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Sir Martin Sorrell discusses his plans for S4 Capital





After Sir Martin Sorrell’s sudden departure as chief of WPP earlier this year, he set up S4 Capital to create a global-advertising, marketing, and ad-tech company by acquisition. That was followed by two big deals — MightyHive and MediaMonks.

Business Insider caught up with Sorrell offstage at its IGNITION Conference in New York in December, where he weighed in on the agency-holding-company model, WPP, and advertising measurement. Our interview has been edited and condensed.

Tanya Dua: With MediaMonks and MightyHive, S4 seems to have the programmatic and digital-production side of the equation figured out. What’s next?

Sir Martin Sorrell: We almost have the complete train set — probably about three-quarters to seven-eighths of the set. I’d like to see a little bit more in content and a little bit more in first-party data. But it’s difficult to find good assets, and they’re expensive. On the data side, there’s stuff that I really like, but pricing is hard. When IPG bought Acxiom, they seemed to leave behind the best asset [LiveRamp], and I wonder why that was.

Dua: The agency holding companies are making huge changes as well. Will that model as we know it survive?

Sorrell: They’ll survive, but there will be more consolidation. I can’t remember a time when it’s been more revolutionary.

Dua: What is your opinion on the VMLY&R and Wunderman-J. Walter Thompson mergers at WPP?

Sorrell: VMLY&R was something that I initiated. [VMLY&R CEO] Jon Cook and I fully agreed that it was going to happen. We were going to put Geometry [Global] into it as well. But I think it was a mistake for Jon not to have been more magnanimous. He would have done himself and his people at VML a lot of good by calling it Y&RVML.

I can understand the idea of making it digital-first by implication, so you put Wunderman before Thompson and VML before Y&R, but it means the death of the Y&R and Thompson brand. I was in Argentina when it was announced, and Y&R and JWT in Argentina mean something.

These decisions are difficult to make, but when you make them, you have to blend them in. You have to go out and talk to the troops and explain why you’re doing it, because if you don’t, you will lose their hearts and minds.

Read more: Sir Martin Sorrell says the advertising industry reminds him of Burning Man, and it should embrace ‘radical change’

Dua: Do these moves signal the death of creative agencies? You don’t seem to be shopping for creative assets for S4.

Sorrell: You’re living in the 19th century if you define creativity like Don Draper. The definition of creativity is shifting. Believe it or not, data analysts can be creative. People who do digital can be creative. Data doesn’t destroy creativity, but enhances it, informs it, and makes it more effective.

Dua: So who is S4 competing with? The consulting firms?

Sorrell: I don’t worry too much about the industry. What I worry about is what does S4 deliver in terms of data, driving content, and driving media planning, buying or programmatic. Several clients have said to me that is their model. They have their first-party data at the core, and that drives what they do from a content point of view and what they do on the media-planning and buying side.

The acid test of S4 will be whether the combination works effectively and has correctly analyzed what clients want. The mantra — it’s a terrible mantra in many respects — is doing it faster, better, cheaper, and more efficiently.

Dua: You’ve said before that measurement needs to be improved. Some advertising executives have gone over to the measurement side recently. What are your thoughts on that?

Sorrell: Comscore is a tragedy. We invested in Comscore when I was at WPP, and they had a massive opportunity. I was really disappointed with the way that was handled. I’m just as hopeful now as I was before. With Nielsen, I think [new CEO] David Kenny will make a difference. It’s too early to tell. But there’s a big opportunity there.

Dua: Has Amazon started to challenge Google and Facebook’s dominance?

Sorrell: In terms of market cap, it has already. In terms of advertising, Amazon has a long way to [go], but it will challenge on advertising and search. Fifty-five percent of product searches in the US, according to Kantar, are delivered or initiated through Amazon. Those are the three, the troika, if you ignore the Eastern challenge, which includes Tencent and Alibaba.


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A big test of reusable packaging for groceries comes to Canada





An online store has launched in Ontario selling groceries and household items from Loblaws in containers it will take back and refill — a test of whether Canadian consumers are ready to change their habits. Industry-watchers say it is breaking ground for reusable packaging.

The store, called Loop, launched in Canada on Feb. 1, in partnership with supermarket giant Loblaws, and offers items like milk, oats, ice cream and toothpaste for delivery in most of Ontario. Loop is already operating in the continental U.S., the U.K and France. 

Included so far are some products from well-known brands such as PC sauces and oils, Häagen-Dazs ice cream, Heinz ketchup, Chipits chocolate chips and Ocean Spray cranberries. 

“The goal is really validating that this is something the Canadian public is interested in,” said Tom Szaky, founder and CEO of Loop and its parent company TerraCycle.

Unlike existing small no-waste retailers, they want to offer “your favourite product at your favourite retailer in a reusable and convenient manner.”

The involvement of a huge retailer makes the launch notable in terms of scale and who it will reach, said Tima Bansal, Canada Research Chair in business sustainability at Western University in London, Ont. 

“I think it’s at the scale that’s needed to create the change in the community in Canada more generally,” she said.

How it works for customers

Szaky likens Loop to the reusable bottle system for beer in Canada “but expanding it to any product that wants to play in the [North American] ecosystem.”

