Saatchi & Saatchi
Encyclopedia
Saatchi & Saatchi is a global advertising agency
network with 140 offices in 80 countries and over 6,500 staff. It was founded in London in 1970 but now headquartered in New York. The parent company of the agency group was known as Saatchi & Saatchi PLC from 1976 to 1994, was listed on the London Stock Exchange
until 2000 and for a time, was a constituent of the FTSE 100 Index
. In 2000, the group was acquired by the Publicis
Groupe.
(now Lord Saatchi) and art collector Charles
in 1970. Following stints starting as a copywriter at the London offices of Benton & Bowles
in 1965, then at Collett Dickenson Pearce
and John Collins & Partners, Charles Saatchi teamed up with Art director
Ross Cramer and the genesis of what would become Saatchi & Saatchi was born in London in 1967 as the creative consultancy CramerSaatchi. The consultancy took on employees John Hegarty
and Jeremy Sinclair and began to work direct for clients. It was Sinclair's "Pregnant Man" ad for the Health Education Council which first set tongues wagging about the small agency. Charles' younger brother Maurice joined the business in 1970 after Cramer's departure whereupon it was renamed "Saatchi and Saatchi" and developed into a full-service advertising agency.
Noted work included their campaign "Labour isn't working" on behalf of the Conservative Party
before the 1979 UK
general election
and ongoing campaigns for British Airways
, and Silk Cut
with whom the agency had long relationships. The agency was seen as producing breakthrough creative work with a bold attitude and employed people who went on to be stars of their industry including Sir John Hegarty, Lord Tim Bell and Sir Martin Sorrell
.
From the outset and even as their creative reputation was still forming, the Saatchi brothers set upon a ferocious course of business acquisitions. With the reverse take-over of the Compton agency in 1976 they achieved a Public company
listing and were thereafter able to make Rights issue
s to raise the capital required for their acquisition drive. The push was less about removing competition than about adding to their offering of professional marketing services beyond advertising and later, an international expansion drive – particularly into the US. Between 1972 and 1987 over 35 marketing services businesses were acquired, including 4 significant ad agency networks.
Scarcely any of the growth of the Saatchi & Saatchi PLC was organic with the only start-ups being The Sales Promotion Agency in 1980 and Financial Dynamics PR in 1986. Whilst their foundation London office was consistently successful in winning new clients, it too was propelled forward in the 1976 merger with the UK operation of the larger Garland-Compton business resulting in its tripling of size and a relocation into the Compton premises. Goldman quotes executives of acquired entities including David McCall (McCaffrey & McCall) and Alan Siegel (Siegel+Gale) saying that they never met Charles Saatchi and that neither brother nor other group management had any involvement in their business after acquisition. There was no drive to achieve back-office economies; no systemisation of process/administration and no cross referrals of inter-group business.
and her husband. The initial shareholding was 15% Cannon Holdings (Quant & friends); 42% Charles; 38% Maurice; 2.5% John Hegarty; 2.5% Tim Bell. The company was profitable in its first year. To achieve the first large merger (Garland Compton in 1975) the brothers sold their interest in their business for shares, receiving 36% of the enlarged group, while Compton U.S.A owned 26% and 38% was held by public shareholders. The Compton UK listed status meant that the Saatchi & Saatchi business could now issue stock and the capital for the subsequent acquisitions was raised by giving existing shareholders the first rights to purchase new stock at a discount.
Commonly the acquisitions used a part cash up-front/ part earn-out mechanism as perfected by Martin Sorrell
. The 1982 acquisition of Compton's US business, for instance outlaid $29.2M in cash and another $27.6M to be paid over ten years if the agency achieved after-tax profits of $4.07M. The rights issue to raise the $29.2M watered down the brothers' holding to 18% of the combined group.
From June 1988 (see next section), the company began to use redeemable preference shares
to raise capital. These securities look like equity and were classified as such on the company's balance sheet
but since a failure of the company's share price to rise above a pre-determined threshold at a nominated forward date would enable the preference holders to put
their stock back to he company, these instruments were in truth more like interest-paying debt.
(billings $96M), Michelob (billings $38M), Ralston (billings $12M) and McDonald's
(billings $8M) all pulled their accounts in the months following that acquisition. Colgate-Palmolive
assignments were also pulled from Bates at the same time as their direct competitor Procter & Gamble
were pulling business from Saatchi & Saatchi Compton and DFS Dorland due to their conflict concerns. However the London ad agency was still the number one in the profits in the UK in 1987 and the Worldwide Group was performing financially with Saatchi & Saatchi Company PLC recording its seventeenth year of consecutive growth with profits of £124.1M up from the 1986's £70.1M. The Group expanded its public listings to include the Paris Bourse
and the New York Stock Exchange
.
