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Is S4 Capital’s brave bid to challenge the ad establishment running out of gas?

Even Sir Martin Sorrell isn’t immune to the vicissitudes of age and a tricksy global ad market. The WPP founder and former CEO whose new venture S4 Capital seemed to storm the ad world in 2018, barely a few months after he was defenestrated from WPP, has had a rockier time of late.

Now 78, he’s recovering from surgery – “business as usual – more or less” he says – with a promise to provide a succession plan for S4C, having just navigated a period in which the company’s accounts were delayed and he admitted that it had over-hired in the pursuit of growth. His bonus has been cut (bonuses play a big part in the Sorrell story.)

S4C, now grouped around is main business Media.Monks, is still valued at a heady £843m but once hit the even giddier heights of £2bn or so. It employs thousands of people around the world on its mission “to build a purely digital advertising and marketing services business, which disrupts analogue models by embracing content, data & digital media and technology services in an always-on 24-7 environment, for global, multinational, regional and local clients and for millennial-driven influencer brands.”

One of the difficulties Sorrell faces is that now everyone else is trying to do the same to a greater or lesser degree, including the giant media owners themselves as Google, Facebook and the like enlist AI to take humans out of the equation.

Media.Monks and the big ad holding companies (valued at ten times or more S4C) find themselves as a kind of interface between advertisers and these media giants. You suspect that, in the end, the media giants will win.

Whoever (eventually) takes over S4 Capital will have a job on their hands. The company got off to such a flying start in large part through the backing of well-heeled supporters in the City. They may see a sale as the best way to realise their investment.

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