Monday 24 June 2019 7:11 am

Martin Sorrell labels tech firms ‘frenemies’ as he lays out vision for S4 Capital expansion

Sir Martin Sorrell chats to James Warrington in Cannes about S4 Capital, but can’t resist a dig at WPP

SIR MARTIN is a busy man. So busy, in fact, that the only time he can carve out for an interview is 20 minutes in the back of his car, as his driver whisks him between meetings at luxury hotels on the French Riviera.

But as we set off from Cannes, where Sorrell is holding court at the ad industry’s extravagant annual festival, the 74-year-old ad veteran seems relaxed.

More than a year has passed since Sorrell shocked adland with his abrupt departure from WPP, the wire-basket manufacturer he grew over a 33-year reign into one of the world’s largest advertising firms.

His habit of taking swipes at WPP, and the cloud of misconduct allegations that envelop his departure, mean Sorrell will always be linked to his old firm.

But his main focus now is to promote his new venture S4 Capital, a digital marketing company grounded in the tagline of ‘faster, better, cheaper’.

“It sounds glib and superficial, but it really does resonate,” Sorrell says.

Glib and superficial seem like apt fitting terms for the Cannes Lions conference itself.

This year, it’s the youngest, brashest attendants that have won much of Sorrell’s attention over the week in France.

He has had meetings with all of the tech giants – Facebook, Google and Twitter among them – which now dominate the digital advertising market. But how does he view the boisterous new kings of adland?

“I’ve described them as ‘frenemies’,” he says. “I think they’re friendlier frenemies than they’ve ever been because of the regulatory atmosphere.”

Sorrell is careful to defend his frenemies from the looming threat of tightened regulation, saying they have made “strenuous efforts” to deal with harmful material posted to their platforms.

But, fundamentally, he appears to agree with calls for the tech giants to be treated more like publishing firms.

“I think the basic problem is none of the platforms admit they’re a media company,” he says.

“They must be held responsible, in my view, for the content, and that’s what they’re worried about when they acknowledge they are media companies.”

Moreover, the S4 Capital boss believes social media firms should take a new approach to their branding. Instead of playing down their ballooning market share, they should emphasise their importance for small and medium-sized companies, the so-called long tail of the market.

“What they should be saying, maybe in addition, is ‘we are the engine of small and medium-sized businesses’. That is: the engine of the economy and jobs,” he says.

For Sorrell, the key concern among the middle classes is job security, and the tech firms must prove they can boost the economy, not harm it.

“I think we’re seeing technology destroy jobs,” he admits. “There’s no increase in real wages for 10 years partly because of that.”

It’s a surprising attitude for a man who has pinned his hopes on digital marketing as the key driver of growth in the industry.
S4 Capital, he says, is a firm packed to the brim with digital natives.

“It’s a bit like my baby – she goes up to the screen and swipes it,” he says, referring to his two-year-old daughter Bianca. “These people haven’t done anything else.”

The average age of employees at S4 subsidiary Media Monks is 33 (“and more than half of them are nerds”), while the firm’s Mightyhive division has poached its top young talent from tech giants such as Google, Yahoo and Salesforce.

Despite his apparent reservations about tech, Sorrell wants to present S4 as a modern, agile alternative to cumbersome holding groups, which he dismisses as “not fit for purpose”.

S4 has bagged a number of big-name client wins in its first year, including Starbucks and consumer products giant Braun. Sorrell likes to point out the contrast with the rocky recent record of WPP.

“They lost eight pieces of business in eight days in September; obviously things were not going in the right direction,” he says. “They talk about new business gains, but half the new business gains they quote are saves, not add-ons.”

He admits, however, that rapid growth is easy for a firm he began last year with a clean slate, and S4’s revenue still pales in comparison with the £15.6bn pulled in by WPP last year.

But the outspoken adman still can’t resist a dig at his old firm’s presence on the Cote D’Azur.

“If you’re not strong, coming to Cannes and winning awards or hiring a beach will not get you to where you need to be,” he says.

Given how much Sorrell likes to talk about WPP, you’d be forgiven for thinking he was still hung up on his old firm. Is he hoping he can grow S4 Capital to a size where it could make a takeover bid for WPP?

“You’re talking about a totally hypothetical question,” he says, a tone of annoyance creeping into his voice for the first time. “It’s chalk and cheese.”

The car swings into the expansive driveway of a plush hotel, where security guards in suits watch over blacked-out Mercedes, and it’s clear our Cannes carpool is coming to an end. There is just enough time to ask about the Tory leadership race, which has now reached the final round. Who does Sorrell back between the two contenders left in the contest: former foreign secretary Boris Johnson, or the role’s current occupant Jeremy Hunt?

“I wouldn’t back any of them, it’s up for the Conservative party to choose,” he says, although he admits he enjoyed working with Johnson during his tenure as London mayor.

The Tory frontrunner is often considered to have a blind spot for detail but may be effective if surrounded by good people, Sorrell says diplomatically.

“I think it depends which Boris turns up. I’d rather have the mayoral Boris,” he says.