Global guru: Sir Martin Sorrell sees parallels with a recovery that surprised the world
Britain may be staring into the abyss of a winter ridden with job losses and businesses failing, but Sir Martin Sorrell believes the country is poised for a swift bounce-back in 2021 – and he says the outcome of Tuesday’s knife-edge US election could play a part in that.
The world’s most famous adman, known for his closely-followed predictions on the economy, reckons recent history offers a precedent. ‘In the financial crisis it took a long time for [Treasury secretary Hank] Paulson to negotiate with congress to agree [the bailout programme]. Everyone was so focused on the financial crash that they did not focus on the recovery. Things really slumped at the end of 2008 and the first half of ’09 was dreadful with lots of headcount cost cuts in America.
‘Then the snap back in 2010 – in the US and UK – really surprised people on the upside. There is a parallel here, I think the same thing is going to happen in 2021, depending on the arrival of a Covid vaccine.’
Sorrell acknowledges that, with a national lockdown looming, there’s a grim winter ahead for the economy. But he cites forecasts that global GDP will fall 5 per cent this year, and rebound 5 per cent next, with the start of the recovery in the second quarter of the year. He forecasts that industries such as technology and healthcare will see a sharp recovery, while automobiles, travel and hospitality will take longer to improve. The delayed Olympics and Euros football tournament will aid growth, he adds.
The prospect of a new President being sworn in to the White House will swing the outlook for global growth next year, he says. Sorrell reckons that, even accounting for the ‘shy Donald Trump’ voters, the Democrats have it: ‘I think [Joe] Biden looks as though he will win, but there’s no doubt that it is tightening.’ The tycoon refuses to pin his colours to the mast, or to say who will be better for the economy, but says Biden is more collegiate, or ‘multilateral’.
‘And more predictable,’ Sorrell adds. This particularly extends to relations with China, where the marketing guru believes the Democrat will call on the UK and rest of Europe to agree an approach. Of hostilities with China, stoked by Trump, he says that even with a Biden victory: ‘It will continue but perhaps it will be a more constructive tension.’
More broadly, he argues Biden in the Oval Office spells hikes in corporation taxes, inflation and US interest rates. This would be significant for us in the UK, as economic trends in the US almost invariably find their way here. The view from economists is that a Biden win could spell short term pain and long-term gain for the US. Sorrell adds: ‘I hope that the relationship between the US government and UK will be very strong if Biden was to win the presidency, but that’s not guaranteed. I’ll be interested to see whose phone calls Biden takes first.’
Sorrell has skin in the game. His digital advertising venture, S4 Capital, has significant interests in both the US and China. The two-year-old £2.1billion company was born from the entrepreneur’s tumultuous exit from WPP, the advertising behemoth he built over three decades. Sorrell left in 2018 after claims he used company money to pay for a prostitute. He strenuously denies the allegations.
The fallout has been bitter, with terse words from both sides. Sorrell, still a shareholder in WPP, never misses an opportunity to attack the company he created through a relentless stream of acquisitions over 33 years. He says: ‘The day that I left it was worth £16billion, it’s now worth £8billion. It’s halved in value despite making a considerable amount of noise. A lot of heat but no light. If they can’t grow their revenues next year they never will. My view is that they should be broken up.’
SIR MARTIN SORRELL, 75: I’VE ALWAYS BOUGHT MY OWN SOCKS (DESPITE WHAT HIS EX SAYS)
Cristiana Falcone, Sir Martin Sorrell’s estranged wife, sparked debate last month when she suggested in a newspaper interview that being married to a rich man is double the work.
Falcone, 47, said she worked just as hard during her marriage as when she was a media adviser – and ‘even chose his socks’.
Sorrell is reluctant to respond directly, but will he reveal who selects his socks now? ‘I’ve always bought my socks,’ he chuckles. OK, I say, but who’s your sounding board more generally these days if Falcone’s not around?
Wife: Cristiana Falcone sparked debate when she suggested in a newspaper interview that being married to a rich man is double the work
‘You’re assuming that she’s the sounding board,’ he retorts, laughing. ‘I’ve had two sounding boards – one was my father who died in ’89 and the other was a guy called Phil Reece, who was a lawyer, a senior partner of a firm in New York called Lewis and Gilbert who sadly died, also of cancer in 2004. Those have been the two sounding boards.’