The brothers in 1987 made their boldest move to date when they made plans for a take over run of the ailing Midland Bank
, Britain's 4th largest bank at the time with 2,100 UK branches. The bank's Board rejected the offer in September 1987, openly questioned the qualifications of the Saatchis to be running a bank and may have leaked details of the bid to the press. In the same month Maurice Saatchi met with Board executives of the Hill Samuel
merchant bank
to discuss an acquisition. Once the financial press became aware of the moves the brothers became the subject of unprecedented ridicule with the criticisms focussed on the notion that bank customers, staff and shareholders would be able to make no sense of their bank being part of an ad agency group. The City
's reaction was swift and in mid-September 1987 the Saatchi & Saatchi share price fell 6.2% in two days.
On 19 October 1987, the world stockmarkets crashed
. Saatchi & Saatchi stock fell by 1/3 in twenty-four hours and by mid-October was at £5.48 down from £6.70 in mid-September and £7.05 high of 1987. As a result of the perceptions lingering after the Midland Bank discussions, on top of the general nervousness that followed the crash
, by 1988 Saatchi & Saatchi Plc was unable to use its previously reliable rights issue method to raise the capital it needed to continue its acquisition drive. In June 1988, the company issued £176.5M of convertible preference shares
at £4.41 each to fund its acquisition of the Gartner Group an information technology market research firm. If Saatchi PLC shares didn't go above £4.41 by July 1993, the holders could put the shares back to the company at £4.41 plus a 25% bonus. Saatchi & Saatchi PLC stood to owe £211M for the £176.5M of capital raised.
Profits were up 11% in 1988 to £138M but in 1989 the Group had to report its first ever decline after eighteen years of growth when the profit dropped dramatically to £21.8M. When this was forewarned at the March 1989 Annual general meeting
the share price dropped promptly by £0.6 to £3.20 or 16%. Between January and May 1989, 6% of the workforce or 800 employees were laid off, by the end of 1993 that number had grown to 7,000. In June 1989, Saatchi and Saatchi announced its intention to sell off its entire consulting division and to focus on advertising and related services. Later that year Robert Louis-Dreyfus
was appointed as CEO of the listed company. He effected the sale of a number of businesses (the consultancies Infocom and Hay Consulting would collectively sell for half their initial purchase price) and presided over a major re-structuring of the company until his departure in mid-1992. His successor was Charles Scott, who had joined the business with Louis-Dreyfus in 1989 as Finance Director. He continued the cost-cutting and consolidation drive but found himself in regular disagreement with Maurice Saatchi and the two executives sometimes conducted their spat via press leaks and stories which found their way into the papers.
controlled a 9.6% holding in Saatchi & Saatchi managed by Herro. He maintained dialogue with his former employer the State of Wisconsin Investment Board which had built up an 8.1% holding during Herro's time there and with colleagues at the General Electric Investment Corpn which held 5%. Herro became concerned in 1992 at the negative effect on the investment of the public bickering between Scott and Maurice Saatchi and made this view known to the Board along with his intention to monitor the business closely.
In late 1994, Herro expressed his view (and that of his associate shareholders) to the Board of Saatchi & Saatchi PLC that Maurice should be dismissed as Chairman due to his tardiness in reducing costs by maintaining expensive corporate offices at Berkeley Square
for too long; Maurice's expressed intention to perhaps launch a takeover/partial takeover; his insistence on a new incentive/option plan which Herro saw as structured to Maurice's favour. In December 1994, the Board succumbed to shareholder pressure and sacked Maurice as Chairman. Within a month senior executives Jeremy Sinclair, Bill Muirhead, David Kershaw, Moray McLennan, Nick Hurrell, Simon Dicketts and James Lowther would all also resign and join Maurice Saatchi in a new business which would become known as M&C Saatchi
. Charles Saatchi, other Saatchis staff and some consequential clients would follow including Gallaher Group
, Mirror Newspapers
, the retailer Dixons and after a competitive pitch, British Airways
.
saw a period of turmoil for the agency, as key figureheads from the London office joined the defection to the new entity. At this point, nearly £40 million of revenue left the agency, with a further £11 million spent on severance and litigation against the staff members who left.
