Martin Sorrell Promises New Venture Won’t Rival WPP, Sparking Uncertainty

Industry remains unsure what to expect from S4

Sorrell abruptly left WPP in April. Getty Images
Headshot of Lindsay Rittenhouse

Yes, Martin Sorrell looks like he’s returning to the ad industry.

No, it doesn’t look like he’s doing it to compete with his former company—at least not directly.

Following an earlier Reuters report, a source confirmed to Adweek that Sorrell did recently tell WPP shareholders he is not planning to build up his new venture, S4 Capital, in an effort to potentially threaten the world’s largest agency holding company.

Sorrell abruptly stepped down in April from the company he took over more than 33 years ago. The specific reasons behind his departure remain unclear.

So, what should the advertising industry expect from Sorrell?

While it may be too early to say, some ad experts are unsurprisingly willing to speculate.

“While he might avoid any direct WPP assets, there’s a plethora of minority relationships from Vice to ComScore to Globate and AppNexus that WPP might well be looking to divest,” Greg Paull, principal at international consultancy R3, told Adweek.

Paull added that S4’s investment strategy will “definitely” target “future-fit data partners on the ground up, as opposed to 100-year-old ad agencies.” Sorrell grew WPP into the global conglomerate it is today by first investing in Wire and Plastics Products in 1985 and then initiating a series of hostile takeovers of traditional agencies. The initial two were J. Walter Thompson and Ogilvy & Mather.

This time around, Paull said he envisions Sorrell eyeing data-driven and tech marketing entities like Zeta and Ansira.

According to Reuters, Sorrell, who did not sign a noncompete clause with WPP and is still the company’s eighth largest shareholder, has talked to at least two of its investors to reassure them he has the best interests of all parties in mind. The business mogul said he would not create any sort of “waterfront-type competitor to WPP,” said Alastair Gunn, a fund manager at WPP’s 15 largest shareholder, Jupiter Asset Management, speaking to Reuters.

Representatives for Sorrell and Jupiter Asset Management did not return requests for comment, and WPP declined to comment.

The report comes on the heels of last week’s announcement from the board of Derriston Capital, a publicly traded London firm that specializes in acquiring the makers of medical technologies, that confirmed a pending “reverse takeover” whereby it will be folded into S4. At the time, Sorrell hinted at S4’s plans, saying that it would be focused on growth (not unlike WPP) by looking at “significant opportunities for development in technology, data and content.”

“The industry’s a big place,” Brian Wieser, senior analyst at Pivotal Research, told Adweek. “WPP has approximately something under 20 percent of market share; that leaves 80 percent [up for grabs].”

Wieser predicted Sorrell will focus on acquiring agencies with “next-generation creative models.” That strategy could indirectly hurt WPP’s Grey and Y&R, for example, at a time when an increasing number of brands are leaning on consultancies and data-driven agencies to solve their problems rather than hiring traditional creative shops. But Wieser noted that they “face a whole bunch of issues, whether Martin is out there or not.”

When Sorrell was appointed chairman of Derriston last week after buying a three-quarters ownership of the company, experts hypothesized that he was gearing up to build another conglomerate via acquisitions, similar to WPP. It remains to be seen what specific assets Sorrell is interested in acquiring.

Putting aside the fact that Sorrell is an investor in WPP and therefore wouldn’t benefit from directly competing with it, on a “practical level,” Wieser said, there would have been “no point” in investing in traditional creative agencies, given their declining status.


@kitten_mouse lindsay.rittenhouse@adweek.com Lindsay Rittenhouse is a staff writer at Adweek, where she specializes in covering the world of agencies and their clients.