familiar ring – but is Sorrell really out for a repeat performance? 

Where WPP was conceived as a commercial force that could speak the same language as the ‘bean counters’ who paid them, today’s industry demands more from its newcomers (even if they’re veterans).

Agencies are challenged by increased specialisation of function, by fragmentation of services, by management and tech consultancies, next generation media owners, and clients trialling new models of engagement.

All of which is forcing marketing services players to question some of the fundamental assumptions underpinning their operational models.

In this market, S4 will not thrive by following in its predecessor’s footsteps. To be seen as relevant and credible, despite (or perhaps because of) its founder’s pedigree, this venture will need to be born from a fresh vision.

The gas-guzzling Chevrolets, which were once the biggest ad and media agencies in the world, are being forced to reinvent themselves

What is that vision? Of course, nobody knows, even if they think they do, because Sorrell has said very little. What we do know is that Sorrell is interested in technology, data and content businesses. But so too are most of the nascent groups.

We also know that WPP’s historic strength wasn’t just its size, but the way it sought to blend an array of discrete marketing services under one roof, in an attempt to provide clients with an entry point to a more flexible network of solutions than existed previously.

That traditional network agency model pioneered by the likes of WPP is challenged today by start-ups, new groups and even clients who want to unbundle their services to regain control, reduce cost, increase flexibility, or all three.

But this model might be one Sorrell plans to revisit with a blend of next-generation services, providing client access and efficiencies to a pool of desirable new skills and tools.

While the gas-guzzling Chevrolets which were once the biggest ad and media agencies in the world are being forced to reinvent themselves, Sorrell could well be eyeing a network of marketing services which don’t conform to the traditional classifications. If it doesn’t have creative or media at the centre then what? Or will it have a centre of gravity at all?

Sorrell’s next challenge will be to find the right glue to hold his stable together

This will be an easier job for Sorrell now than as part of WPP, of course. Without the encumbrance of a global supertanker Sorrell can be more flexible - he is of course armed with an extensive contact list of clients and talent, backed up with the investor clout of his co-founder Rupert Faure Walker.

Whatever one might say (and people have) about his legacy, he is an astute businessman - arguably the most accomplished of his generation (there is a delicious irony for those who tried to leave WPP during Sorrell’s reign that he himself left without a non-compete agreement in place). All of which suggests it’d be foolish to bet against him. Whether he is capable of reinvention is another matter.

Whatever his targets for acquisition, Sorrell’s next challenge will be to find the right glue to hold his stable together. Anyone with access to funds can acquire companies, but it requires a special vision to create a model of engagement which adds up to more than just the sum of its parts. 

S4 will have had more discussion of its prospects in the hours since its announcement than many businesses receive in their lifetime. As long as Sorrell’s appetite for deal-making remains unsatisfied, and his eye for industry trends remains keen, we may all have a lot more to talk about before long.

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