In 1995, Saatchi & Saatchi PLC was renamed the Cordiant Communications Group
and the subsidiary businesses split into two main groupings: Research or Advertising. The Saatchi & Saatchi Advertising network formed the keystone of the latter. The acquisition frenzy that characterised the agency throughout the 1980s was taken to task under the new management system. This led to a number of agency assets being sold, including the Fitch design company (to the WPP group), management consultants The Hay Group and a number of the other 383 offices around the world that had been acquired in the 1980s.
After the 1995 shakeout, the key imperative for the new owners was to manage the relationships with Saatchi & Saatchi's blue-chip client base, which at this point included decades-old partnerships with the Campbell Soup Company
, Hewlett-Packard
, Johnson & Johnson
, Procter & Gamble
, DuPont
, Philip Morris
and General Mills
. The strength of these relationship were the legacy of the earlier acquiistions of Compton, of Bates Worldwide and of Dancer Fitzgerald Sample
whose relationship with Procter & Gamble
had stood since the 1920s. While the British Airways
and Mars
defections in 1995 destabilised the agency's reputation in London, it seemed not to affect operations in its biggest market, the United States. The growth of its new healthcare arm in New York City and increased spending from its West Coast auto clients Toyota and Lexus
enabled a period of steady growth for its American operations.
In 1997, Saatchi & Saatchi officially dropped "Advertising" from its name. This was part of an imperative installed by Kevin Roberts
, a beverage marketing veteran brought in to revive the agency's fortunes. A significant decision of his was to move the global headquarters of the agency from its Charlotte Street, London address to its Hudson St, New York City office. Newly dubbed an 'ideas company' by Roberts, the agency sought to usher its resources towards the internet, still very much in its infancy in the 1997.
or Omnicom, Saatchi & Saatchi joined the Publicis Groupe, a global marketing concern based in Paris, France. Publicis kept Roberts as CEO, content with his vision for an 'ideas agency'. Saatchi & Saatchi still underwent some turmoil throughout this time, as the dot-com bubble
saw the closure of its San Francisco office, which effectively ended its 15-year relationship with the Hewlett-Packard
company. The account was subsequently split between a Publicis agency and creative agency Goodby, Silverstein and Partners. Johnson & Johnson
also decided to review its relationship, withdrawing its $US100m Tylenol
account from the New York office. A few months later, InBev
announced that its Beck's
Beer account would shift to Leo Burnett after only a year at the agency. As a result, Roberts committed to building revenue through its existing clients, which led to additional assignments, with Saatchi Los Angeles securing new accounts such as Pur Filtered Water and Millstone Gourmet Coffee. Efforts were also made to shore up the Los Angeles office after it missed a $US40m brief for Toyota's Scion, a new sub-brand targeted at youth, which was given to San Francisco-based Attik, a hybrid creative agency.
Despite these losses, this strategy gave rise to the Lovemark
s philosophy — a theory espoused in a book by the same name released by Roberts. While this met with scepticism in the advertising world, Roberts was vindicated in 2006 when he secured nearly $US700m worth of billings from two clients, Wendy's
and department store JC Penney. Subsequent additions to the New York office, such as the New York Tourism Board and Cold Stone Creamery
have been described by both client and agency as 'being due to a strong belief in the Lovemarks' philosophy. Despite this, after only a year with the agency, Wendy's decided to pull the majority of its business into another roster agency, Kirshenbaum Bond & Partners, after complaints from Wendy Thomas (the namesake of the restaurant) who did not take kindly to her likeness being used in the advertising.
In 2005, critics complained that in creating a £20 million campaign for a new Brazil
ian spirit
the agency spray-painted graffiti
images on walls and buildings in the East End of London
.
Dr Martens CEO David Suddens decided to fire Saatchi & Saatchi as their advertiser on 24 May 2007. This was because of a one-time advertisement that used a picture of 1990's music icon Kurt Cobain
without the permission of Courtney Love
, Cobain's widow. In its defense, Saatchi released a statement indicating their regret of Dr Marten's decision to terminate their services with them but emphasizing that they believed that the advertisement was deliberately edgy but not offensive.
