Whilst overhyped, the metaverse will fundamentally change business and entertainment, according to S4 Capital’s Executive Chairman Sir Martin Sorrell. 

Speaking to New Digital Age Editor Justin Pearse at MAD//Fest London last month, Sir Martin told attendees that whilst the revenue associated with S4’s metaverse activities remains small, the nascent channel is increasingly important to clients, partners and the agency group's strategic direction.

“The metaverse is super important.  We've done heavy work for the NBA and Verizon, streaming 56 basketball games in three seasons. We’ve done huge pop music concerts in the metaverse, some really interesting training and education initiatives and ecommerce applications.

“The work from home application is huge. We already use it (the metaverse) for our internal management meetings. The headwear and tolerance for long meetings wearing the headwear is getting better and better.

"We're in the foothills here but it will be huge, and it's right to get excited about it. It's a very sexy area, which people are really interested in. And we're gonna play,” he added.

The need for perspective

Whilst Sir Martin is optimistic about the metaverse's potential, during the expressed a need for perspective given that metaverse related activities currently account for a tiny proportion of S4’s revenue.

“Where it may have been overhyped is not in its long term importance or significance as another channel, but in its initial take up. Take us as an example. We did $900 million of revenue last year. We're scheduled to do $1.2-1.3bn this year. Of that delta - the $300-400 million increase - I would say roughly $30-40m of revenue is coming from the metaverse. So it's about 10%, the increment. But of the overall figure, it's only 3 or 4%."

Meta To Face Intense Metaverse Competition

Sir Martin also predicted that Meta would face much stiffer challenges in the metaverse than Facebook experienced during the rise of social media, where Google and Amazon were its primary competitors in Western markets.

“The metaverse is going to be much more competitive for Meta than its traditional areas. Meta may have named the area but  Roblox, Intel, Apple, Microsoft - all these companies are going to get heavily involved.”

Sir Martin's full MAD//Fest London interview, which also covered topics including the need for a new agency model, digital growth and the ad industry’s diversity issues, is available here on our YouTube channel. The channel features all the MAD//Fest content, including sessions with Comedian/Broadcaster David Baddiel, Deliveroo VP Global Marketing Tina Koehler and Diageo CMO Cristina Diezhandino.