RE: Valuation26 Mar 2026 08:25
Advertising industry veteran Martin Sorrell said he is counting on the adoption of artificial intelligence at scale in the corporate world to get his company, S4 Capital SFOR 2.82%increase; green up pointing triangle, out of a slump.
AI looms large over the U.K. ad company. It has been working to embrace the technology in its own operations at a time when clients in the tech industry—which make up almost half of its revenue—cut marketing budgets to boost spending on data centers and energy.
“We’re very AI-focused,” Sorrell said in an interview. “Our future depends on wholesale adoption of AI at scale.”
Sorrell founded S4 in 2018 after his departure from WPP, the company he built into the world’s largest ad group through decades of dealmaking. He set out to follow a similar playbook at his new venture, with a buying spree focused on digital marketing, data and AI businesses.
S4—which works for the likes of Google owner Alphabet, Amazon.com and Facebook parent Meta Platforms—grew rapidly initially as a series of deals expanded its footprint, but has been under pressure as its biggest clients reduced marketing spending to free up more resources to build AI infrastructure. This prompted S4 to issue several profit warnings—including three last year—, downsize its workforce and work to bolster liquidity.
The company said Tuesday that it expected like-for-like net revenue—its key top-line metric—to be in line with analysts’ forecasts for this year, and forecast profitability to improve thanks to actions it took last year, when its workforce shrunk by 11% to some 6,300 people.
S4 shares jumped, gaining around 25% in European afternoon trading.
Sorrell, who is executive chairman at S4 and has voting control over the company, said there are signs that marketing spending is beginning to stabilize and improve.
“We’re starting to see green shoots,” Sorrell said.
While the war in the Middle East might make clients cautious, one silver lining could be a faster adoption of AI by companies to navigate the uncertainty, Sorrell said.
Carmakers and financial-services groups are at the forefront of AI implementation at the moment because legacy businesses in those sectors are under pressure from the rise of Chinese electric-vehicle makers and fintech companies, respectively, according to Sorrell. Consumer-goods companies are starting to use AI to counter volume declines and other sectors could follow, he added.
“The speedier that we see other verticals adopt the same approach as autos and financial services, particularly autos, the better it will be,” he said.
Meanwhile, AI is prompting S4 to change how it prices some of its work because it now needs less time to make commercials and clients demand more of them, Sorrell said. AI is also playing a bigger role in media planning and buying, he added.
Dealmaking is off the table for S4 as it focuses on reviving its top line, improving profitability and bolstering liquidity, the comp
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