Although the agency had gained early fame for its "Labour isn't working" advertising for the Conservative Party in 1979, in 2007 it was appointed the advertising agency for the Labour Party
.
and JC Penney to the American client roster reaffirmed Roberts' belief in the 'ideas agency' model, the London office continued its slide as it plummeted out of the UK Top 10 list of agencies (a list, compiled by industry magazine Campaign UK, based on reported client billings). In early 2007, the London office saw the bulk of its work for Toyota UK and Europe leave to upstart agency CHI & Partners, just months after it had lost the entire Lexus
business to the same agency. Late 2006 saw the return of some Toyota business, including the £60m pan-European launch of the Auris
, Toyota's Corolla
successor.
In July 2007, it was announced by Publicis chief Maurice Levy that Saatchi & Saatchi would form a new business alliance with sister agency Fallon. Fallon, part-owned by Publicis, has enjoyed similar mixed success with its network of offices. While its London office, with a client list that includes Sony, Orange and Asda, has been consistently lauded for its new business and creative success, its Minneapolis headquarters, where namesake founder Pat Fallon remains a presence, has been tarnished by a number of client losses, including Citigroup
, BMW
, Sony
, Dyson
and Starbucks
.
The new alliance, known as Saatchi & Saatchi-Fallon (SSF Group), will operate under the supervision of Kevin Roberts, who was named as CEO of the new entity. Reporting to him is Robert Senior, one of the original partners of Fallon London, who will preside over the Europe & UK operations of the alliance, including both Saatchi and Fallon offices in London. In early 2008, Chris Foster, a Saatchi veteran of nearly a decade, was appointed to become the new CEO of Fallon's Minneapolis office, fuelling speculation that Fallon will become a new Procter & Gamble
or General Mills
roster agency.
After a year of operations, it was announced in October 2008 that the SSF Group had been contracted by chocolate giant Cadbury to handle its Dairy Milk
and related brands across several markets (including the UK, Europe
, Russia
, Canada
and the United States
), with a reported total of $US200m in billings. Whilst Fallon London would lead creative efforts across Europe, Saatchi's New York office was handed the brief to handle the business in the United States, where Cadbury remains a relative unknown compared to its main competitor, Hershey
.
. Its other main office, in the United States
, is located in Torrance, California
. In the US, Saatchi's largest clients are Toyota, Procter & Gamble
and General Mills
.
The London
office, the home of the original agency, is on Charlotte Street and has its own pub, named "The Pregnant Man" after the firm's first famous ad. London is often the base for many of Saatchi's pan-European accounts, which include Toshiba
, Sony Ericsson
, and VISA
. The company's motto Nothing is Impossible is famously engraved into the steps of the Charlotte Street office. Saatchi's worldwide CEO is Kevin Roberts
.
Saatchi & Saatchi also frequently recruits in unusual ways by asking applicants to participate in competitive exercises such as to make facebook groups and compete for who gets most members.
and Procter & Gamble
.
A competition organised by the former Saatchi & Saatchi 2009 interns in London to win an internship at the firm led to the formation of the Secret London
Facebook
Group, and the associated website.
earlier defended the ads. Fans were more outspoken, flooding Backing Black's official Facebook site with messages of disgust. Even Prime Minister John Key
said the campaign was evidence not all advertising dollars were well spent.
developed during their work on her 1979 and 1983 campaigns. He had a falling out with the brothers in 1985 and left to join Frank Lowe
and an offer of his name on the door at Lowe, Howard-Spinke and Bell (now Lowe Worldwide
).
(1940–2008) was an Executive Creative Director at the company between 1987 and 1995 working on British Airways
, Anchor Butter, Toyota, Ryvita
, Nivea
, Trust House Forte, Alexon Group
and Fuji
among others. His British Airways campaigns continue to be remembered as one of the greatest advertising campaigns of all time, changing the fortunes of the airline.
The Independent
said that "Arden was the ringmaster behind the whole creative circus that saw British Airways
become "The World's Favourite Airline", The Independent become the new intelligentsia's favourite newspaper, Margaret Thatcher
the nation's favourite leader and Silk Cut
their favourite fag." The Times says he was a "tempestuous advertising director who thought up memorable campaigns for Silk Cut, BA and The Independent". Arden left the employment of Saatchi & Saatchi in 1992, but remained a key consultant for the agency until 1995. He died in 2008.
