Digital-focussed S4 Capital is not interested in any traditional activity at all, says Sir Martin Sorrell
MUMBAI: Sir Martin Sorrell’s digital advertising and marketing services company S4 Capital is firmly focussed on India. While the country is less digitally developed compared to some of the other global markets, he is enthused about growth possibilities.
As reported earlier, the company has merged its global content practice MediaMonks with Delhi-based content creation and production company, WhiteBalance. Now S4 Capital has launched the India division of MightyHive, a programmatic marketing services agency that was acquired last year. Smita Salgaonkar, who was earlier Omnicom Media Group GM, is MightyHive India country head.
Sorell noted that the company began operations in the country a year ago. He spoke among other things during a media interaction about the four principles that drive S4 Capital. He noted the importance of being agile and having a better understanding of the digital ecosystem.
The first principle is that S4 Capital is pure digital focussed. “We are not interested in any traditional activity at all. India is interesting in that way because it is a less developed digital market. Digital in India is 20% of the market whereas globally it is about 40%. Digital in India is growing by 30-35% but traditional media still dominates.”
The second principle revolves around personalisation of advertising and marketing at scale. The company uses first party data for media planning. “The third principle is I guess a tagline – faster, better, cheaper. This drives traction with clients. Faster is about agility.”
He also spoke about the importance of having a better understanding of the digital ecosystem. So S4Capital works with 14-16 platforms including Google, Amazon, Alibaba, Facebook, Apple, Microsoft. Knowledge quality is key. Cheaper means driving metter efficiencies. The fourth principle is having a unitary structure.
He said that in doing partnerships with companies like WhiteBalance the key that he looks for is not a company that just wants to sell itself. It has to buy into S4 Capital’s trinity of first party data that fuels digital content and programmatic. He noted that S4 Capital is a consultancy, a content programmatic practice. He also stated that it is not a holding company.
While asserting that S4 Capital is not an agency, Sorrel said that the aim is to build a company where content and programmatic work seamlessly. He said that measurement is an issue for clients using digital. There are cases of chief marketing officers (CMOs) who are concerned that platforms like Google and Facebook are both the player and the referee, the judge and the jury. So a third party offering is used. Also tracking the money spent in digital technology is another concern for clients.
In terms of companies adopting a digital first or even a digital only strategy, he gave the examples of Heineken and L’Oreal. He noted that some companies do a digital first strategy generally. The aim of some companies, he said, is to double their digital business. Then there are companies like L’Oreal which gets strong growth from brands that it acquired that are purely digital. In India while declining to mention company names he said that there are those who are looking at digital first and in some cases digital only plans.
But at the same time the challenge globally, he noted, is that there is pressure on short term results for the CEO of a listed company. A CEO’s tenure tends to be only for around five years. So the CEO cannot take the long term view despite the fact that the environment demands change. That is because the short term pressure is so intense.
He also said that while some Indians are upset that the Indian economy is only growing at 5% in the UK people would give their arms and legs to see that growth level. That is because the UK is seeing zero growth. He also said that Germany is seeing negative growth. So Indians should be grateful to be seeing growth.
“The sense that I get is while it is more difficult in India the same is the case for the rest of the world. Things cannot continue to go in a straight line forever. They have to oscillate. The view that I get is that the government has taken measures for instance to reduce the black economy and corruption. In the long term this will build a much more solid base for the economy. All economies at the moment are feeling the pressure mainly due to the China US trade tension. Worldwide GDP has been affected. Nothing surprising. It comes with the territory.”
He also said that Artificial Intelligence has a role to play in helping get better results. But it does not mean that human intelligence is not needed. Both can go hand in hand. He drew a parallel to data which he noted has not destroyed creativity.