Sir Martin Sorrell has echoed similar concerns about the state of the world economy and the negative impact it could have on ad spends before adding, “The more disruption there is, probably the better it is for us.”
The former WPP supremo and now S4 Capital CEO has told industry site The Drum that political instability in Europe and South America could have adverse effects on not only S4’s fortunes but the advertising industry in general over the coming 12 months.
“I think 2019 is going to be a bumpy year,” he said “There’s going to be a lot of ups and downs probably driven by these social issues and that’s going to create even more disruption, which from our point of view as a challenger – a new boy on the block – gives us more opportunity.
“The more disruption there is, probably the better it is for us,” Sorell said.
Coincidentally, Sorrell’s comments mirror a similar article on B&T today surrounding the fortunes of Publicis Groupe who have downgraded its profit forecasts for 2019 following a sharp drop in spending by American FMCG clients.
In a statement, Publicis said: “We have begun 2019 with optimism even though we expect a bumpy ride in the first quarter due to the prolonged effects in the first months of the year of the FMCG client attrition of Q4 2018.”
On Monday, MediaCom’s worldwide chairman and CEO, Stephen Allen, told B&T that global challenges aside – Trump, Brexit and a US-China trade war – he expected moderate growth over the coming year.
“Spends will go up in 2019,” Allan said. “China is still growing; the US economy is okay and we’ve seen domestically in the US growth over 2018. And we will see more of that over the coming year. Over in Europe, the economy did well in 2018 and, Brexit aside, that does provide an uncertainty. I foresee modest growth overall.”
Despite the pessimism, Sorrell predicted S4 would enjoy 50 per cent year-on-year growth by targeting the places with some of the most instability – South America and Europe.
Sorrell told The Drum that S4 was still looking acquire businesses if “cashflow remained strong” and he believed that would come from having “broader and deeper” relations with existing clients.
“We have to build bigger relationships,” he said. “We have a client list to die for, but we’re not as broad and as deep as we should be with each of those clients. We have to broaden them and deepen them, and we have to convert the leads that we’ve got, which we’re doing very well.”