(born 1945), joined Saatchi & Saatchi in 1975 at the time of their reverse takeover of Compton. He was Group Finance Director from 1977 until 1984. He designed and executed the company's significant acquisition drive during that time, refining and using the mechanism of the earn out
.,
(1946–2009) was the grandson of Leopold Dreyfus founder of S.A Louis-Dreyfus et Cie, once France's largest private firm and one of the world's largest grain trading companies. He met the Saatchis when they were looking to acquire IMS, the US pharmaceutical research company where Louis-Dreyfus was CEO. The business was eventually sold to Dun & Bradstreet
and Louis-Dreyfus retired aged 42. He was lured back to corporate life to the role of CEO of Saatchi & Saatchi PLC from 1989 to 1993. He went on to be successful as CEO in a turn-around role at Adidas-Salomon from 1994 to 2001.
Advertising agency
An advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising for its clients. An ad agency is independent from the client and provides an outside point of view to the effort of selling the client's products or services...
network with 140 offices in 80 countries and over 6,500 staff. It was founded in London in 1970 but now headquartered in New York. The parent company of the agency group was known as Saatchi & Saatchi PLC from 1976 to 1994, was listed on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
until 2000 and for a time, was a constituent of the FTSE 100 Index
FTSE 100 Index
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the footsie , is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange....
. In 2000, the group was acquired by the Publicis
Publicis
Publicis Groupe is a French multinational advertising and communications company, headquartered in Paris, France. It is one of the world's three largest advertising holding companies . Its current president is Maurice Lévy. Publicis Groupe S.A...
Groupe.
Early years
Saatchi & Saatchi was founded by brothers MauriceMaurice Saatchi, Baron Saatchi
Maurice Nathan Saatchi, Baron Saatchi is the co-founder, with his brother Charles, of the advertising agencies Saatchi and Saatchi and M&C Saatchi, where he currently serves as Executive Director.- Early life :...
(now Lord Saatchi) and art collector Charles
Charles Saatchi
Charles Saatchi is the co-founder with his brother Maurice of the global advertising agency Saatchi & Saatchi, and led that business - the world's largest advertising agency in the 1980s - until they were forced out in 1995. In the same year the Saatchi brothers formed a new agency called M&C...
in 1970. Following stints starting as a copywriter at the London offices of Benton & Bowles
Benton & Bowles
Benton & Bowles was a New York-based advertising agency founded by William Benton and Chester Bowles in 1929.-History:The agency's success was closely related to the rise in popularity of radio. Benton & Bowles invented the radio soap opera to promote their clients' products, and by 1936 were...
in 1965, then at Collett Dickenson Pearce
Collett Dickenson Pearce
Collett Dickenson Pearce & Partners emerged from the "Swinging London" cultural shifts of the 1960s as Britain's most glamorous and influential advertising agency, generally regarded as one of the finest advertising agencies in the world during the 1970s...
and John Collins & Partners, Charles Saatchi teamed up with Art director
Art director
The art director is a person who supervise the creative process of a design.The term 'art director' is a blanket title for a variety of similar job functions in advertising, publishing, film and television, the Internet, and video games....
Ross Cramer and the genesis of what would become Saatchi & Saatchi was born in London in 1967 as the creative consultancy CramerSaatchi. The consultancy took on employees John Hegarty
Bartle Bogle Hegarty
Bartle Bogle Hegarty is a British advertising agency, responsible for some notable advertising campaigns of the last 30 years. The company was founded by John Bartle, Nigel Bogle & Sir John Hegarty in 1982. Sir John Hegarty and Nigel Bogle still lead it today, together with worldwide CEO Simon...
and Jeremy Sinclair and began to work direct for clients. It was Sinclair's "Pregnant Man" ad for the Health Education Council which first set tongues wagging about the small agency. Charles' younger brother Maurice joined the business in 1970 after Cramer's departure whereupon it was renamed "Saatchi and Saatchi" and developed into a full-service advertising agency.
Noted work included their campaign "Labour isn't working" on behalf of the Conservative Party
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
before the 1979 UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
general election
United Kingdom general election, 1979
The United Kingdom general election of 1979 was held on 3 May 1979 to elect 635 members to the British House of Commons. The Conservative Party, led by Margaret Thatcher ousted the incumbent Labour government of James Callaghan with a parliamentary majority of 43 seats...
and ongoing campaigns for British Airways
British Airways
British Airways is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. British Airways is the largest airline in the UK based on fleet size, international flights and international destinations...
