Martin Sorrell: Flexible working "will be more permanent than you think" |  Advertising

Martin Sorrell: Flexible working “will be more permanent than you think” | Advertising

2021 has been a busy year for MediaMonks.

In addition to completing a new branding that unified the former S4 Capital under the name MediaMonks, the agency has completed a handful of mergers and added new capabilities in technology services, which along with data and content, are an essential pillar of the “three-pronged strategy” for a modern agency.

“Top line growth is strong, margins are good and there is business to be done,” Sorrell said. US Campaign in an interview, scheduled for CES in Las Vegas, which has switched to a virtual video call given the rise of the Omicron variant.

MediaMonks has benefited from its digital-only focus as marketers and agencies accelerate their transformation strategies. Organic revenue increased nearly 50% in the first half of 2021 and 75% from pre-pandemic levels in 2019.

But Sorrell, the founder and former CEO of advertising giant WPP, is not yet done building his new empire. With the potential to reach billionaire status by 2023, he is targeting geographic expansion, new services and a few other “whopper” clients of his Rolodex.

However, some aspects of its approach have changed, notably in its adoption of a more flexible working model.

Company overview

MediaMonks, which debuted on the London Stock Exchange as S4 Capital in 2018, has since quickly expanded its size and geographic footprint. In 2021, the workforce doubled from around 3,500 to 7,500, as the agency expanded in Latin America and Asia through mergers and added around 1,700 employees organically.

More than half (60%) of MediaMonks’ business comes from content production, and Sorrell expects the service to “always dominate.” Data, analytics and digital, which came with the acquisition of MightyHive in 2018, generate 30% of revenue. And technology services, such as systems integration and implementation, account for 10% of the business, but Sorrell wants “to see that get bigger.”

MediaMonks operates in 33 countries but is concentrated in the Americas and Europe and is growing rapidly in Asia, Sorrell said. Sorrell is optimistic about Latin America, where MediaMonks already has more than 2,000 employees.

“The technological and creative talent here is exceptional,” Sorrell said. “We tend to be a bit arrogant in New York and London about our quality. Be careful, because they may have even passed us in some respects. “

Sorrell’s sights, however, are on Asia, where MediaMonks is riding the tailwinds of economic growth in China. It is also looking to expand its business in India and launch hubs in Malaysia and the Philippines.

On mergers and acquisitions, MediaMonks has “a lot of deals going on,” said Sorrell, one of which he will announce this week. But determined to build a unified business unencumbered by the silos plaguing his old business, Sorrell isn’t looking for founders who want to take the cash out.

“When we talk to people, if they want to sell, we’re not interested,” he said. “Our half-stock, half-cash model is for people interested in building something for the future.”

Sorrell believes 2022 will be “another strong year”, both for MediaMonks and the broader business community, as the economy continues to rebound. He predicts, however, that inflation “is less transitory and more permanent than people think.”

Despite the pandemic entering its third year, Sorrell is optimistic “we are getting closer to normalization.”

“I’m pretty optimistic, and you see it in the markets, towards the end,” he said. “That doesn’t mean we won’t have to be continuously vaccinated or boosted.”

2023 will be “when the rubber hits the road” in terms of a slowing economy, he says, allowing customers to continue to focus on digital transformation as they seek efficiencies.

“We don’t like to pitch for companies”

2021 has been a big year for global pitches as customers reassessed their priorities during the pandemic.

Sorrell likens the phenomenon to the ‘big resignation’: “Customers are using the pandemic not as an excuse, but as an opportunity to reassess what they are doing, how they are doing it and where they are doing it,” he says.

Despite the huge global prices to be reviewed this year, MediaMonks prefers not to go into business. “We like the strategy of landing and growing,” Sorrell said, referring to winning a project with a client and growing the business from there.

