Saatchi & Saatchi

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Saatchi & Saatchi is the smallest of the three main advertising networks within Publicis Groupe. It has enjoyed a strong run since its acquisition by Publicis, making the very most of its new-found security to win a string of important accounts. This finally allowed the agency to forget the troubles it endured during the previous decade. Once the core of Maurice and Charles Saatchi's world-beating marketing empire, Saatchi & Saatchi suffered serious setbacks in the early 1990s. Uncontrolled over-expansion led to the ousting of its founding brothers, and subsequent demerger from its corporate parent Cordiant. (The Saatchi brothers launched rival agency M&C Saatchi). After a brief period of independence, Saatchi & Saatchi was snapped up by Publicis in 2000. In 2007, the network was aligned within Publicis with stablemate Fallon under the umbrella name SSF Group. 

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Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 30th Mar 2017: Ads of the Week: "Free Yourself From Colours". Wanna see one of the starring ads from this year's as yet still-to-come ad festivals? Saatchi's Brazilian agency F Nazca S&S was one of the stars of the 2014 awards season for its last spot for Leica cameras, recreating famous still photographs. This one is even more astonishing, a hypnotic visual poem that's more arthouse movie than traditional commercial. An acquired taste perhaps. Yet for monochrome fetishists (like this writer) it's a thing of pure beauty. We hope you share the same tastes! We're betting the judges at Cannes will do. 

Adbrands Weekly Update 26th Jan 2017: Come on J Walter Thompson, pull yourself together. The venerable WPP-owned agency suffered a grim week with the loss of multiple significant accounts, not least demotion from top billing to supporting player on the global HSBC account. Saatchi & Saatchi, already a roster player for the bank's sponsorship and other regional briefs, takes over as global agency of record for consumer banking. In another intriguing switch, Renault transferred creative duties in Germany out of Publicis Worldwide - which retains the account elsewhere - and into sister agency Saatchi & Saatchi, which recently surrendered rival Toyota.

Adbrands Weekly Update 12th Jan 2017: Saatchi & Saatchi global CEO Robert Senior will step down from that role in April, to be succeeded by Magnus Djaba, though the latter will assume the title of president as a result of a new Groupe-wide policy. Counter to the general corporate trend whereby a CEO is perceived to be more senior than a President, Publicis global leaders, at least at lower levels within the Groupe, will now assume the title of President, while CEOs will have regional or country-specific positions. Senior will work out the remainder of his annual contract as strategic advisor to Publicis Communications global CEO - for some reason still apparently CEO not president - Arthur Sadoun. Senior's departure could be seen as another by-product of the reduced individual responsibility of existing Publicis Groupe agencies and their leaders under the new Publicis One structure.

Adbrands Weekly Update 12th Jan 2017: Ads of the Week: "Get HomeAway From It All". Thinking about holidays? This great global campaign from Saatchi & Saatchi London might just swing your decision in favour of HomeAway.com. But if you live in the US or Europe we'd better warn you upfront not to get too attached to the property featured in the ad, because it's not just HomeAway but also FarAway. In New Zealand to be precise. Nice to see Saatchi's London office delivering an ad for an American company that works on a truly global basis. Enjoy!

Adbrands Weekly Update 10th Nov 2016: In a significant blow to Saatchi & Saatchi and parent Publicis Groupe, Toyota has transferred its entire European integrated business into WPP-aligned CHI & Partners. Saatchi and CHI have been fierce rivals for the Toyota account for much of the past decade. Saatchi took charge of the business in 1993, but lost the UK account to CHI in 2007. It won the main account back two years later (though CHI retained Lexus), and has retained it ever since. Until now. In a further blow, Publicis-owned ZenithOptimedia will also lose responsibility for media to CHI's M/Six, a partnership with Mindshare. CHI is to launch a new bespoke agency to handle all creative, media, digital and content across Europe under the name CHI&Toyota. For Publicis, the loss represents a serious setback to its promise that 2017 will demonstrate the efficacy of its new Power of One set-up. With the exception of UK supermarket Asda, major account wins for the new model have been few and far between.


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Background

Free to all users | see full profile for current activities: Charles Saatchi took the first steps towards building the agency in 1967 when he and creative partner Ross Cramer left Collett Dickenson Pearce to set up their own shop, Cramer Saatchi. Although they had established a reputation as one of CDP's star creative teams, progress was comparatively slow at their new agency. However, Cramer Saatchi eventually began to attract considerable attention in 1970 for a series of blunt and provocative ads for the government's Health Education Council, including "pregnant man" and "what happens when a fly lands on your food". Cramer left the agency later the same year to become a film and commercials director, and to replace him Charles recruited his younger brother Maurice, previously an assistant publisher at Haymarket, the publishing company behind UK advertising industry trade paper Campaign. Cramer's name was replaced by Maurice's and Saatchi & Saatchi was born. Soon afterwards, Tim Bell was recruited to run the media side of the business. He quickly became Charles and Maurice's right-hand man, earning in the process an honorary nickname in the trade press as the "third brother" in the Saatchi & Saatchi empire. 

