Sorrell: Media Agencies Have Become All “Brawn” And No “Brains”

Sorrell: Media Agencies Have Become All “Brawn” And No “Brains”
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Sir Martin Sorrell has poured cold water on speculation that his new venture, S4 Capital, was out to procure a traditional media agency.

In an interview with the tech website Digiday, Sorrell scotched rumours that S4 was eyeing media on its ever growing list of takeover targets.

“No,” Sorrell declared when asked the question.

He then added: “There’s no growth [in the traditional media agency model] because of the procurement pressure. It’s a space where brawn rather than brains is going to win.’

And, yes, what that exactly means is open to interpretation.

However, he did reconfirm S4’s commitment to data and acquiring a first-party data agency.

“There are a fair amount of first-party data companies around,” Sorrell said before adding, “They’re usually pretty expensive.”

“Merkle, which was acquired by Dentsu, is a good example of what we’re aiming for. There are conflicting views in the market around first-party data as evidenced by moves made by Publicis and IPG to acquire Denstu and Acxiom, respectively, in recent years versus WPP’s efforts to get out of the data business, albeit not completely.”

The 74-year-old added that clients now wanted to “control first-party data” because “speed is a competitive advantage now”.

He then added: “Regardless, Google, Facebook and Amazon dominate the $US200 billion ad market with $125 billion, a $52 billion and $12 billion, respectively, last year.

“We’ll have to see what happens when it comes to how those companies are regulated but either way, we’re anxious to operate with those big five plus Apple and Microsoft as well as Oracle, Adobe Salesforce, IBM and SAP. If you include Baidu in that group then there are 13 companies which are a key part of the ecosystem for us,” he said.

 

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