, and Silk Cut
Silk Cut
Silk Cut is brand of low tar cigarette produced by the Gallaher Group. The packaging is characterised by a distinctive stark white packet with the brand name in a purple, blue, red, silver, white or green square....
with whom the agency had long relationships. The agency was seen as producing breakthrough creative work with a bold attitude and employed people who went on to be stars of their industry including Sir John Hegarty, Lord Tim Bell and Sir Martin Sorrell
Martin Sorrell
Sir Martin Sorrell is an English businessman and the chief executive officer of WPP Group. He has served in that role since he started the company.-Biography:...
.
From the outset and even as their creative reputation was still forming, the Saatchi brothers set upon a ferocious course of business acquisitions. With the reverse take-over of the Compton agency in 1976 they achieved a Public company
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
listing and were thereafter able to make Rights issue
Rights issue
A rights issue is an issue of additional shares by a company to raise capital under a seasoned equity offering. The rights issue is a special form of shelf offering or shelf registration. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from...
s to raise the capital required for their acquisition drive. The push was less about removing competition than about adding to their offering of professional marketing services beyond advertising and later, an international expansion drive – particularly into the US. Between 1972 and 1987 over 35 marketing services businesses were acquired, including 4 significant ad agency networks.
| Year | Company | Location | Business | Price |
|---|---|---|---|---|
| 1972 | Brogan Developers | U.K | Property Development | |
| 1972 | E.G Dawes | Manchester | Ad Agency | |
| 1972 | Notley Advertising | London | Ad Agency | |
| 1974 | George J Smith | London | Ad Agency | £90K |
| 1976 | Garland-Compton | U.K | Ad Agency | (Merger) |
| 1978 | Hall Advertising | Edinburgh, Scotland | Ad Agency | £1M |
| 1979 | O'Kennedy-Brindley, | Dublin, Ireland | Ad Agency | £300K |
| 1981 | Dorland | U.K | Ad Agency | £7M |
| 1982 | Garland-Compton | U.S.A | Ad Agency | £56.8M |
| 1983 | McCaffrey & McCall | U.S.A | Ad Agency | £20M |
| 1983 | Hunter Advertising | Dublin, Ireland | ||
| 1983 | Gough Waterhouse | Sydney & Melbourne | Ad Agency | |
| 1984 | Cochrane, Chase, Livingstone | California | ||
| 1984 | Michael Bungey DFS | |||
| 1984 | R.J.A | The Netherlands | ||
| 1984 | Harrison Crowley | U.K | ||
| 1984 | Yankelovich Skelly & White Daniel Yankelovich Daniel Yankelovich is a public opinion analyst and social scientist.-Education:After attending Boston Latin School, Yankelovich graduated from Harvard University in 1946 and 1950 before completing postgraduate studies at the Sorbonne in France. As a psychology professor he has taught at New York... |
U.S.A | Market Research | |
| 1984 | McBer & Co | U.S.A | Market Research | |
| 1984 | The Hay Group | Global | Management Consultancy | $125M |
| 1984 | Hedger Mitchell Stark | London | Ad Agency | £3M |
| 1985 | Siegel & Gale | New York | Corporate Branding | |
| 1985 | Marlboro Marketing | New York | Sales Promotion | |
| 1985 | The Kleid Company | New York | Mailing List Broker | |
| 1985 | Wong Lam | Hong Kong | ||
| 1985 | Hayhurst | Canada | ||
| 1985 | Campaign | New Zealand | ||
| 1985 | Sharps | U.K | ||
| 1985 | Granfield Rork Collins | London | £10M | |
| 1985 | Humphreys Bull & Barker | London | Ad Agency | |
| 1985 | The Rowland Company, | New York | Public Relations | $10M + earnout |
| 1985 | Infocom Group | I.T Consulting | US$31M | |
| 1985 | Clancy Shulman Associates | U.S.A | ||
| 1985 | Kingsway Public Relations | U.K | ||
| 1986 | Dancer Fitzgerald Sample Dancer Fitzgerald Sample Dancer Fitzgerald Sample was a top tier Madison Avenue advertising agency during the 20th century originally founded in Chicago in 1923. It was acquired and merged into the Saatchi & Saatchi network in the 1980s.-History:... |
Worldwide | Ad Agency network | US$75M |
| 1986 | Backer & Spielvogel | U.S.A | Ad Agency network | US$101M |
| 1986 | Ted Bates | U.S & Asia | Ad Agency network | US$500M |
| 1986 | Peterson & Co | U.S.A | Trial litigation advisers | US$123M |
| 1986 | Campbell Mithun | Minnesota, U.S | Ad Agency | |
| 1987 | Cleveland Consulting Assoc | U.S.A | Management Consultants | |
| 1988 | Gartner Group | Connecticut, U.S | I.T Market Research | US$77.4 |
Scarcely any of the growth of the Saatchi & Saatchi PLC was organic with the only start-ups being The Sales Promotion Agency in 1980 and Financial Dynamics PR in 1986. Whilst their foundation London office was consistently successful in winning new clients, it too was propelled forward in the 1976 merger with the UK operation of the larger Garland-Compton business resulting in its tripling of size and a relocation into the Compton premises. Goldman quotes executives of acquired entities including David McCall (McCaffrey & McCall) and Alan Siegel (Siegel+Gale) saying that they never met Charles Saatchi and that neither brother nor other group management had any involvement in their business after acquisition. There was no drive to achieve back-office economies; no systemisation of process/administration and no cross referrals of inter-group business.
