S4 Capital is the new marketing group launched by Sir Martin Sorrell 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, reportedly from under the nose of WPP itself. Unlike the model of WPP and other traditional marketing groups, Sorrell is developing his new vehicle 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 and shareholders. That company had revenues of approx €110m in 2018 and at the time of acquisition operated 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. A succession of other smaller purchases have followed, including Dutch production studio Caramel Pictures and Australian marketing technologists BizTech, specialists in Adobe Marketing Cloud. These and several more were initially absorbed into one of the two original purchases to form two distinct divisions of content (centred around MediaMonks) and data & digital media (around MightyHive). A change of strategy was announced in August 2021, with the elimination of the MightyHive brand as well as all subidiary company names. All units will now operates under a revamped Media.Monks banner. The purchases widened the group's footprint considerably. By summer 2021, S4C employed almost 6,000 staff in 33 countries worldwide. Unlike WPP and other traditional groups, S4C still works closely with agencies as a non-exclusive sub-contractor as well as directly with clients. It secured what is arguably its first "agency of record" assignment in 2020 with the capture of BMW Group's European advertising, in partnership with Serviceplan. For 2020, S4 Capital reported revenues of £324.7m, an increase of 15% on a like-for-like basis. Net loss was £3.9m, as a result of a steep tax charge.
Capsule checked 23rd October 2020
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Adbrands Daily Update 14th Sep 2021: Rocketing growth continues at S4 Capital, aided by the bounceback in marketing spends and the group's accelerating acquisition drive. Net revenues for 2Q were around £133m, lifting the half year total to £237m. That figure was almost double 1H 2020's figure, and up 56% on a like-for-like basis excluding acquisitions and exchange rate. Sir Martin Sorrell said that S4's growth was more like that of digital platforms like Google or Facebook than of traditional marketing groups. However, S4 continues to report net losses - £21.6m for the half-year - as a result of acquisition payments and accounting adjustments.
Adbrands Daily Update 8th Sep 2021: In another slight shift in direction, S4 Capital acquired what might be considered one of its first traditional US marketing agencies with a deal for US multicultural shop Cashmere. No terms were disclosed, but Cashmere will become part of the unified global Media.Monks collective. The agency is perhaps best known for its work for Jack In The Box and DoorDash, and was recently appointed as culture AOR by Taco Bell. Virtually all S4's previous purchases in the US and Canada have been in the content creation, digital and data segments.
Adbrands Daily Update 3rd Aug 2021: S4 Capital announced a change of strategy with regard to its subsidiary businesses. Instead of operating two divisions of content (as MediaMonks) and data (as MightyHive), all units will now operate under a single shared banner of Media.Monks. The addition of the full stop allows for some further differentiation between individual teams as Media.Monks, Data.Monks or Tech.Monks. S4 Capital remains as the corporate brand.
Adbrands Daily Update 4th May 2021: S4 Capital continues to expand at a spectacular rate, powered by further acquisitions and account gains. Net revenues for the first quarter of 2021 were £104m, up 71% on the year-ago period, and by 33% on a like-for-like basis. The Media Monks content division accounted for more than 70% of net revenues. Recent acquisitions since January include Staud Studios in Germany and Jam3 in Canada, while the Mighty Hive data division added Datalicious Australia and Raccoon Group of Brazil.
Adbrands Daily Update 30th Apr 2021: No doubt encouraged by its stellar results in Q1, WPP announced that it is withholding further payments due to founder Sir Martin Sorrell under his long-term bonus arrangement. It said that these payouts are suspended as a result of Sorrell's "disclosure of confidential information belonging to WPP and certain of its clients to the media during his tenure as a WPP director". This relates to the bitter war of words between Sorrell and WPP following his resignation in 2018. The withheld bonus is thought to be worth around £500,000. Always one for a witty comeback, Sorrell said it's "just another case of peanut envy" - he has previously described his new group S4 Capital as a peanut compared to WPP, but one that has now grown into a coconut. "It's a bit rich that they're accusing me of leaks, given their own over the last three years. They've had to go back several years to try and find an excuse to deny me what's mine. I've left it to my lawyers to deal with. It seems like blind rage is driving them, not peanut or even coconut envy."
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