Having spent over $400 million on Silicon Valley-based ad firms MightyHive and Firewood in the past 12 months, Sir Martin Sorrell clearly has an affinity for the tech hotspot.
Since forming S4 Capital last year with the motto ‘faster, better, cheaper’, Sorrell has made no secret of his digital focus.
“The U.S. digital media industry is growing at 20 per cent with the advertising industry at-large growing six per cent and traditional advertising down by three per cent,” he told TechCrunch recently.
“So we’re going where the growth is and pushing on an open door, unencumbered by legacy or analog businesses.”
The Firewood acquisition, which will see the US outfit integrated into S4’s MediaMonks division, gives Sorrell ownership of the biggest marketing agency in Silicon Valley.
But if Sorrell wants to truly conquer the Valley, he must first figure out his approach to tech giants Google and Facebook.
Firewood is an important part of this.
Google is a client of the agency, giving Sorrell the opportunity to work directly with the search engine giant.
Additionally, MightyHive is one of the biggest resellers of Google’s ad stack.
“Our objective is to have a close understanding and close relationships with all the big media platforms and software companies because they are key to the system,” Sorrell recently told Digiday.
“The most important platform in the digital world is Google. The digital advertising market is worth $200 billion and Google accounts for $125 billion of it. Facebook is No. 2 with $52 billion, and Amazon is about $12 billion.”
And while the former WPP boss has at times been critical of such platforms, he now takes a more collaborative approach.
“We don’t compete with [these companies],” he said.
“We service them; we work with them. If we’re being crude about it, we’re resellers for each one of them. They don’t want to get into the service business.”
He also believes advertisers now want services that provide expertise on these platforms.
S4 has been described as a ‘butler’, as it serves clients on external platforms, rather than negotiating media prices.
Commenting on the comparison at a conference recently, Sorrell said: “the butler has to be much more flexible as to what he or she is doing”.
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