While the large advertising groups suffer the ravages of the coronavirus, the marketing company created by Martin Sorrell, S4Capital, comes out of the pandemic well. Pending the publication of the firm’s annual results, the former CEO and founder of the WPP holding company announced that his business has accelerated considerably.
“In March and April of last year we were very concerned about COVID-19, we were budgeting 30% for equal to equal revenue growth, and the market expects us to do it between 15% and 20%. On March 18 they are going to see where we end up, clearly in the extreme north of that (….) I shouldn’t say this because obviously COVID-19 has been a disaster in most aspects, but our business has accelerated ”, Sorrell said during his participation in Advertising Week Latam 2021.
In their annual financial reports, global marketing and advertising holding companies have reported declines, as their clients’ investments decreased in response to the health crisis: WPP dropped 9.3% in revenue during 2020, OmniconGroup’s turnover contracted 11.9 % and Publicis Group sales were down 6.3% last year.
On the other side of the coin, the founder and CEO of S4Capital explained that the growth of his company was mainly due to the fact that in April its content business – which generates 75% of the group’s income – took a turn towards animation, robotic production and live conversation of online events. “We develop three sources of income very quickly,” he said.
In addition, the digital and data analysis areas became especially relevant at the end of the year and has continued into 2021. In the second and third quarters they were the most affected, with content growing the fastest during the first half of the year.
Martin Sorrell added that the company did not have a month of losses and that even their worst (April) had a 3% increase in revenue. “That was the bottom line and then we accelerated month by month,” he said.
Buy and merge, the key
One of the growth strategies that has characterized S4Capital and its founder is mergers and acquisitions.
Barely four days into 2021 had passed and the marketing and advertising firm had already completed its first transactions of the year: the creative agency Decoded Advertising would join MediaMonks (the global content firm that Sorrell acquired in 2018) and the marketing company of results Metric Theory would be part of MightyHive (programmatic company that joined the group in 2019).
This growth strategy also includes Latin America. Since its founding in May 2018, Martin Sorrell has been in charge of demonstrating his interest in growing the business and positioning it in the region. His first transaction was in Brazil. Local consulting firm ProgMedia arrived in the S4Capital portfolio in April 2019.
The second movement was in Mexico, in January 2020, when it announced the acquisition of the digital agency Circus founded by Bruno Lambertini. With this purchase, the marketing company also entered Argentina, Colombia, Costa Rica and Spain, nations where the Mexican firm already had operations.
“Bruno and his colleagues share our vision to focus on purely digital content, free from the analog baggage. Circus uses our data driven model and is moving into the unitary format that blends seamlessly with our content practices, “Sorrell said at the time.
For the manager, Latin America is a region with great potential. During his participation in Advertising Week 2021, he assured that it is underestimated, as its inhabitants have shown to have the technological prowess necessary to create large companies.
“We in the United Kingdom or New York believe that we are the whole and not. I want to say that the creative quality of many Latin American countries is excellent, I would say that places like Mexico City, Sao Paulo and Buenos Aires are excellent in terms of technological and creative talent, “he said.
Under this premise, Martin Sorrel will continue to invest in the region where today he has 70% of his business.
