Sir Martin Sorrell, the founder of WPP and now advertising’s fastest growing company S4 Capital, thinks the industry may have hit its lowest point during COVID-19.
He says the June quarter was a bloodbath for many clients.
“Less so, tech, less so health care, less so, obviously, online shopping, less so in-home entertainment and gaming,” he told AdNews in an interview.
“Tech is about 53% of our business and if you threw healthcare in you'd get close to 60%.
“Two thirds of our business are in tech and healthcare which is the sweet spot, even during COVID-19.”
In January, S4 recorded organic growth of 33%, in February 21%, March 6% and April 3%.
“We haven't given the market June, but I can tell you that it was double digits,” he says.
“And then I can also say to you that July looks as though it was stronger than June.
“I would say we're in a digital sweet spot or growth hot spot around first-party data, digital advertising content and programmatic with data and analytics sewn in.”
Sorrell says the second quarter marked the bottom of the ad market, the third quarter will be relatively better and the December quarter better than that.
“Then as you get into 2021, I think it gets better and I think the crucial thing clearly is when we will be vaccinated,” he says.
This looks like happening in the second or third quarter next year.
Sorrell sees the recovery uneven, better in some sectors than others.
“I would still stick with where I was a few months ago, which is, there are some areas that are V-shaped like technology and healthcare, in-home entertainment and gaming, online shopping,” he says.
“But there are areas that are U-shaped like the packaged goods companies, although Proctor had a remarkably strong first six months of this year. They've done extremely well.”
From Sorrell’s point of view, lockdown was productive.
On a personal level, it can make life difficult but lockdown didn’t prevent S4 from pitching effectively for business.
“It hasn't prevented us from doing deals,” he says.
Sorrell says S4 has a new acquisition coming later in August, an econometric media optimisation area in the UK “we are pretty excited about”.
S4 Capital recently raised GBP 113 million as a war chest for acquisitions.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.