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* Expects consumers, companies to spend in Q2
* Eyes more deals
(Adds quotes, background)
By Kate Holton and Paul Sandle
LONDON, March 16 (Reuters) - Martin Sorrell, the world's
most famous advertising executive, expects global economies to
roar back to life as they recover from the pandemic over the
next two years, but is worried about what comes after that.
"The drum beat in our daily meetings is getting louder and
louder and louder, things are flying," he told Reuters, adding
that tech and healthcare were leading the charge.
The 76-year-old, who has spent almost half a century making
acquisitions - first at Saatchi & Saatchi and then as he built
WPP, is eyeing more deals for his S4 Capital,
including a possible transformational one further down the line.
The almost three-year-old company counts Google, Facebook
and another undisclosed global tech firm as clients and is
purely focused on digital advertising, which has continued to
grow through the pandemic and now accounts for more than half of
ad spend.
"I think we're a royalty on the growth of digital
transformation," Sorrell said, on the potential for the firm to
be at the heart of the shift. "We will be at the north end of
the market's estimates of 15 to 20% like-for-like growth during
COVID," he said, of S4's 2020 gross profit performance.
He said he was "extremely bullish" about 2021 and 2022, but
longer term is worried about soaring government debt.
"The consumer has been saving like crazy, and I think
companies have been saving like crazy and I think they're going
to open the spigots in Q2," he said.
"It'll be great for '21 and '22, but then how do we figure
out who's going to pay for this?"
GROWTH
Sorrell, who built WPP into the world's largest ad company
by acquiring the likes of Y&R, JWT and Ogilvy, launched S4
shortly after he left the British group in 2018 over a complaint
about personal misconduct. He had always denied any wrongdoing.
It is already worth $3.5 billion after its shares rose over
200% in the last year, when many ad groups faltered.
Able to analyse data quickly to place targeted ads online,
S4 succeeds because it is not held back by legacy agencies
designed for an era of TV and traditional campaigns, Sorrell
said.
The company he wants to rival is Accenture, the consultancy
using its expertise in data to muscle into marketing.
Sorrell suggested the ideal destination for S4 would be to
find a bigger company it could inject itself into and run. The
most suitable, he says, would be New York-listed Globant, a
digital transformation group that WPP held a stake in.
"Globant comes at the digital transformation process from
the IT and tech end and we come at it from the marketing end,"
he said. "If you put S4 together with Globant you have the
perfect competitor, in my view, to Accenture."
Globant did not immediately respond to an emailed request
for comment outside of normal U.S. business hours.
In the meantime, Sorrell expects to announce another smaller
acquisition on the content side soon.
While his appetite for deals is undiminished, the pandemic
had forced Sorrell to re-examine the value of constant
globe-trotting. He said he won't be travelling as frequently in
future, but the trips will be longer.
"Businesses have been better run during COVID because we
haven't been able to travel," he said. "Management has been
given more room to manoeuvre.
"The stranglehold of the centre has not been as great."
(Editing by Louise Heavens and Mark Potter)
