“It makes huge commercial sense for Dentsu. It’s a bold decision that must have been difficult to make but completely correct.” says Martin Sorrell, matter-of-fact as ever. The founder and executive chairman of S4 Capital was speaking to Campaign Asia-Pacific during a recent visit to Singapore, referring to Dentsu’s plan to hive off its international operations. For Sorrell, who has long predicted such moves, it is simply natural selection.
“We’ll go from six to five, then five to four and maybe even four to three. The strong will consume the weak,” he told Campaign earlier at Cannes, suggesting that Publicis might “devour parts of Dentsu,” just as “Omnicom is devouring IPG.” Back in 2023, he was among the first to suggest Dentsu should focus on Japan and spin off the rest (video from June 2023 below).
Of course, that Darwinian framing cuts both ways. While he diagnoses the extinction of others, his own creature, S4, launched in 2018 as an answer to everything WPP was not, has been under pressure. Shares are down 97% since their 2021 peak, with the market trimming its valuation from nearly £4 billion to £140 million. In the first quarter of 2025,revenues dropped 11.4%. Still, Sorrell insists the company remains resilient.
“The industry is facing significant disruption, and of course, we are disruptors, so this plays to our strengths. The world is going to be very different in the future from what it has been in the last 30 or 40 years. So, growth will be slower.”
The MSQ flip-flop: the industry’s briefest will-they-won’t-they
Reports of a potential tie-in with Peter Reid’s MSQ set off juicy speculation, only for MSQ to claim “surprise” about any discussions or proposals regarding "the rumoured transaction". To many, it looked like a case of crossed wires, or worse, a clumsy courtship gone wrong.
Sorrell rejects that suggestion. “S4 did not court MSQ. We don't actively court mergers,”he says firmly.
“They made the approach. One Equity Partners is on the board of MSQ, so when MSQ said their board was unaware, that's a somewhat strange comment to make. There was a leak in the press, and we’re obligated under the stock exchange regulations to make a public announcement when that happens. To suggest the board was unaware, when One Equity Partners are right there, feels disingenuous.”
Sorrell’s carefully calibrated denial is aimed at resetting the record. “We respond to inbound requests, but we’re not actively looking for merger partners,” he stresses. In a market where perception is oxygen, that distinction matters.
“Efficiency is going to be really important. Clients have already put pressure on suppliers and their supply chain to be more efficient in Q2 and Q3 following tariffs.”
Industry pressures, he argues, are not his burden alone. From IPG’s layoffs and Omnicom’s flat growth to Stagwell’s “backwards” trajectory, he says macro pressures are everywhere.
“Look at Stagwell,” he says, “They’ve made 14 acquisitions in the last year, and organic growth in the first two quarters of the year is around half a per cent. So despite their acquisition activity and loud noise about growth, something has happened there and their underlying growth is flat.”
To explain, Stagwell’s growth in Q2 was a thin 0.6%, up to $598 million, despite an otherwise respectable 5% topline revenue increase. Acquisitions can inflate topline numbers, but they don’t guarantee long-term performance. The group’s acquisition of ADK Global, only completed in July, hasn’t shown up in earnings yet.
But Sorrell highlights the inconsistencies between organic and top line growth. “In Q1, Stagwell abandoned its organic growth metrics. Everyone gives out their organic growth metrics. In Q2, they were forced by analysts to give it again.The reason they abandoned it in Q1 is that it would’ve gone down to zero, and in Q2 it was a little more than zero. They’re about half a per cent in the first half of the year. No one’s writing about that.”
The picture he paints is not subtle: an agency on an acquisition spree but with little growth to show for it once the gloss is stripped away.
And that, he suggests, is the point. The industry is stumbling in chorus, even if the scrutiny falls unevenly.
Stagwell’s global CEO Mark Penn, for his part, frames the strategy differently. As he told Campaign at Cannes: “You’ve got to believe you can do something others haven’t done, and then back it up with real moves. Acquisitions, tech investment, talent—you can’t wait around for organic growth to get you there.”
