Sir Martin Sorrell Sees No Easy Exit for Holding Companies

Publicis has been on a successful run. Is it sustainable?

What Publicis does—everybody says it’s all proprietary trading, which is why I think The Trade Desk thing is dangerous territory for them, they’re going to turn the microscope on themselves—is they look at the client as a whole.

Omnicom and WPP are falling into the trap of the matrix being driven by capability. The reorganization of WPP and the reorganization of Omnicom is capability-first, client second, geography third. Publicis and, indeed, ourselves is geography first, client second, capability third.

What’s wrong with organizing around capability?

You have warring factions. If you do it by country, you have inter-country rivalry, inter-region rivalry, that’s true, but you get people to integrate what they do. Publicis got it right. Can they maintain it? Well, the industry wisdom is these things go in cycles. 

Actually, John Wren, if you look at Omnicom Advertising Group before they acquired IPG, had a better strategy. He was trying to push them together. Publicis didn’t nudge. They were quite forceful. And it was painful for them. They were more violent than probably I would have been. But directionally, it was the same thing.

What do the holdcos look like in three years?

I don’t know what [WPP CEO] Cindy [Rose] is going to do. She has huge balance sheet problems. But I would guess Omnicom will still be here. Publicis will still be here. Dentsu will be in a different form. Havas will be in a different form. WPP will be in a different form.

Let’s talk about S4. You guys had a tech winter. Where are you in all of this?

It’s tough. We rely on wholesale AI adoption. We really depend on more car verticals, more financial services verticals, more packaged goods. If we can get a little bit more traction, it will be fine. But we need more traction. And we’re not organized enough. Our integration has not been perfect by any means. Liquidity is much better.

What does that traction look like and how do you get it?

Traction looks like building relationships. If you look at our biggest relationships—Google, Amazon, T-Mobile, Disney, GM, Meta—there’s good stuff there, but the problem is that 45% of it is tech. And they’re all spending money on capex.