When most people say they’ve been sleeping less for the past year, it’s an indication that things aren’t quite right. But for Michel de Rijk, who officially took the reins at S4 Capital as APAC CEO in January, it’s the opposite.
“It doesn’t make you tired when you’re enjoying it,” he tells Campaign as we sit in S4’s shiny new Singapore office, which houses both sub-brands MediaMonks and MightyHive. “It’s been a rollercoaster but in a really good way. I’m enjoying every second of it. We’re rolling up our sleeves and getting shit done.”
That last sentence encapsulates the core of S4’s attitude, de Rijk says. Being a scrappy insurgent, which is an odd thing to say given Sir Martin Sorrell is at S4’s helm, is part of the group’s appeal to brands. With year-on-year revenue in APAC up 160% across both MediaMonks and MightyHive, even de Rijk admits he’s surprised how well the proposition has been accepted so far. MediaMonks’ recent campaign for Puma in China (see below) is the latest example of S4 gaining traction with big brands in Asia.
He’s also quick to add that there’s plenty more to come. S4 has made no secret of its desire to grow through acquisition, a strategy straight out of the Sorrell playbook from building the WPP empire. But this time, de Rijk says, any purchases will only occur to bolster the three core elements of S4’s offering: first-party data, content, and media execution.
To that end, S4 made its first APAC-based acquisition last month, buying marketing cloud specialist BizTech in Australia through MediaMonks, a market where MightyHive is already strong. De Rijk says that this is just the start, when outlining his ambitions for the next year.
“Regionally I hope we’ll close two or three strategic acquisitions that will give us presence and capabilities in markets that we don’t have today, to a scale that we can really go for big assignments on the APAC level,” he reveals. “Right now, to do stuff across the region we might be a little bit light. If not within six months, then 12.”
Producing smarter content
Moreover, de Rijk is keen to build a network of MediaMonks content studios in APAC, through acquisitions similar to S4’s purchase of Caramel Pictures in Amsterdam. He sees it as critical to help brands evolve their thinking around content.
“Especially in Asia, brands still think too much that you start with a big idea, shoot a TVC and cut it down into different formats that are necessary to fulfil the media plan,” he explains. “You shouldn’t start with a TVC. The big idea is one thing, but at that stage you straightaway need to know the media plan and make sure you shoot content that’s relevant for the audience you want to serve, and for the different platforms you’re using.
“We cannot use the words ‘cut down’ any more. Let’s stop doing that. We want dedicated content studios and an always-on production strategy for all the platforms. That is a big play for us through MediaMonks, especially in Southeast Asia I think.”
It’s not all about acquisitions though. One of de Rijk’s growth strategies is simple and effective: to bring both MediaMonks and MightyHive into APAC markets where one is operating but the other isn’t. MediaMonks is looking into Japan, where MightyHive has a presence.
MediaMonks is established in China, so MightyHive will follow. In India, where S4 hired Poran Malani as local head, MediaMonks has just built a production house and office in Bangalore, while MightyHive is setting up in Mumbai. Across both brands, de Rijk says there are also boots on the ground in Korea, Indonesia, Thailand and Hong Kong, though these are very small teams.
Of S4’s core elements, the data pillar has yet to be acquired. At a conference in Singapore recently, de Rijk made clear his reservations about Publicis’ US$4.4 billon acquisition of Epsilon—Sorrell himself was similarly dismissive— and he speaks similarly about the cost and risk of a data acquisition here.
“There are some interesting companies out there, but a lot of them are, shall we say, healthily priced,” he suggests wryly. “There are a few billions flying around lately for a very expensive email database, to be honest. So there are some options and hopefully something concrete soon, but it doesn’t stop us from what we’re doing right now.”