Macro bets, micro patience
To understand that confidence, one must consider his macro lens. S4’s challenges, Sorrell insists, are less structural than environmental. “Last year wasn’t easy, and this year hasn’t been easy either,” he remarks, referring to broader economic conditions cannibalising profits across the agency landscape.“Global growth will be below 3%, inflation is stubborn, and interest rates will be high. Tariffs don’t help either. Geopolitics, be it US-China, Russia-Iran, creates uncertainty. But growth still exists. You have to pick geographies carefully.”
In APAC, he sees China, India, and Southeast Asia as “ripe” for returns, though political risk and supply chain volatility temper his enthusiasm.
“As we go into 2026, you’re going to see a tremendous focus on two things. One is where clients grow, and then also making sure they are technologically even more efficient. Clients are not cancelling, they are delaying. By 2026, there will be enormous pressure to implement these technologies at scale.”
That “technology” is shorthand for the usual suspects— AI, quantum computing, blockchain—areas of digital technology that S4 sees shaping the future.
Financially, the picture is challenging. Q1 revenues slipped 11.4% like-for-like as tech clients hold marketing spend and increase capital investment in AI. Critics blame overreliance on Alphabet, Meta, and Amazon, whose budgets have cooled. At S4’s June AGM, Sorrell said he expects better performance in the second half of 2025, with new wins or expanded scopes with General Motors, Asana, Amplifon, Samsung, Square, NCS, and Opella. Still, full-year net revenue is forecasted below last year, with interim results due on September 15.
“We’re also working with a big CPG client (can’t name them) where the average time to produce a commercial was 200 days. We’ve cut that down to 15 days,” he said, describing the company’s first area of focus: speed.
Second is what he calls “Netflix on steroids” or hyperpersonal content creation at scale. “Instead of producing a few hundred thousand executions, we can generate multiples. Our work for BMW in Europe and GM globally is an example of that.”
The third area is media planning and buying. “Our industry is still largely manual or semi-automatic. In the algorithmic age, that doesn’t work. We’re working with Google and Meta on Advantage Plus and Performance Max to move media buying to algorithmic models, with agencies validating platform outputs,” he said.
Fourth comes general efficiency. Sorrell pointed to partnerships with AWS, Adobe, and Nvidia to cut broadcast production costs by 70–80% with AI and cloud technologies. Further, given new efficiencies in visualisation and copywriting-in time and money, Sorrell says the agency is upfront with clients in most of the presentations that Monks makes about saving 30% of the current costs.
And fifth, the area he calls most exciting, the democratisation of knowledge. He elaborates with an example.“At Nvidia, Jensen Huang reportedly has 51 direct reports and uses AI to spread knowledge across the company. Similarly, at S4, for our biggest client, Google, where we have about 700 people, AI helps us democratize knowledge across teams,” he said.
“So those are the five focus areas. Right now, because of tariffs and geopolitics, clients are hesitant. They’re not cancelling but delaying,” Sorrell added, framing the moment as one of patient preparation rather than panic.
Old grudges, new gospel
On his old haunt WPP, Sorrell remains a critic. “WPP is now valued at £4 billion. When I left, it was £16 billion. That’s a quarter of the value it was. It has more debt than it had before. And killing brands like JWT, Grey, Wunderman, GroupM and AKQA…and by doing so, they've killed a lot of value and upset a number of clients and a number of people. You don’t do mergers by just putting a spreadsheet together and issuing a press release.”
The burn is vintage Sorrell: personal, pointed, and very much on the record.
Publicis, by contrast, he credits for finding its way out of the wilderness. Omnicom and Havas, he notes, are holding their ground.
Seven years after launching S4, Sorrell insists the founding thesis is still right. Digital-only, data-driven, one brand, faster-better-cheaper. Margins, right now, he admits “are round 11 or 12%, they should be closer to 20%. Publicis and Omnicom are able to have those kinds of margins; there is no reason why we shouldn’t be able to do that.”
Asked if he’d do anything differently if starting over for S4, he lists margins, client diversification, and efficiency. “So, what are you suggesting I should do differently? It doesn’t make sense to go back. But when you say, 'What would I do differently?' You’d always want to do better than you’ve done. However, the fundamental principles of digital-first, data-driven, and AI-enabled—those are timeless advantages—remain even more relevant today than when we started seven years ago. I have great confidence in that model.”
Editor's Note: This article, first published on September 2, has been updated on September 4 to reflect additional input from S4 Capital and Stagwell.