The agency relaunched with a bold manifesto to do away with the extravagant expense-account-fuelled excesses for which the industry was known, and focus instead on exceptional but cost-effective creativity. This was the area which Charles supervised, supported by a team of trusted lieutenants who tried to live up to his meticulous demands for excellence, and occasionally endured his fiery temper. Meanwhile Maurice set about designing and executing a bold and aggressive business plan to establish the agency as the biggest in London, if not the world. He began by breaking one of the key golden rules of the industry, namely that agencies did not poach each other's clients, but waited to be invited to a pitch by a prospective client. Ignoring such niceties, Saatchi drew up a shortlist of clients he wanted and began cold-calling them direct, asking for an opportunity to present.

Startling and original work for the automobile company British Leyland and Daily Mail newspaper as well as the Health Education Council quickly won them a reputation in the industry, and they consolidated this in 1975 by merging with Garland-Compton, the rather tired London affiliate of New York's Compton Advertising. In fact, strictly speaking it was Compton which acquired Saatchis, but the brothers insisted on keeping their names above the door, as well as the controlling 36% shareholding in the merged agency, Saatchi & Saatchi Garland-Compton. This gave the brothers a listing on the London Stock Exchange, and vaulted them from #13 to #5 in the market. It also gave them their first place on the roster of Procter & Gamble, a longstanding Compton client. At around the same time, they recruited a young accountant named Martin Sorrell to become finance director. By the end of the 1970s, the agency had risen further to become the country's #1 spot following the acquisitions of Hall Advertising and Roe & Partners, as well as the widely acclaimed "Labour Isn't Working" campaign for Margaret Thatcher's Conservative Party, which triumphed in the 1979 general election.

In 1981, the Saatchis added two further UK agencies, Dorland and Crawfords, then turned their attention to the US. In 1982 they bought out Garland-Compton's parent agency Compton Advertising for $57m, then added a series of other companies including McCaffrey & McCall and Yankelovich, before turning their attention to Ted Bates Worldwide. In 1986, the purchase of Bates for what was then an astronomical sum of $507m made Saatchi's the world's biggest advertising agency.

But that is where the plan started to go wrong. The huge payout to the outgoing Bates management team alienated many US clients; others were alarmed at the invasion by two unknown British upstarts. Bates clients RJR Nabisco, McDonald's, Michelob and Warner-Lambert all pulled their accounts in protest. There were also problems with the brothers' key advisors. In 1984, the original "third brother" Tim Bell, feeling increasingly marginalised within the expanding Saatchi empire and largely opposed to this breakneck expansion, jumped ship to Lowe Howard-Spink. Martin Sorrell, who had replaced Bell as the brothers' right-hand man, also had ideas of his own. Since the late-1970s, the Saatchis had depended on their finance director to manage the business end of their swashbuckling corporate style. But in 1986, he too left the agency to head up his own business, WPP. Meanwhile, to maintain the creative output of their agencies, the brothers had begun to offer vast salaries to attract new talent. One CDP copywriter, Jeff Seymour, was poached for what was then the unheard-of salary of £100,000. As a result, existing staff at Saatchi's and other agencies were quick to demand the same level of pay, a trend so marked that it led to the coining of a new industry term: "doing a Seymour". 

Amid this chaos, the day-to-day business of the group was largely neglected. Instead the brothers began to look beyond advertising, attempting the ill-conceived takeover first of troubled UK bank, Midland (subsequently bought by HSBC) and then investment bank Hill Samuel. In 1987, WPP actually outbid Saatchi's to buy J Walter Thompson. Even more galling was the decision by Margaret Thatcher to appoint Tim Bell, by now regarded by the brothers as an outcast and a traitor, to work with Saatchis' on the advertising for the Conservatives' new election campaign. Two years later, Saatchi's reported sharply reduced profits for the first time after 19 years of spectacular growth. The same year the group was overtaken by WPP as the world #1 when Sorrell bought Ogilvy & Mather. In an attempt to prevent any further decline in performance, the brothers agreed to hire a experienced financier to take over day-to-day management of the business. Robert Louis-Dreyfus was appointed as chief executive and launched an extensive cost-cutting programme as well as a rights issue to stabilize the group's substantial debts.

Recession followed, accompanied by the defection of several important clients. The group began selling assets, but it was not enough to solve the complicated internal financial problems of the group. Louis-Dreyfus left the company during 1993, but the board acted quickly to prevent the Saatchi brothers from taking back day-to-day control, insisting that they move out of their lavish corporate offices into the main Saatchi agency. At the end of the year, Charles Saatchi, who had played an increasingly marginal role in the business, was voted off the board of directors, although he retained a title of president-for-life. A year later, Maurice too was ousted David Herro, the lead fund manager at Saatchi & Saatchi's principal investors Harris Associates, led a motion to remove Maurice Saatchi from the board, offering him instead a much diminished role as head of the Saatchi & Saatchi advertising agency. Not surprisingly he refused, and he and Charles offered their resignations immediately afterwards. Their departure also prompted the resignation of their three key lieutenants, the so-called "three amigos" of Jeremy Sinclair, Bill Muirhead and David Kershaw. This almost led to an even greater crisis when several major clients threatened to back the brothers rather than their former agency. In the end, five major clients followed Charles and Maurice to their new agency M&C Saatchi - Gallaher and Mirror Group immediately, British Airways, Dixons Group and the Conservative Party later the same year. However, the fracas also led to Mars pulling its entire $400m account from sister agency Bates (only part of it later ended up with M&C Saatchi). 

