Agencies can’t compete with big tech; they must befriend them. That’s the opinion of the S4Capital boss, who was speaking at The Drum Live on the topic of agency survivial.
Cameron Clarke interviewing Sir Martin Sorrell at The Drum Live
At The Drum Live, S4Capital founder and chairman Sir Martin Sorrell joined The Drum’s editor Cameron Clarke on stage for a discussion that quickly turned to why the scale of the top tech players means that a largely plateauing agency network ecosystem can’t compete, but must get close.
Sorrell told the gathered audience: “If you look at the holding companies, apart from Publicis and maybe Havas, which is growing at a small level, nobody else is growing. So really, it’s the big platforms… their positions get reinforced. The big bananas are going to become even bigger. It’s the six platforms – Google, Meta, Amazon, TikTok, plus ByteDance and Alibaba in China. Those are the big players and the problem for the regulator is they’re going to get bigger.”
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For Sorrell, this consolidation of power leaves agencies little choice but to adapt. “For us, that means we have to get closer to those companies. They are the game. The regulators won’t bring them up… so everybody in this room has got to think about how you work much more closely with those six platforms in particular. That is absolutely critical.”
When Clarke suggested this was the essence of a “frenemies” dynamic, Sorrell corrected him: “Well, no, it’s not actually. It’s friend, it’s friendly, more friend than enemy.”
Pointing to the valuations of Google and Meta, he emphasized the need to acknowledge their scale: “Remember, these companies are nation-states. These are not Mickey Mouse companies... these are huge, so you have to get your mind around working with them and understanding what they’re doing and we have to be validators.”
That reality also means agencies will struggle to offer genuine alternatives. Sorrell pointed to the rise of AI-powered ad tools such as Meta’s Advantage+ and Google’s Performance Max as evidence of an inexorable trend. “What we’re starting to see is integrated content, media planning, online systems, increasingly AI-driven, which are going to become increasingly important and dominant in our industry. I don’t think we can compete against that. One of the things that, interestingly, WPP tried to pursue, or is trying to pursue, is creating alternative software. That is very difficult.”
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Sorrell believes these dynamics, combined with the accelerating shift to digital, will reshape the global media landscape. He forecasts that by 2030, at least 80% of the market will be digital – eventually reaching 100%. “Virtually everything will be digital,” he said, predicting that AI will hit at scale by late 2026, coinciding with the US midterm elections, when volatility in ad markets often peaks.
He argued that agility is the only viable strategy for agencies. “Agility is hugely important. I mean, everybody talks about agility. Do we do it and do you do it?” This change requires an external force and, in this case, it is big tech’s dominance.
As he put it: “They are going to get bigger and, in my view, more dominant. That’s anathema to say, but that forces us to get closer [to them].”
For an industry long defined by its uneasy relationship with Silicon Valley, Sorrell’s conclusion was clear: the future belongs to the platforms and agencies must learn to thrive by working alongside them – whether as friends or frenemies, it matters little to big tech.
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