M&C Saatchi advertising & marketing assignments

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The second agency founded by what are still the world's most famous living admen, M&C Saatchi has built up a strong position for itself since formation in 1995 after Maurice and Charles Saatchi were ousted from their first agency Saatchi & Saatchi in a bitter boardroom row. Since then, M&C has risen to become one of the UK's foremost agencies, overtaking the original Saatchi business in domestic billings by the mid 2000s, and gradually establishing a global network which now stretches across 31 cities in 24 countries. Much of this expansion was achieved organically or through local joint venture partnerships. The group has a particularly strong presence in the Asia Pacific region, considerably less so in the Americas, though this was bolstered in 2014 with a minority investment in New York agency SS+K. However, the performance of individual agencies has often been stormy. M&C Saatchi Australia is one of the group's biggest after the UK but has been rocked since 2012 by a succession of big account losses and equally big gains. More serious still was the loss of M&C London's two biggest accounts in quick succession in early 2014, followed by an ill-conceived overhaul of local management. That proved disastrous, and it took several years for the group flagship to recover stability under a new team. Billings have yet to recover. Ranked as the UK's 3rd largest agency in 2007, it had slipped out of the Top 20 by 2015, before recovering to #18 for 2018. Nielsen (in Campaign) estimated billings that year of £96m.

In addition to the main advertising agency, the group operates a network of satellites in the UK offering more diversified services such as PR, mobile marketing, CRM and so on. The biggest of these, Walker Media, was sold in 2013 to Publicis, becoming Blue 449. CRM agency Lida was absorbed into the main agency in 2020. However, fashion PR Talk Global remains, along with sponsorship unit M&C Saatchi Sport & Entertainment, talent agency Merlin and several others. For 2018, the group reported billings of £610m, with net revenues of £255m, both best-ever figures. Net profit slipped back to £11m. The UK remains the engine room of the business, contributing more than a third of net revenues and just under half of profits. Asia & Australia is not far behind at 25% of revenues. However, a new set of problems emerged in 2019 with a decline in performance in several markets and an accounting investigation. Together these two factors promoted a dramatic plunge in M&C's share price, which halved in the space of just a single month. David Kershaw is group chief executive with Jeremy Sinclair as chairman. As turmoil raged within the group in December 2019, Maurice Saatchi resigned as an executive director of the group, apparently after a row with executive managers over strategy, and was followed by the CEO and chief creative officer of the London agency.

Capsule checked 13th November 2019

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Recent stories from Adbrands Update:

Adbrands Daily Update 16th Jan 2020: More changes at M&C Saatchi. The group's UK CRM agency Lida, one of the jewels in M&C's rather tarnished UK crown, is being merged into the main agency to create a single fully integrated business. Following the departure of Giles Hedger, managing director Camilla Kemp has moved up to chief executive of the merged entity, with Lida's Ben Golik replacing Justin Tindall as chief creative officer. The Lida name will be eliminated.

Adbrands Daily Update 18th Dec 2019: There was further turmoil at M&C Saatchi. A week after the resignation of Maurice Saatchi and the group's three non-executive directors, the two top managers at the London agency also departed. Chief executive Giles Hedger and chief creative officer Justin Tindall have both tendered their resignations. "I have decided to leave M&C Saatchi as part of the voluntary redundancy programme triggered by the loss of NatWest," said Hedger. "I have written to the agency to say that putting myself forward was the only fair and honourable thing to do. In doing so, I hope to spare others less senior than myself." Tindall added: "Following the recent announcement of a redundancy programme, it was unconscionable for me to make judgments about the livelihoods of others without putting myself forward first. As such, and with a heavy heart, I volunteered for redundancy." Local chairman Tim Duffy becomes interim CEO. A total of around 20 employees including Hedger and Tindall have left the agency under its voluntary redundancy programme.

Adbrands Daily Update 11th Dec 2019: The crisis at M&C Saatchi deepened with the resignation of Lord Maurice Saatchi from the board of directors, along with the group's three non-executive directors. In a brief statement, chairman Jeremy Sinclair said "We have accepted the decision of these Directors to resign. We are determined to restore the operational performance and profitability of the business and are already implementing all of the recommendations set out in the PwC report we announced last week. We had started a process to reconstruct our Board with new Independent Directors. This new Board will have a mandate to conduct a full review of all aspects of our governance." The Financial Times suggested the resignations were prompted by disagreements within the board over how to address the problems. "One significant point of contention," said the FT, "was the future of David Kershaw, the long-serving chief executive, whom some independent directors wanted to replace." M&C's share price has recovered slightly from last week's lows, to a little over £1, but the group's travails have stoked rumours of a takeover bid from Accenture or another opportunist buyer.

Adbrands Daily Update 5th Dec 2019: M&C Saatchi's share price plunged to its lowest level in a decade following a profit warning for the current year, exacerbated by the loss of key client NatWest to The & Partnership. Underlying profit before tax is expected to come in around 25% below last year "due to weaker than expected trading in the final quarter of the year and higher than expected central costs." Earlier this week, the group offered voluntary redundancy to all UK staff in an attempt to counter the impact of the NatWest account by cutting 20 staff positions. Separately, it announced the conclusion of its internal financial investigation with an adjustment of £11.6m against profits for last year and 2019. The share price fell by over 40% this week to below 80p, compared to £3.90 as recently as March. It had regained a little ground by the end of the week after its three most senior executives demonstrated their confidence in the business by investing around £1m between them to increase their own shareholdings.

Adbrands Daily Update 24th Sep 2019: M&C Saatchi's share price took another steep dive following weak results for the first half of the financial year, and a warning that its internal accounting investigation will continue until November. The agency's market valuation has more than halved since August. Net revenues for the six months to June fell 4% to £118m, while headline earnings plunged by 80% to £1m. Nevertheless, statutory reported profits more than quadrupled as a result of a large one -off gain from the sale of the group's remaining 25% stake in the former Walker Media, now Blue 449. The UK office performed well but there were sharp declines in both revenues and profits in Europe and the US.

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