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. 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 have been absorbed into one of the two original purchases to form two distinct divisions of content (centred around MediaMonks) and data & digital media (around MightyHive). The purchases have widened the group's footprint considerably. By early 2021, S4C employed some 4.400 staff in 31 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 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."
Adbrands Daily Update 25th Mar 2021: "Outstandingly successful" is how Sir Martin Sorrell described the second full financial year completed by his S4 Capital organisation. Full year revenues were £324.7m, but a steep tax charge resulted in a net loss of £3.9m. Pretax profit was £3.1m. The group claimed an increase in like-for-like revenues of 15%, well ahead of any of the traditional marketing groups. In terms of size, S4 is now one of the Top 25 marketing services groups by revenues.
Adbrands Daily Update 11th Jan 2021: A new week, a new deal for S4 Capital. Sir Martin Sorrell's fast-expanding start-up will more than double its size in China though a merger with Shanghai's Tomorrow creative agency. Tomorrow founder Rogier Bikker becomes managing director of the enlarged entity. "I've always been a raging bull on China's economy, its consumers and its brands," said Sorrell. "I'm delighted to welcome Rogier and his colleagues at Tomorrow to the S4 Capital family, in what is a priority market for us and one of several more moves in what will become the largest economy in the world."
Adbrands Daily Update 4th Jan 2021: S4 Capital jumped into 2021 with two new "mergers", as it prefers to describe its acquisitions. The latest additions are New York's Decoded Advertising, which joins the MediaMonks creative content division, and San Francisco's Metric Theory, which will become part of S4's Mighty Hive programmatic business. Along with other new hires, the latest purchases increase S4's headcount to 3,400 employees.
Adbrands Daily Update 24th Nov 2020: S4 Capital's MediaMonks division secured another "whopper" assignment with the capture of content production across the entire Mondelez portfolio for North America, Latin America and the Asia-Middle East-Africa region, as well as global tech infrastructure and website development. Earlier this month, in its 3Q announcement, S4 had flagged up that a new major win was in the process of being finalised. It will share some of the spoils with a newly created Publicis Groupe entity Team Pop, which was given responsibility for content production in Europe. MediaMonks and Publicis competed for the brief against Accenture and WPP.
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