Sir Martin Sorrell, executive chairman, S4 Capital, is in India this week to announce the merger with White Balance and MightyHive's first office in the country.
Speaking with Campaign India on the sidelines of a press meet in Mumbai, Sorrell explained why S4 Capital is looking to target the smaller base of the advertising pie.
“The larger agencies are weighed down by their traditional activities. The advantage we have and the good news for us is that we started with a clean sheet of paper 12 months ago. If you take India as an example - we can fashion the model or the approach to where we think the growth is," said Sorrell.
He added, "We are going to focus on digital because the growth is 30-35 per cent in India. We are going to focus our model on first finding data, then having the digital content and then using programmatic. Clients want to do personalisation at scale and digital allows that. We want to be more effective. We think clients want faster, better, cheaper. You need to have agility and knowledge of the digital ecosystem for that,” said Sorrell.
He added, “We're seeing digital only brands develop worldwide. Heineken's Desperados is one example. It’s nearly a USD one billion brand and is the fastest growing under the company. The attraction with digital is that you can target and monitor the results. Measurement is not easy but it's easier on digital than it is on analogue.”
Closer to home even though brands like Xiaomi and OnePlus, which entered the market with a digital first mindset, have moved to traditional advertising, Sorrell states that S4 Capital won’t get caught in the ‘traditional’ trap.
The former CEO of WPP said, “I want to focus us on the digital piece. If you take Google as an example - they're one of the biggest advertisers in the world. They have hardware and software to sell. They split their budget 50:50 between digital and traditional. So it is a balance. But I don't want to get caught in that trap. I want to focus on where there is a smaller base and smaller growth.”
He also had a word of caution for his former company. “In India, if WPP has a 50 per cent share in the market, there's a 50 per cent chance that we'll be talking to their clients, as we were yesterday and today!”
Sorrell also spoke about how the Asian markets have a few agencies dominating the advertising landscape and stated that others may find it difficult.
"Every market has a couple of players doing well. For example, in South Korea there's Cheil and LG Ads. In Japan there's Dentsu and Hakuhodo. They’re doing brilliantly in Japan as we’ve seen with sponsorships for Tokyo 2020, which have crossed USD 3 billion. In India, the ones that I hear about, on the basis of the last 24 hours (in India), on the creative side it is Ogilvy. On the media side there's GroupM and Dentsu," said Sorrell.
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The report also suggested that HD channel viewership increased by 15% in the last two years