Clearly buoyed by S4’s first-ever profit announced last week, Sir Martin Sorrell is back bigging up adland’s fortunes, predicting a “full throated recovery” in the first half of 2021.
Speaking to US media tech site Barron’s, Sorrell said he expected to see digital ad spends significantly increase in the last two quarters of 2020.
The global economy generally would significantly rebound in the first half of 2021, Sorrell said; although that was largely dependant on a coronavirus vaccine being found.
According to Barron’s, Sorrell’s predictions of a quick and large bounce were based on data from Goldman Sachs that showed the US economy would grow a whopping 6.2 per cent in 2021. Some 70 per cent of S4’s clients are based in the US.
In the first half of 2020, S4 booked clients that included Paypal, Verizon, Shopify and the LA 2028 Olympics. It has also just announced that Google will be joining its roster, too.
Sorrell believed that tech, healthcare, financial and FMCG clients would be the biggest spending categories moving forward.
Another reason for Sorrell’s rosy outlook was the stimulus packages announced by many governments in the wake of the pandemic.
Sorrell noted: “The fiscal and monetary stimulus has been huge, and much quicker and sharper than in the global financial crisis,” he said, in large part because the pandemic is “so unfair and affected everybody”.
The S4 boss was once again particularly optimistic about digital’s fortunes, saying CV-19 had forced many businesses to accelerate digital transformation.
“We’ve noticed that change agents within companies are driving an acceleration of adoption,” he said.
He noted that half of all ad dollars spent on advertising now went to digital and predicted that would rise to two-thirds of all spends by 2025.
Announcing last week’s S4 numbers, Sorrell said: “The tragedy of covid-19 has only accelerated the speed of digital transformation and disruption at consumer, media and enterprise levels.
“These results confirm that S4Capital is currently in a growth sweetspot and that its digital only, faster, better, cheaper, unitary, ‘holy trinity’ model, which combines first party data with digital content, data and digital media, is migrating from brand awareness and trial to conversion at scale,” he said.
Back in June, Sorrell told B&T’s Cannes Uncanned that “digital is where you need to be”.
“Agencies that understand digital realise where the growth is,” he said. “In 2019, the media business was worth about globally about $US600 billion and $US245 of that was in digital. Traditional media will be down about 20 per cent.
“We have four principals [at S4]. One, be purely digital. Secondly, focus on data that drives advertising and programmatic. The third is to be faster, better, cheaper. Lastly, we have a unitary structure; we’re not doing fragmented earn-outs that splinter the company. We’re looking for people who buy into our mission which is a new age, new era advertising, marketing and services company,” he said.