Been bullish on India for years…

07 Mar,2019

 

Former WPP CEO Sir Martin Sorrell has always been bullish on India. And he continues to be that as Executive Chairman of S4 Capital, which is building a new age, new era, digital advertising and marketing services platform for clients.

Sorrell was CEO of WPP for 33 years, building it from a £1 million “shell” company in 1985 into the world’s largest advertising and marketing services company. Prior to that, Sir Martin was the Group Financial Director of Saatchi & Saatchi Company PLC for 9 years. S4 Capital PLC recently merged with MediaMonks and MightyHive, and is listed at the London Stock Exchange under SFOR.

We had a quick chat with Sir Sorrell on the sidelines of Day 1 of the IAA World Congress (Feb 20)

 

So you’ve been making frequent trips to India in the recent past.

They are no different to normal.

Earlier the normal was different…

But I would say that no dissimilar frequency. I wouldn’t differentiate particularly.

And the million dollar question is—

Only a million?

Well, billion actually, given the acquisitions that you’ve made globally. But are you looking at furthering your business interests with S4 in India?

Organically, quickly and by acquisition as quick as we can… so we’d be doing both in India.

 

Any clues on your wishlist?

No, I’ve got a wishlist but I mean whether in term vision reality is other question and whether what people tell you and what is there is another question as well.

Is old friend Sam Balsara’s Madison still on your radar?

Our operation, you must remember, is focused purely on digital.

 

Right, but when you launched you were looking at digital content, data, media planning and buying?

No, not media planning. First party data and informing digital content and digital media planning which is programmatic.

The traditional media agency doesn’t come under your radar?

Well as defined by that, no.

But at the end of the day it’s all about relationship with clients, right?

Yes, but that’s a very old-fashioned way of looking at the business. I mean I would turn the question around you and ask you, is it? I mean it may well be that faster, better, cheaper is becoming more important. It may be that people are looking at doing things in a more transparent way. It may be the clients felt that they want to take back control of some of these things. So may well be that they are worried about the height of the gardens in, the height of the walls in the old garden.

You say that things are not transparent in the traditional media agency model that you created?

Well I would say that the Indian market tends to be less transparent than other markets.

It’s often said the media agency business is not all that transparent because of what’s happening?

Yes, I think, sometimes there’s been a perception of that and sometimes clients or associations of clients you know have been pushing that line unfairly. Sometimes I don’t know they obviously have come across situations, one hopes given by what they said. They come across situations which they didn’t think were fair. But what I would say you can compare India to other markets, I think there is scope for a more transparent model.

Back to acquisitions. So are these around digital agencies? But there aren’t too many options out there, right?

No they are small.

Small?

Yes because we are at the beginning of the journey. So they are growing bigger.

But no many of them are doing really all that well, right?

That broad, sweeping generalisation is probably unfair. There are some that are doing ok. Yes, the ones I’ve seen are doing ok.

Is there a timeframe for these acquisitions?

We’ve never had a timeframe…

Given that you know you are coming here often enough. You are meeting people.

The cheapest way of doing things is organically.

But time to get to the market is longer?

Yes, it takes longer time.

Have the organic operations started?

Yes, in the process of starting.

Any people you’ve hired already?

Yes.

Could you reveal the name?

No.

You bought Media Monks last July, Mighty Hive in December. What next?

Well we started in Tokyo and Japan. We are going to start shortly in India. So the one other market we’ve identified is Germany. I would like to do something in Germany and may be France, Spain and Italy at some point in time. But I think that geographically for the moment we know that India would be I think our 15th country.

 But the biggest market place is US?

Yes I mean US, by and large US is about a third of worldwide advertising. But don’t undersell India.

Of course.

Yes, we will the most populous country in the world. Bigger than China, may be not the wealthiest on a per capita basis or absolute basis. But it is growing and I got more faith, probably more faith than you that it is going to grow more faster.

And you’ve fairly very close to the Indian market, you know the, clients, you know the business?

I’ve been bullish on India for years.

Since you are so bullish about India, could you give an indicator of what you’d think would India be as part of your foot print in percentage terms?  

It’s impossible to say. I mean it depends, if we get traction from a model. The data-driven content and media model could be very significant. Because the other thing that happens here is, you got lot of BPO, back-office type work being done here and so the nuance to the  Indian operation, it’s not just sort of a front office operation, back office operations as well. And the people are so talented. I mean if you said to me, what is the attraction of India? I would say scale and quality of people. Despite the scale, which usually the bigger you are, the more average you get. Despite the quality of the people here is outstanding. Look at the quality of the WPP people – Srini and his colleagues I mean they are superb, yes superb.

You miss them?

Listen, I always miss talented people. And as I have said pretty much every time I have come here, if we had the same quality of people outside India that we have in India, I could have retired a long time ago.

The retirement question keeps coming up.

Well, I will retire on the job.

Since you are betting so big on digital, people like P&G’s Mark Pritchard have cast aspersions on the transparency in digital?

Our operation includes one significant P&G brand, P&G Braun. Our operation plays exactly to what Mark Pritchard has been saying. The willingness to experiment, try different models, faster better cheaper, unitary structure, focus on digital. It plays exactly to what he wants.

You had mentioned last year, in fact on the day when you announced S4, that you want S4 to be run the way consulting firms work. Given their access to CEO, the Board. Is S4’s operations like them?

Well I’d love S4 to have a relationship. We want the consulting practices   which gave us that sort of fourth dimension. So you’ve got data driving  content and media making for the three dimensions. The fourth one would be that access. Yes, we do have access to the C-Suite. We do. We can get in there, we do get in there but you know, do clients I mean, this would apply to the Big 6, but do clients really takes seriously our ability to digital transformation or digital disruption? I think the honest answer is no.

But the consultants have access to the C-Suite

Having access to the C-Suite and being able to execute is two different things.

They are buying agencies, right?

But they are buying small, they are buying bits of pieces and if you got the 100 billion or 40 billion dollar company buying a two or three million dollar company and buying four of them, compounds the felony four times. You know it’s eight times more difficult to integrate four, two or three million dollar operations or even a 100 million dollar operations.

You were bullish on the way a firm like Accenture was doing. Now you are more critical

I don’t think I was bullish

You had said the advertising industry needs to align like the?

I think I am saying the same thing. They do have that access and I think we have the access as well. But, clients don’t believe that we can put together digital transmission jobs. I mean the claims Publicis, for example, make around digital transformation are unrealistic. If you and I were CEOs of a big business which had a transformation issue or disruption issue in digital and we saw presentations  from Publicis  or from Accenture, I don’t think we would choose Publicis or Deloitte. I don’t think we’d choose Publicis. Likewise I think if we were competing Publicis, we were competing  against Accenture for the implementation of digital marketing job. I don’t think there would be a pro Accenture. So they are all complementary strengths. All I am saying is the way the consultancies can get those complementary strengths is not by tinkering with a dozen small acquisitions. You won’t move the needle.

 

 

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