“We can’t afford to engage with people for a year for a pitching process, and we don’t think it makes sense to engage in procurement spreadsheet exercises,” a- he declared. “It trivialized the business. “

Still, Sorrell is looking for large accounts like the ones he had at WPP. MediaMonks has Google, Mondelez, BMW / Mini, and HP on its list, and has a few other “whoppers,” as Sorrell calls accounts over $ 20 million, on its radar.

“We will compete [in pitches] if we think there is a change agent within the company, ”he said. “We are better able to work with companies that look at the sky rather than their boots. “

While MediaMonks finds itself competing with digital agencies within holding companies (Sorrell mentioned R / GA, AKQA and Huge), Sorrell sees its competition as Accenture Interactive, as well as global digital agencies such as Jellyfish and Dept. He sees technology service companies, such as Thoughtworks, EPAV, Endava, and C&IT, as his true competitive set.

Sorrell is still bitter on the holding company model, despite owning his WPP shares. In 2021, all holding companies posted growth from 2019 levels, but Sorrell maintains that “if they couldn’t bounce back with a $ 16 trillion economic stimulus, they never would.”

“They are still stuck with the fundamental problem: 60 to 70% of their business is in the traditional,” he says. “Buying a Romanian software engineering company is not going to get you out of it. “

WPP, on the other hand, is “still very vertical,” Sorrell said, “They talk about simplifying the business, but all they’ve done is make it more vertical. This makes intra-vertical competition even more acute.

A “troika” of customer needs

Marketers will face a “troika” of needs this year, including agility, control and expertise in data privacy, Sorrell predicts.

“In an inflationary world that is growing at this rate, you need 24/7 agility that is always on,” he said. “You can’t wait three months for an advertisement, or even a month. We have to go faster. “

The need for agility and control leads more and more clients to take on internal services or integrate agency talents into their staff (MediaMonks supports both models).

Privacy is accelerating the dominance of walled gardens, not only of Google and Facebook, but also of retail giants like Walmart and traditional media companies like NBCUniversal.

According to Sorrell’s calculations, Google, Facebook and Amazon are on the verge of absorbing more than half of all digital advertising revenue in 2021. Even Apple, which reached a market cap of $ 3 trillion last week , benefits from its confidentiality restrictions in the form of advertising. income.

“The only one breaking through is TikTok, and that’s important,” Sorrell said. “This year we are seeing massive adoption [of TikTok] by customers.

“Flexibility will be more important”

MediaMonks is not immune to the talent crisis facing the business world.

“There has been ‘power to the people’, or to the employees,” Sorrel said, adding that the churn rate and pressure on wages will be acute problems for agencies in 2022.

“People are much more selective,” he added. “They are courted by more than just finances; they are seduced by the objective of the company, the qualitative elements concerning the conditions, the place of work, the advantages and the installations. “

The needs of employees are not the only ones to have changed. Sorrell himself, a notoriously tough boss, embraces hybrid work and more flexibility.

MediaMonks has reduced its global office footprint to 60% of what it was before the pandemic, on a consistent basis, and is signing more flexible leases. It is redeveloping its offices, such as its space at Hewitt Place in London, with more common areas and private rooms for virtual meetings.

Sorrell, who turns 77 this year, recognizes this softening in his approach.

“Ironically, I find myself arguing with people a lot younger than me who say we need to have people in the office,” he said. “I went to the opposite extreme in a way. We can measure productivity from a distance. Flexibility will become more important.

A former road warrior himself, Sorrell also welcomes a more thoughtful approach to business travel. He and the industry as a whole are reconsidering the need to “spend large amounts of money and time traveling around the world for various conferences”, especially as technology improves and climate issues become. a priority for companies. (MediaMonks is committed to achieving zero net carbon emissions by 2024.)

“Maybe we’ve spent too much time at the events and we should be more selective,” he says, adding that “it will always be necessary to come together and meet a lot of people in a short period of time.”

He added: “This [pandemic] was terrible and killed so many people, but if you were looking for a silver liner, this revaluation was healthy and good. It made us take a closer look at each other.

“I tend to side with those who say that [shift to remote, flexible work] is going to be more permanent than people think. “

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