S4 Reveals Its Business Model
Yesterday the curtain was thrown open on Sir Martin Sorrell’s new S4 venture, with the company’s release of a 191-page business perspectus. It’s an extremely detailed outline of their business strategy which relies heavily on data analytics to drive marketing. For an illustration check out S4’s Advertiser Delivery Chain in the graphic below. It’s notable that “Content Distribution” (the advertising function itself), is only one of the six steps in their process.
What’s really remarkable to see is the contrast between this business plan and what Sorrell started at WPP back in 1987. WPP’s key differentiator was Creative, which is why the company acquired premiere creative shops like Olgivy and Y&R. In comparison S4 has no plans to developed its own creative services. Makes you wonder how that “Content Development” step will be handled – maybe outsourcing? Instead S4 will focus on automated ad delivery, data analytics and optimization.
In a way Sorrell’s two approaches provide an interesting before-and-after yard stick for the entire marketing industry over the last 30 years.