"Spreadsheet management won't get you anywhere"
He is considered a living legend in the industry: Sir Martin Sorrell built WPP from a small manufacturer into the world’s largest advertising holding company before stepping down as CEO in 2018 (presumably not entirely of his own volition). Now the Brit is making a comeback—and aims to build his next empire with S4 Capital. *Werbewoche* sat down with him for an interview.
Sir Martin Sorrell in conversation with MK Werbewoche editor Johannes Happig (Photo: Werbewoche/zVg)
Advertising Week: Sir Martin, you earned good money with WPP, were knighted and could now rest very comfortably on your laurels. Nevertheless, a few weeks after your time as CEO at WPP came to an end, you founded S4 Capital. So your workload is likely to remain enormous. Honestly, why are you doing this to yourself?
Sir Martin Sorrell: Well, first of all, I don't believe in doing nothing. It's just not a principle that makes sense to me. I've seen many people retire and then start to decline both physically and mentally. I didn't want that. My children did say after I left WPP: "Dad, take the summer off and go on vacation!" - but I just thought summer was a good time to start a new business. Because that's when the competition's employees are on the beach. On the other hand, I firmly believe that now is the right time for a business model like that of S4 Capital. We are creating a purely digital offering for advertising and marketing services - faster, better and cheaper than what is already available on the market. The big companies, the advertising holding companies, are having massive problems. But they are not doing anything about it, they are trying to hide it. They are merging divisions, doing what I call "spreadsheet management": someone somewhere is sitting in their office and drawing on a piece of paper where they could cut, eliminate or rationalize in the company. That's not change, that's destruction. These companies don't achieve anything with that and it will show. If you keep lowering the bar for long enough, you will eventually get stuck under it. These huge companies should actually be broken up and I think that could well happen. If we want to use a metaphor: Torpedoes will be more important than aircraft carriers when it comes to the future. And S4 Capital is a torpedo.
So you see enormous upheavals in the advertising industry - and beyond?
Marketing and advertising industries are branches of the economy and the economy always depends on political developments. We see a looming conflict between the G2, i.e. China and the USA, the outcome of which is completely uncertain. We see Brexit, Italy with Salvini and the Five Star Movement, or the Netherlands, or Germany on the brink of recession. The reasons why people feel insecure and dissatisfied are increasing rather than decreasing. So my answer to your question is: yes, everything really is in upheaval. But that can also bring unexpected opportunities.
Crisis as an opportunity? Can you go into detail about this?
After the 2008 financial crisis, marketing departments began to operate under extreme cost pressure. The "zero-based" budget models became increasingly popular, even if they have since been discredited. Marketeers were therefore working with less budget and were also confronted with "walled gardens", i.e. the fact that certain online giants do not make their users' data accessible. There was pressure to get creative and find other ways to track and evaluate user behavior. What do you do then? First, you look at what data customers disclose when shopping in brick-and-mortar stores, then you compare this with data that customers leave behind online - Nespresso, for example, has a model that combines online and offline retail very well. Finally, all available data sets are brought together in order to adapt the content that is displayed as advertising to the needs of the customers. Optimizing and automating this process is a major challenge. But it makes sense and is necessary, because even very successful companies are now extremely concerned about their future.
When we talk about automation, we always think of artificial intelligence. Both in the delivery of campaigns and in their creation. What do you think about this mega trend?
I believe in the potential of artificial intelligence. The CMO of J.P. Morgan recently said publicly that such tools already provide some services better than the agency that was previously used for them. But - is that really a problem? The old creative geniuses in our industry sit in their vineyards in the south of France and moan that AI is destroying creativity. That's nonsense. AI and data, used correctly, underpin creativity with substance and enhance it.
These are just a few excerpts from the interview with Martin Sorrell. You can read more details about his new company, the US president, Boris Johnson and his view of Switzerland in the cover story of Advertising Week 9/19 - in your letterbox on September 3.
Sir Martin Sorrell in conversation with MK Werbewoche editor Johannes Hapig (Photo: Werbewoche/zVg)
Advertising Week: Sir Martin, you earned good money with WPP, were knighted and could now rest very comfortably on your laurels. Nevertheless, a few weeks after your time as CEO at WPP came to an end, you founded S4 Capital. So your workload is likely to remain enormous. Honestly, why are you doing this to yourself?
Sir Martin Sorrell: Well, first of all, I don't believe in doing nothing. It's just not a principle that makes sense to me. I've seen many people retire and then start to decline both physically and mentally. I didn't want that. My children did say after I left WPP: "Dad, take the summer off and go on vacation!" - but I just thought summer was a good time to start a new business. Because that's when the competition's employees are on the beach. On the other hand, I firmly believe that now is the right time for a business model like that of S4 Capital. We are creating a purely digital offering for advertising and marketing services - faster, better and cheaper than what is already available on the market. The big companies, the advertising holding companies, are having massive problems. But they are not doing anything about it, they are trying to hide it. They are merging divisions, doing what I call "spreadsheet management": someone somewhere is sitting in their office and drawing on a piece of paper where they could cut, eliminate or rationalize in the company. That's not change, that's destruction. These companies don't achieve anything with that and it will show. If you keep lowering the bar for long enough, you will eventually get stuck under it. These huge companies should actually be broken up and I think that could well happen. If we want to use a metaphor: Torpedoes will be more important than aircraft carriers when it comes to the future. And S4 Capital is a torpedo.
So you see enormous upheavals in the advertising industry - and beyond?
Marketing and advertising industries are branches of the economy and the economy always depends on political developments. We see a looming conflict between the G2, i.e. China and the USA, the outcome of which is completely uncertain. We see Brexit, Italy with Salvini and the Five Star Movement, or the Netherlands, or Germany on the brink of recession. The reasons why people feel insecure and dissatisfied are increasing rather than decreasing. So my answer to your question is: yes, everything really is in upheaval. But that can also bring unexpected opportunities.
Crisis as an opportunity? Can you go into detail about this?
After the 2008 financial crisis, marketing departments began to operate under extreme cost pressure. The "zero-based" budget models became increasingly popular, even if they have since been discredited. Marketeers were therefore working with less budget and were also confronted with "walled gardens", i.e. the fact that certain online giants do not make their users' data accessible. There was pressure to get creative and find other ways to track and evaluate user behavior. What do you do then? First, you look at what data customers disclose when shopping in brick-and-mortar stores, then you compare this with data that customers leave behind online - Nespresso, for example, has a model that combines online and offline retail very well. Finally, all available data sets are brought together in order to adapt the content that is displayed as advertising to the needs of the customers. Optimizing and automating this process is a major challenge. But it makes sense and is necessary, because even very successful companies are now extremely concerned about their future.
When we talk about automation, we always think of artificial intelligence. Both in the delivery of campaigns and in their creation. What do you think about this mega trend?
I believe in the potential of artificial intelligence. The CMO of J.P. Morgan recently said publicly that such tools already provide some services better than the agency that was previously used for them. But - is that really a problem? The old creative geniuses in our industry sit in their vineyards in the south of France and moan that AI is destroying creativity. That's nonsense. AI and data, used correctly, underpin creativity with substance and enhance it.