With all the developments in various markets, it’s clear a lot has happened since January and de Rijk feels reinvigorated by the rapid pace. “We’re bringing the highly respected rolodex of Sir Martin, on one hand, with two very entrepreneurial companies powering that,” he says. “That combination is very interesting, because it opens up doors at the highest levels possible, but under it you have a group of very passionate and ambitious people who directly create the content or operate the campaigns.”
The speed of S4’s operations and decision-making are particularly refreshing, de Rijk says, having spent several years within the WPP machine. All of S4 operates under a single P&L, which means efficiency and collaboration in a way that doesn’t happen at the holding companies, where separate agency brands with separate P&L’s mean politics and bureaucracy.
“The moment you acquire something and put them on an earnout model for three to five years, that is an independently run company within a company. I’ve seen it,” he states. “Then it’s: ‘oh, you’re in a market we’re not in, can we use these people for our pitch? No. Can I record the revenue in my P&L because I’m still on earnout? No.
“You’ve constantly got these walls between the different agencies. So there’s internal friction, internal competition, overlap in activities, and massive inefficiencies. You come to a point, and this is bizarre, that sometimes for your own P&L it’s more beneficial to work with an outside third party than within the family. So it’s the opposite outcome of what you’re trying to do, just because of not being set up the right way. It’s stupid.”
De Rijk says a large part of S4’s success has been the flat hierarchy and ease of collaboration, meaning both MediaMonks and MightyHive can put the people with the right skills on any specific project, regardless of where they are in the world. On a recent APAC pitch, MightyHive needed expertise that people at MediaMonks in Amsterdam had, so they were simply drafted in.
“Clients are less focused on which agency brand they are actually working with,” de Rijk states. “They want to have the best team on their account, that’s it.”
As much as MediaMonks and MightyHive collaborate, de Rijk is keen to promote their specific capabilities to clients in APAC too. The content studio plan is part of MediaMonks’ overall creative production strategy, which seeks to break clients’ “one-off creative production” mindset, de Rijk says, which makes for rapidly stale content in the digital advertising world.
“If I see the same ad for the third time, I don’t see it anymore. It’s as simple as that. So is that third, fourth, fifth exposure still adding the value that the first two did? Probably not. It could have the same value if the creative was slightly different. But then you need to have an always-on creative strategy.”
Some brands argue this is a more expensive production strategy. De Rijk agrees but counters that it makes a client’s media more effective, which could save money on media spend. Equally, production costs can be minimised by creating all the global assets a brand requires in one studio, with one director in one location, something MediaMonks did for Nestle in Amsterdam.
“The assets all looked different and culturally relevant,” he says. “So the production costs go way down, but you get everything you need. If you put that [cost saving] into media, the effectiveness increases. Even if you don’t put that in media, and instead produce loads of different creative assets [for different media platforms] straightaway then, your cost-per-asset goes down tremendously. It’s a smart production process that isn’t rocket science. The reality is there just aren’t many companies doing it.”
On the MightyHive side, while the programmatic marketing services business is growing, de Rijk says the addition of an ad tech consultancy layer has been making great strides in Australia and will soon roll out across Southeast Asia.
“The reality is there just aren’t a lot of people who can truly understand what is right or wrong [in ad tech], what’s true or not,” he explains. “There’s a lot of training and education around it.”
He likens it to buying a new TV, and seeing 50 models that are all 4K HD, smart and look good to a regular consumer. “It’s confusing, but you want the best TV. So you need somebody there to ask, what do you want to do? What’s the distance from your sofa to the TV? Is internet needed? Do you really need 4K HD? That applies to ad tech too.”
From individual unit specialisms to whole network collaboration, acquiring new companies and growing exponentially, it’s clear that S4 has serious plans for APAC. The recent trio of senior leadership hires further demonstrates the firm’s intent to grow quickly in the region and work with leading brands.
But it seems de Rijk, and S4 as a whole, isn’t satisfied with the progress already made, and has big ambitions. A year in, and they’re still very keen to upend adland’s apple cart. “We’re on an amazing journey, and everybody sees that this is just starting.”