FAMILY: Three adult sons from his first marriage who work in finance, a daughter, aged three, from his second.
WEALTH: £269million (estimated).
Favourite President: John F Kennedy
FIRST DIVORCE: £29million settlement with previous wife Sandra in 2005, including two Harrods car parking spaces. Now facing a second split.
LIVES: Belgravia, London, with his red setter, Ferus.
FAVOURITE FILM: 1975 period drama Barry Lyndon.
FAVOURITE MUSIC: My Funny Valentine, featuring saxophonist Gerry Mulligan and trumpeter Chet Baker.
EDUCATION: Haberdashers, Cambridge University, Harvard Business School.
PRE-COVID COMMUTE: Car into S4’s offices near Hyde Park.
POST-COVID COMMUTE: A brisk walk. B
BEST AMERICAN PRESIDENT: John F Kennedy.
FAVOURITE ADVERT: By language school Berlitz, where a German coastguard answers a boat’s ‘We’re sinking!’ call with ‘What are you thinking about?’
The group, which contains an array of agencies including Ogilvy and Wunderman Thompson, represents Sorrell’s life’s work. The grandson of Jewish refugees from Eastern Europe, he was born in North London and took inspiration from his entrepreneur father, who ran a chain of electrical shops. He became known as the ‘third Saatchi brother’ alongside Maurice and Charles Saatchi at their eponymous agency, before striking out on his own and building WPP. His departure from WPP is not the only split the 75-year-old has had to contend with. Earlier this year it emerged his second wife, Cristiana Falcone, was divorcing him after 12 years. Falcone, an Italian former media advisor to the annual World Economic Forum in Davos with whom Sorrell has a daughter, caused a stir in a newspaper interview last month when she said she believed that rich men were double the work and that marriage to a high profile figure can destroy your identity.
Does Sorrell agree? ‘I’ve got no comment on that Alex, no comment,’ he laughs. I try several more times to elicit a response to Falcone’s remarks – after all, they proved a lightning rod for days of debate about ‘trophy wives’ and the difficulties of handling rich spouses. But Sorrell isn’t budging. ‘It’s a no comment on that stuff’, he bats back firmly.
We’re talking over Zoom, with Sorrell’s instantly recognisable face disappearing in and out of a superimposed background – an artist’s impression of the S4 universe. He’s dressed casually, in black Tshirt with a black shirt, headphones on. More Silicon Valley than old school Madison Avenue.
He believes that S4, whose clients include Netflix, Uber and Paypal, has found itself in the ‘sweet spot’ of the advertising market as a digital specialist. Covid has spurred rapid growth in online shopping and education, but billboard advertising has plummeted in lockdown and the growth of streaming platforms has squeezed broadcasters that host traditional TV adverts. Next week, S4 is set to post a strong quarterly update as it picks up new clients including carmaker BMW.
Sorrell runs S4 from offices around the globe, including its headquarters near London’s Hyde Park where he walks to work, but he’s sanguine on the need for a premises to devise ad campaigns. Bank of England chief economist Andy Haldane said last week that working from home stifles creativity and Sorrell’s successor at WPP, Mark Read, echoed the view.
‘I would disagree,’ Sorrell says. ‘There is a view amongst people my age – or even some younger and some older than me – that you have to be in the office because that way you exercise control and you can see what people are doing. I don’t think that’s true.
‘Social contact is important but on balance I would say there’s a lot of stuff that comes out of what we’re doing remotely that’s very creative and very productive.’
Sorrell – who has struck mergers over Zoom – claims the next iterations of video conferencing will be much slicker, while being able to cut his globe-trotting regime has removed stress. He intends to take fewer, longer trips and cut down on short international hops.
He’s also a rare champion of the Big Tech giants, whose bosses took flak as they testified before US Congress last week. Sorrell argues that, while the likes of Google and Facebook should be recognised as publishers, attempting to break them up would be a mistake and the pandemic has proved their value.
He says: ‘There’s no doubt that small business has benefited hugely from being able to market their products using those big online platforms during Covid.
‘For the UK it’s going to be extremely difficult. We’re going to have to invest money in reskilling people, re-educating people, in 5G networks, in hardware like airports and rail and ports and software like 5G. Where’s the money going to come from? So I don’t think it makes sense to say to these tech companies ‘go away’.’
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