Financial mechanisms
At its foundation in 1970 Saatchi & Saatchi was financed with £100,000 of capital from the brothers and some backers including the designer Mary QuantMary Quant
Mary Quant OBE FCSD is a British] fashion designer and British fashion icon, who was instrumental in the mod fashion movement. She was one of the designers who took credit for inventing the miniskirt and hot pants. Born in Blackheath, London, to Welsh parents, Quant brought fun and fantasy to...
and her husband. The initial shareholding was 15% Cannon Holdings (Quant & friends); 42% Charles; 38% Maurice; 2.5% John Hegarty; 2.5% Tim Bell. The company was profitable in its first year. To achieve the first large merger (Garland Compton in 1975) the brothers sold their interest in their business for shares, receiving 36% of the enlarged group, while Compton U.S.A owned 26% and 38% was held by public shareholders. The Compton UK listed status meant that the Saatchi & Saatchi business could now issue stock and the capital for the subsequent acquisitions was raised by giving existing shareholders the first rights to purchase new stock at a discount.
Commonly the acquisitions used a part cash up-front/ part earn-out mechanism as perfected by Martin Sorrell
Martin Sorrell
Sir Martin Sorrell is an English businessman and the chief executive officer of WPP Group. He has served in that role since he started the company.-Biography:...
. The 1982 acquisition of Compton's US business, for instance outlaid $29.2M in cash and another $27.6M to be paid over ten years if the agency achieved after-tax profits of $4.07M. The rights issue to raise the $29.2M watered down the brothers' holding to 18% of the combined group.
From June 1988 (see next section), the company began to use redeemable preference shares
Preferred stock
Preferred stock, also called preferred shares, preference shares, or simply preferreds, is a special equity security that has properties of both an equity and a debt instrument and is generally considered a hybrid instrument...
to raise capital. These securities look like equity and were classified as such on the company's balance sheet
Balance sheet
In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A...
but since a failure of the company's share price to rise above a pre-determined threshold at a nominated forward date would enable the preference holders to put
Put option
A put or put option is a contract between two parties to exchange an asset, the underlying, at a specified price, the strike, by a predetermined date, the expiry or maturity...
their stock back to he company, these instruments were in truth more like interest-paying debt.
Difficulties & decline
Difficulties arose after the 1987 Bates acquisition as some clients perceived conflict concerns with other group agencies. Bates clients Warner-Lambert (billings $68M), RJR NabiscoRJR Nabisco
RJR Nabisco, Inc., was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R.J. Reynolds Tobacco Company. RJR Nabisco was purchased in 1988 by Kohlberg Kravis Roberts & Co...
(billings $96M), Michelob (billings $38M), Ralston (billings $12M) and McDonald's
McDonald's
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 64 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by the eponymous Richard and Maurice McDonald; in 1948...
(billings $8M) all pulled their accounts in the months following that acquisition. Colgate-Palmolive
Colgate-Palmolive
Colgate-Palmolive Company is an American diversified multinational corporation focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products . Under its "Hill's" brand, it is also a manufacturer of...
assignments were also pulled from Bates at the same time as their direct competitor Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
were pulling business from Saatchi & Saatchi Compton and DFS Dorland due to their conflict concerns. However the London ad agency was still the number one in the profits in the UK in 1987 and the Worldwide Group was performing financially with Saatchi & Saatchi Company PLC recording its seventeenth year of consecutive growth with profits of £124.1M up from the 1986's £70.1M. The Group expanded its public listings to include the Paris Bourse
Paris Bourse
The Paris Bourse is the historical Paris stock exchange, known as Euronext Paris from 2000 onwards.-History and functioning:...
and the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
.
