S4 Capital is the new marketing umbrella launched by Sir Martin Sorrell in 2018 following his shock resignation from WPP in April 2018. Unburdened by any no-compete restrictions, Sorrell was quick to plunge himself back into the fray. In the space of less than three months, he acquired control of publicly quoted shell company Derriston Capital, rebranded it as S4 Capital and completed his first acquisition: creative production network MediaMonks, apparently from under the nose of WPP itself. Unlike the WPP model, Sorrell is planning to develop his new group as a single integrated entity rather than a collection of separate companies. MediaMonks was not so much acquired by S4 Capital as merged into the umbrella group, with its principals joining the S4 board as directors. That company had revenues of approx €110m in 2018 and operates through 11 offices in 10 countries. Though it does develop some traditional advertising, it's best-known as a developer of digital content including VR and AR apps, and digital-enhanced experiences. It provides a solid platform for what Sorrell envisions will be a group offering "new era new media solutions embracing data, content and technology". A second major deal was confirmed in Dec 2018: programmatic media platform developer MightyHive, snapped up for $150m. Several other smaller purchases have followed, including Dutch production studio Caramel Pictures and Australian marketing technologists BizTech, specialists in Adobe Marketing Cloud. The group now divides its operations into two separate marketing practices of content and programmatic. For its first full year of operations, S4 Capital reported revenues of £215.1m, an increase of 41% on a like-for-like basis, but a net loss of £10.0m as a result of acquisition expenses and impairments.
Capsule checked 3rd December 2018
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Recent stories from Adbrands Update:
Adbrands Daily Update 9th Sep 2020: BMW is to consolidate its advertising across Europe for both the main BMW brand and Mini with Serviceplan, already its partner in several markets including Germany, and S4 Capital's Mediamonks production network. They will be supported by consulting agency Berylls under the shared banner of "The Engine". That partnership will replace third-party agencies in all other markets - for example FCB in several countries including the UK and Russia, SCPF in Spain and 180 Kingsday and TBWA in Netherlands, Belgium and other markets. It's not yet clear where this leaves Anomaly Berlin, which was awarded the global account for Mini earlier this year.
Adbrands Daily Update 8th Jan 2020: S4 Capital expanded its presence in Mexico and planted a flag in Spain for the first time with the acquisition (or merger, as Martin Sorrell likes to call it) of digital agency Circus. The new addition joins the group's content practice led by MediaMonks.
Adbrands Daily Update 21st Nov 2019: The latest addition to the S4 Capital family is content creation and production company WhiteBalance, based in Delhi in India. The new acquisition builds upon MediaMonks' existing foothold in the city of Bangalore. "India is a country very close to my heart," said Sir Martin Sorrell, "one built on a heritage of creativity, and characterised by a vibrant culture. As you can imagine, I'm delighted to continue to expand into this fast-growing market, offering a wealth of talent and significant growth opportunities, and the merger with WhiteBalance is the next step for us to build a leading creative content business here. At the same time we're strengthening our position in the APAC region – ever more important – as India continues its trajectory to become the most populous country on earth."
Adbrands Daily Update 4th Nov 2019: S4 Capital is still small, but has evolved, in Martin Sorrell's words, from a peanut to a pumpkin in the space of a year. Revenues for Q3 were £56.6m, lifting the year-to-date figure to £144.6m. Content from MediaMonks and other creative studios accounted for just over 70% of the total, and programmatic media for the rest. By the end of the current quarter - in which several further acquisitions have been made - the group will be around the same size as M&C Saatchi or Engine by annual revenues.
Adbrands Daily Update 8th Oct 2019: Another month, another addition to S4 Capital's portfolio. Like its predecessors, Silicon Valley digital agency Firewood is a comparatively low-priced bolt-on at $150m, or almost three times last year's revenues. Like its predecessors too it has merged with the main operating business MediaMonks under a single global P&L. However it lifts the company's payroll to more than 1,800 employees spread across 23 countries. The two biggest divisions are in MediaMonks' home city of Amsterdam and now also in Silicon Valley. Together those two locations will now accommodate more than half the group's staff. An S4 statement said "This is another important strategic step towards delivering a purely digital, first party data-driven, faster, better and cheaper content and programmatic offer for clients worldwide."
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