New York-based creative agency Decoded Advertising will join S4’s MediaMonks, while Metric Theory, San Francisco-based performance marketing agency, will join S4’s programmatic firm MightyHive.
“We believe that 2021 will be a very strong recovery year for the global economy,” said Sorrell Adweek in an exclusive interview prior to the public announcement of the deals. Sorrell is particularly bullish on the US market, which accounts for about 70% of S4’s business and virtually 100% of Decoded Advertising’s business.
According to Sorrell, S4 Capital mastered the pandemic with growth between 16% and 17% by the end of September 2020. Sorrell said Decoded managed to “get even better”. S4 is forecasting gross profit of around $ 70 million in 2020, which is 50% growth over 2019.
Decoded Advertising, MediaMonks and Metric Theory were recognized in the Fastest Growing Class of 2019 by Adweek.
Six-year-old Decoded cut his teeth in the DTC space – one of the agency’s first clients was Dollar Shave Club – and has clients from big brands like Intuit, SC Johnson, T-Mobile, WW International and Visa.
The integrated approach of the shop combines creativity, technology and media. Campaigns like “Money Is Changing” by Visa, “The Fixer” by HP (titled “Breaking Bad Star Johnathan Banks”), a virtual Santa program for T-Mobile and the more efficient expansion of the WW audience are some of the recent ones successful projects.
“Scaling as an opportunity”
“It’s all about creativity,” said Matt Rednor, who founded Decoded in 2014. “We see scaling as an opportunity to experiment more creatively and have more data points to inform this. The lever of creativity is responsible for 70% of performance opportunities, which means that we have to experiment and try new things throughout the customer journey, ”he said.
According to Rednor, there have been several overtures from other companies. But in S4, and in Sorrell in particular, Rednor “found a group of like-minded people who can instantly expand our ability to proceed with a more modern approach to creativity.”
“We didn’t really want to sell or be bought,” said Rednor, who prior to starting Decoded, spent nearly five years each at BBDO and MRY. “We were looking for a partner who would allow us to create the right environment to continue to thrive and to keep building so that we could compete and win.”
Sorrell said such Adweek deals – structured with cash and stakes in publicly traded S4s – are essential to the company’s growth.
“We don’t like buyouts,” said Sorrell, who has made WPP the world’s largest conglomerate of advertising agencies for more than 30 years. “We believe they have passed their expiration dates and are likely the Achilles’ heel of traditional agency holding companies.”
Sorrell said the model of a holding company developed by Marion Harper Jr. in the 1950s that focused on market share “no longer works.”
Sorrell noted that S4 has five global customers valued at over $ 20 million – known internally as “Whopper” – including the 2020 wins from BMW Mini and Mondelēz. “With Decoded’s help, we’re sure to be 20 [whoppers] and get the first 10 in a short amount of time, ”said Sorrell, pointing out that S4 companies have taken action against agencies and holding companies like Dentsu, IPG, Publicis and WPP and taken AKQA out of business.
Sorrell said Brexit did not affect S4’s business and was not a factor for the future. Part of the ambitions and strategies are based on building outside the UK market with an emphasis on the higher growth digital end of the business. With a market capitalization of around 3.6 billion US dollars, S4 is represented in 31 countries.