Digital transformation will continue to accelerate over the next two years and beyond, according to Sir Martin Sorrell, executive chairman of pure-play digital advertising grouip S4 Capital.
And this makes him optimistic about his company and its prospects. He was speaking during the release of March quarter results, posting 40% like-for-like revenue growth.
He says new business activity is "frenetic" and the pipeline is above the level at this time last year, with considerable current pitch and land and expand opportunities.
In the first quarter, the group’s "land and expand" and pitch strategy resulted in significant new work from ith many larger clients such as Alphabet, Meta, HP, Netflix, Amazon, PayPal and Netflix.
Business wins in the quarter include assignments from Brewdog, Tiktok, Diageo, Booking.com, Tim Horton’s, Commonwealth Bank Australia, Beam Suntory, Golden Goose and the US media account of a large FMCG which will become a leading account in 2023.
"Clients continue to be focused on taking back control of their marketing functions, which favours our in-house, embedded or even outsourced capabilities," Sir Martin said.
"In addition, the privacy decisions by both Google and Apple and the resultant crumbling of third party cookies have all played to the strengths of our global data and analytics network and stressed the fundamental importance of first party data and the walled gardens.
"Our new technology services practice caters to the growing and persistent demand for digital marketing transformation.
"Agility continues to be the key corporate attribute and our go-to-market mantra faster, better, cheaper or speed, quality, value is resonating increasingly with our current clients and potential ones.
"The pandemic has accelerated digital transformation. Despite the softening of global GDP growth because of the withdrawal of the COVID stimulus, significant inflation, increasing interest rates, the war in Ukraine and China’s continued zero-COVID lockdowns, the secular trend to digital marketing continues to provide strong tailwinds."
S4 Capital has five objectives for 2022.
Sir Martin:
- "To achieve greater client conversion at scale and achieve our 20 (whoppers or major clients) objective as rapidly as possible. Already in 2022 we have now secured 2 more 'whoppers' (major clients) making a total of 8 in place for 2023 and nineteen further remain identified with revenue levels of $5 million-15 million.
- "Integrate our three practices even more effectively. The launch of our unitary brand last year and the unification of our offices city by city are further strengthening our one p&l model.
- "Strengthen our diversity, equity and inclusion and climate change achievements. This year’s extensions of both our S4 Fellowship programme and S4Women Leadership program, along with our progress towards net zero by 2024 are indicators of our progress.
- "Continue to broaden and deepen our service capability through further combinations. Already this year we have added 4Mile to our Data&digital media practice and TheoremOne to our Technology services practice.
- "Ensure that we never experience an unacceptable delays in our results again. We are strengthening our Company financial control, treasury and legal, risk and governance functions, with internal audit enhancements to come and at the Content practice level strengthened control, pricing and IFRS15 functions. We will be adding a new Non-Executive Chairman to the Audit Committee shortly too."
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