Early the following year the group changed its name to Cordiant to reflect its new identity, and Saatchi's bolstered its offering with a minor acquisition. Laing Henry was absorbed by the group in early 1995 as part of a deal to secure its CEO Jennifer Laing as the new head of the Saatchi & Saatchi agency in London, replacing David Kershaw. But although it regained its stability quite quickly without Maurice and Charles Saatchi, some of the agency's lustre had gone as well. In 1996, it lost its position as the UK's biggest agency by billings for the first time since 1988. A year later, to allow its two networks to compete more effectively with each other, Cordiant hived off Saatchi & Saatchi into an entirely separate company, with group chairman Bob Seelert transferring to the new company, and appointing Kevin Roberts, a former P&G alumnus, as Saatchi's new CEO. 

In truth, little remained of the 1980s-style Saatchi & Saatchi following its spin-off as an independent. But instead the business regained the hunger and creativity that had made it such a force to be reckoned with in the first place. New CEO Kevin Roberts stated that his new aim was to establish "the hottest ideas shop on the planet", quoting innovation and originality as his main goals. This resulted in a reshuffling of personnel, with a particular focus on boosting the creative output of the London office. (It also led to websites dedicated entirely to the thoughts and actions of CEO Roberts and creative director Bob Isherwood.) 

However the agency's smaller size made it a potentially tasty takeover target for the big marketing services groups looking to bolster their portfolios. In 1999, rumours began to circulate that Saatchi's was in talks with True North Communications about a possible buyout. But leaked reports which showed True North in a state of some internal disarray put those negotiations on hold. Saatchi's was soon immersed in a scandal of its own, New Zealand's so-called "Dinnergate". In August 1998, CEO Roberts, for several years a New Zealand citizen, had dinner with that country's prime minister Jenny Shipley. They met again the following day, and then suddenly a few weeks later the New Zealand tourist board won a huge increase in its marketing budget, when other government departments were having budgets cut. Most of this was earmarked for a new ad campaign. The tourist board's agency? None other than Saatchi & Saatchi. The New Zealand parliament was outraged by this apparently unlikely coincidence and called for Shipley's resignation. Instead, it was Saatchi's who got the sack. There was no shortage of irony in the fact that the tourist board shifted the account to M&C Saatchi instead.

Despite these distractions, the group reported strong results for its first full year since demerger. Revenues were up more than 9% at constant exchange rates to £363m, while pre-tax profits were up more than 30% to £31m. The agency won $500m of new billings in 1998. Later that year it scored a key account win, with the $120 pan-European account for Sony, across all products except games. The Sony win was well-timed. A month later Delta Airlines shifted their $100m US account from Saatchi to Leo Burnett. But the new century began on a high when Procter & Gamble gave Saatchi's the $145m worldwide account for Iams, a petfood it had acquired the previous summer. Speculation over merger negotiations were resolved in June 2000 when Publicis acquired the group with a bid of $2bn. Kevin Roberts later revealed that he had also been involved in discussions with famed management consultancy McKinsey & Co, but negotiations foundered over the financial structure of any deal.

Prior to its acquisition by Publicis, the Saatchi & Saatchi advertising group had also housed several other units, but most of these were spun off into other groups. Strategic communications agency Rowland Worldwide was realigned with Publicis Consultants; and the Healthcare Resources Group, including Klemtner Advertising and Saatchi & Saatchi Healthcare, became part of what is now Publicis Healthcare. Interactive agencies Darwin Digital and Red Kite New Media were grouped under newly formed division Carbon: Saatchi & Saatchi in early 2001, but later shut down. 

Since its acquisition, Saatchi has proved a happy member of the greatly expanded Publicis group. There was one major upheaval in early 2005, however, when 17 staff members abruptly quit the New York office of Saatchi's en masse, seemingly as a reaction to the dismissal of Mike Burns, worldwide account director on Saatchi's General Mills account. The departing employees had also all worked on the General Mills account, and the team was later reported to be negotiating to join Interpublic, heightening speculation that the food company's business could at some point follow them. However an emergency consultation with General Mills by Saatchi New York's recently appointed president Mary Baglivo and group CEO Kevin Roberts appeared to save the day. Later, Saatchi issued a lawsuit against Burns, which claimed he had violated his duties to the agency by badmouthing it to other employees and to clients after he was passed over for Baglivo's role. The so-called Saatchi 17 resignees eventually formed creative agency OneSeven under Interpublic's wing, but it was later shut down after winning little business.

Tony Granger, chief creative officer of Saatchi's NY office jumped ship at the end of 2007 to join Y&R. He was replaced for three years by Gerry Graf, but he too resigned in 2010 to launch his own independent shop. Con Williamson took over as CCO towards the end of the year. See full profile for current activities


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