Business Insider.<\/a>\u00a0<\/p>\n\u201cWe\u2019re currently in the midst of reshaping our business to be AI-enabled,\u201d he told analysts on the call. \u201cThe current cost reduction exercise is a part of that approach, and it improves our full strength heading into H2, as well as setting us up well for 2026.\u201d<\/p>\n
How that restructure works at scale remains unclear. But the direction is taking shape: S4 plans to rewire the business around what it calls an \u201cAI workforce\u201d, spanning three areas: data-driven strategy, automated content and optimized media. The goal is to bundle these capabilities into managed services turning reocurrant agency work into recurring revenue streams.<\/p>\n
Another piece of that model is consulting. S4 plans to guide CMOs through what these shifts mean for their org charts, workflows and definitions of value. Most of that consulting revenue is expected to come from systems integration, helping marketers implement and manage enterprise partnerships with AI infrastructure providers.\u00a0<\/p>\n
\u201cWe\u2019re on a path that we call mass marketing as a service within the next three years,\u201d said ter Haar.\u00a0<\/p>\n
Some clients are already further along that path than others \u2013 the ones who are moving away from paying from billable service to paying for outcomes. Those deals represent a small slice of S4\u2019s current revenue, but the long-term bet is clear: fewer people, more automation and a business model that looks less like an agency and more like a platform.\u00a0<\/p>\n
\u201cThe reality is AI is eating the agency business,\u201d said ter Haar.<\/p>\n
It\u2019s the sharpest version yet of the story S4 is trying to tell about its future \u2013 one built around the shift from \u201cagencies to agents\u201d, aimed at lowering client costs by redesigning the marketing supply chain with automation. In many ways, it\u2019s the AI-era upgrade to the group\u2019s \u201cfaster, better, cheaper\u201d mantra.\u00a0<\/p>\n
And it comes at a time when the business needs a new story.\u00a0<\/p>\n
The company cut its full-year revenue forecast for the second time this year, weighed down by client pullbacks amid global and uncertainty and U.S.-imposed tariffs. That pressure isn\u2019t likely to ease anytime soon but within the crisis, S4 sees an opening: with CMOs under growing pressure to do more with less, the logic goes, AI will take over more of the ad creation process, freeing up ad dollars that can be pushed downstream to media.\u00a0<\/p>\n
\u201cMy personal view is that once we know where tariffs will end up in 2026 we\u2019re going to see significant pressure from clients to reduce create costs and that\u2019s going to be a significant cost for us,\u201d said S4 Capital\u2019s founder and executive chairman Sir Martin Sorrell on the same call.<\/p>\n
Of course, there are still plenty of ifs, buts and maybes that need to align for that future to materialize. Still, the signals are hard to ignore.\u00a0<\/p>\n
L\u2019Oreal is now producing roughly 50,000 images and 500 videos per month using Google Cloud\u2019s Imagen 3 and Veo 2 technologies to scale creative across products and markets. Kraft Heinz used the same tools to cut down production on some assents from eight weeks to eight hours. Unilever said it now uses AI to create 400 creative assets per product for select brands in its beauty and wellbeing division.\u00a0<\/p>\n
\u201cWe think the industry is going to see a significant reduction in the proportion of create costs to media costs over time, driven by macroeconomic uncertainty, the tariffs and the need to be more efficient and disciplined,\u201d said Sorrell.<\/p>\n
At this stage, these comments are less a bold prediction than a reflection of where the market is headed.\u00a0<\/p>\n
To be fair, that direction has been visible for some time \u2013 its just that much of the industry wasn\u2019t ready to say it out loud. Now, that\u2019s shifting. What once felt speculative has become operational. Major advertisers \u2013 from Dell to Unilever, Mondelez to Klarna \u2013 are leaning more heavily into AI to speed up production and cut costs. S4\u2019s pitch is evolving in step with those economic realities.\u00a0<\/p>\n
But those economics are far from uniform.\u00a0<\/p>\n
For every CMO eager to automate, there are others hesitant \u2013 worried about quality, accountability or their own relevance in the value chain. Until more CMOs reconcile those tensions, S4\u2019s model will remain more ambition than outcome.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"S4 Capital has dropped the pretense. The company\u2019s top brass are now openly framing AI agents not as…\n","protected":false},"author":2,"featured_media":142465,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,43155,733,4308,86,56,54,55],"class_list":["post-142464","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-ai-revenue-generation","tag-artificial-intelligence","tag-artificialintelligence","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/142464","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=142464"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/142464\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/142465"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=142464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=142464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=142464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}