The ultimate goal, he said, is to give people a greener way to consume that limits the amount of mining and farming needed to produce packaging.

“This allows us to greatly reduce the need to extract new materials, which is the biggest drain on our environment. currently lists just 98 products, although many are sold out or “coming soon.” 

As with other online grocery stores, customers fill their virtual shopping cart, but in addition to the cost of the item itself, they pay a deposit for its container. That can range from 50 cents for glass President’s Choice salsa jars like the ones that are normally at the supermarket to $5 for a stainless steel Häagen-Dazs ice cream tub. 

The items are delivered to a customer’s home by courier FedEx for a $25 fee, although the fee is waived for orders over $50.

Once you’ve spooned out all the salsa or ice cream or squeezed out all the toothpaste, the container doesn’t go in the recycling bin. Instead, you toss them into the tote bag they came in — even if they’re dented or damaged — and they get picked up.

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This wearable device beeps when workers get too close to each other





It’s a device that emits a high-pitched beep, buzzes and lights up if your coworker steps too close.

While some introverts would have bought this device before the pandemic to stave off chatty colleagues near the coffee machine, ZeroKey designed the product with a more important purpose — helping employees physically distance to reduce the risk of spreading coronavirus. 

The Calgary tech company’s “Safe Space” device looks like a small plastic badge that can be worn on a wrist or clipped to a shirt pocket or belt. 

“Our products, in a nutshell, localize or figure out where things are in 3D space and our big claim to fame is we do it very precisely, more precisely than anyone else in the world,” said Matt Lowe, co-founder and CEO of ZeroKey.

The company says its location-tracking technology passively monitors the distance between each device and is accurate down to 1.5 millimetres. The distance on devices can be set — so if, say, science determines three metres apart is actually safer that two, that can be tweaked. 

Lowe says the company came from humble beginnings — he and a co-founder, working out of a room in his house. The company has grown from two to 30 employees and has more openings it’s looking to fill.

Inspired by sci-fi

Their inspiration comes, as so many technological innovations have, from sci-fi. 

Lowe recalls watching Minority Report, and being transfixed with the gesture-based user interface Tom Cruise’s character operates. 

“Wouldn’t it be awesome if we had an interface that was more in tune with how humans operate naturally with their hands. So if you could just walk up to a new piece of technology … and just immediately be proficient,” he said. 

But applying that tech to the COVID-19 era wasn’t something the company had anticipated.

Lowe said some of the company’s clients in the manufacturing industry approached ZeroKey with a request.

“They came to us and said, ‘hey … we have the data where people are, can you build some sort of system so that we can do contact tracing and we can let people know if they’re closer than two metres?’ And we said, ‘absolutely … that’s easier than what we normally do,'” he said.

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Blistering rallies spur Canadian tech world to repeat equity sales





Canadian technology companies have been making multiple trips to the equity market over the past year, capitalizing on a rally in tech shares that’s helping them raise cash at ever higher valuations.

Dye & Durham Ltd., which makes software used by law firms, took advantage of a more than sixfold rally in its shares since its July IPO to raise $500 million (US$394 million) in a bought deal of stock and convertible debentures, the company said Tuesday. Dye & Durham, which went public at $7.50 a share, received $50.50 per share in the private placement. Peers including Lightspeed POS Inc. and Docebo Inc. have made similar moves.

Shares of technology companies have gained since the onset of the pandemic as their corporate customers increasingly turned to cloud-based applications to support their remote workforces, said Anurag Rana, an analyst at Bloomberg Intelligence. The technology sector was one of the few places investors could look for growth during the crisis, with huge swaths of the economy including retailers, restaurants, airlines, hotels and casinos hammered by lockdowns, he said.

“Issuers and private-equity investors are not stupid, and they know somewhere down the road that valuations may come back,” Rana said. “So this is the time when they sell.”

Canada’s S&P/TSX Information Technology Index has risen 82 per cent in the past year, fuelled by rallies in Lightspeed and Shopify Inc. That compares with a 36 per cent advance for the U.S. S&P 500 Information Technology Index.

Those gains are giving early investors in tech companies an opportunity to take some profits. In conjunction with Dye & Durham’s private deal announced Tuesday, some investors agreed with the underwriters to sell 1.98 million shares at the $50.50 price as well.

Lightspeed, which provides cloud-based point-of-sale systems for retailers and restaurants, has also seized the moment. The company went public in Canada in February 2019 and last year followed that up with a U.S. IPO, selling shares for US$30.50 apiece. The deal raised US$332.3 million for the company and US$65.4 million for some shareholders.

After Lightspeed’s share price more than doubled, it went back to the market again last week with a public offering of shares for US$70 each, raising US$620.2 million for the company and US$56 million for other shareholders.

Docebo, which sells cloud-based learning software, has tapped the market multiple times over the past year. The firm, which went public in Canada in October 2019, completed a bought deal of shares atC$50 apiece in August. The move raised $25 million for the company and $50 million for investors including founder and Chief Executive Officer Claudio Erba, Chief Revenue Officer Alessio Artuffo and top outside investor Intercap Equity Inc.

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