Martin Sorrell’s S4 Capital said Monday it is in advanced talks to acquire programmatic marketing agency MightyHive, five months after it paid $350 million for digital production agency MediaMonks.
MightyHive is valued at up to $200 million and brings in $25 million in annual revenue, according to Financial Times.
Sorrell launched S4 in April after being ousted from WPP – the holding company he built and ran for 30 years – following allegations of harassment and misuse of company funds. He didn’t wait long to launch a new network that would take a modern spin on his former empire with operating companies focused on first-party data, content and digital planning and buying.
MightyHive is a welcome addition to the family. Founded by former Google executive Pete Kim, the agency focuses on programmatic operations with heavy expertise on the Google Marketing Platform.
“MightyHive is a digital media and programmatic consultancy, not a conventional media agency,” said Jay Pattisal, principal analyst at Forrester. “It gives S4 the ability to effectively and efficiently place campaigns and content created by MediaMonks.”
Latching on to a growing industry trend, MightyHive helps clients bring programmatic in-house. Over the past three years, 26% of programmatic buying has shifted from external to internal agencies, according to the ANA. MightyHive counts Bayer, Sprint and Nationwide among its in-house clients.
MightyHive is also a Certified Google Marketing Platform Partner, a program started by Google to outsource sales and services for its stack. Since its launch in 2012, MightyHive has expanded its expertise to other programmatic platforms to be more agnostic for clients. The firm lists expertise with The Trade Desk, Amazon and BrightRoll on its website.
“We’ll objectively audit and score your data sources and platforms for their efficiency, transparency and efficacy for programmatic,” MightyHive’s website reads.
Ad tech expertise is crucial for S4, which wants agencies that are “agile, efficient and of premium creative quality – in other words: faster, better and cheaper” than those at legacy holding companies, Sorrel said last month at AdExchanger’s Programmatic IO. “Whether you and I like it or not, that is the way the world is going.”
WPP has suffered major media account losses this year, including United Airlines and American Express, and its stock continues to drop. Many criticize the company and its peers for being slow, inefficient and unwilling to collaborate.
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S4 will incentivize collaboration by giving bonuses to agencies based on the performance of the group, rather than the individual agency.
“Because media agencies act as banks for pass-through costs, they operate in a low-margin environment,” Pattisal said. “That puts tremendous pressure on the ecosystem. A MightyHive deal demonstrates Sorrell is looking to build a more modern digital agency group and not repeat mistakes of the past.”
