Now tech client travails hit Sorrell’s S4 Capital

Is Sir Martin Sorrell still one for the hard yards? Or, indeed, the long haul?

That looks like the task at S4 Capital which has just produced disappointing second quarter figures following a number of reverses.

S4 says: “Net revenue in the second quarter was below budget with May and June in particular, reflecting the challenging macroeconomic conditions and clients, especially those in the technology sector, remaining cautious and very focused on the short term.”

Almost an echo of the Interpublic account of its numbers and, like the much larger IPG, S4 has cuts its forecast for the year to 2-4% growth from a bullish 6-10%. S4’s shares have taken a pasting – as have its peers – and Sorrell’s latest creation is now valued at just over £600m.

Content is now reported to be the weakest performer, worrying for S4 as this, via MediaMonks, has always been the driver of its spectacular growth. The company is not nearly so big in media, still mostly the preserve of the traditional ad holding groups.

Most of the ad holding companies, including S4, have bet the ranch of becoming hand maidens to the big tech groups. This is backfiring as they cut back. We’ll lean more this week as the likes of Alphabet (Google) and Meta (Facebook) report.

Publicis, which is performing best, is slightly different as it now has its own, if not walled, then hedged data garden in Sapient and Epsilon.

S4 Capital’s seemingly relentless rise to challenge the giants of adland now looks markedly more challenging. As do some of the decisions facing Sorrell, notably succession.