The brothers in 1987 made their boldest move to date when they made plans for a take over run of the ailing Midland Bank
Midland Bank
Midland Bank Plc was one of the Big Four banking groups in the United Kingdom for most of the 20th century. It is now part of HSBC. The bank was founded as the Birmingham and Midland Bank in Union Street, Birmingham, England in August 1836...
, Britain's 4th largest bank at the time with 2,100 UK branches. The bank's Board rejected the offer in September 1987, openly questioned the qualifications of the Saatchis to be running a bank and may have leaked details of the bid to the press. In the same month Maurice Saatchi met with Board executives of the Hill Samuel
Hill Samuel
Hill Samuel is a wholly owned subsidiary of Lloyds TSB's Offshore Private Banking unit. It was formerly a leading British merchant bank and financial services firm before the takeover by TSB Group Plc. in 1987, which itself merged with Lloyds Bank to become Lloyds TSB in 1995.-History:In 1832,...
merchant bank
Merchant bank
A merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters to the firms they lend to....
to discuss an acquisition. Once the financial press became aware of the moves the brothers became the subject of unprecedented ridicule with the criticisms focussed on the notion that bank customers, staff and shareholders would be able to make no sense of their bank being part of an ad agency group. The City
City of London
The City of London is a small area within Greater London, England. It is the historic core of London around which the modern conurbation grew and has held city status since time immemorial. The City’s boundaries have remained almost unchanged since the Middle Ages, and it is now only a tiny part of...
's reaction was swift and in mid-September 1987 the Saatchi & Saatchi share price fell 6.2% in two days.
On 19 October 1987, the world stockmarkets crashed
Black Monday (1987)
In finance, Black Monday refers to Monday October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin...
. Saatchi & Saatchi stock fell by 1/3 in twenty-four hours and by mid-October was at £5.48 down from £6.70 in mid-September and £7.05 high of 1987. As a result of the perceptions lingering after the Midland Bank discussions, on top of the general nervousness that followed the crash
Black Monday (1987)
In finance, Black Monday refers to Monday October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin...
, by 1988 Saatchi & Saatchi Plc was unable to use its previously reliable rights issue method to raise the capital it needed to continue its acquisition drive. In June 1988, the company issued £176.5M of convertible preference shares
Preferred stock
Preferred stock, also called preferred shares, preference shares, or simply preferreds, is a special equity security that has properties of both an equity and a debt instrument and is generally considered a hybrid instrument...
at £4.41 each to fund its acquisition of the Gartner Group an information technology market research firm. If Saatchi PLC shares didn't go above £4.41 by July 1993, the holders could put the shares back to the company at £4.41 plus a 25% bonus. Saatchi & Saatchi PLC stood to owe £211M for the £176.5M of capital raised.
Profits were up 11% in 1988 to £138M but in 1989 the Group had to report its first ever decline after eighteen years of growth when the profit dropped dramatically to £21.8M. When this was forewarned at the March 1989 Annual general meeting
Annual general meeting
An annual general meeting is a meeting that official bodies, and associations involving the public , are often required by law to hold...
the share price dropped promptly by £0.6 to £3.20 or 16%. Between January and May 1989, 6% of the workforce or 800 employees were laid off, by the end of 1993 that number had grown to 7,000. In June 1989, Saatchi and Saatchi announced its intention to sell off its entire consulting division and to focus on advertising and related services. Later that year Robert Louis-Dreyfus
Robert Louis-Dreyfus
Robert Louis-Dreyfus was a businessman who had major success as Chief Executive Officer of Adidas-Salomon and Saatchi & Saatchi. He was a majority shareholder of the French football team Olympique de Marseille, and during his tenure they re-emerged as a major European football club.- Early life...
was appointed as CEO of the listed company. He effected the sale of a number of businesses (the consultancies Infocom and Hay Consulting would collectively sell for half their initial purchase price) and presided over a major re-structuring of the company until his departure in mid-1992. His successor was Charles Scott, who had joined the business with Louis-Dreyfus in 1989 as Finance Director. He continued the cost-cutting and consolidation drive but found himself in regular disagreement with Maurice Saatchi and the two executives sometimes conducted their spat via press leaks and stories which found their way into the papers.
Ousting the Saatchis
David Herro is a U.S based investment analyst and fund manager. His employer Harris Associates L.P.Harris Associates L.P.
Harris Associates L.P. is a Chicago-based investment company that manages $47.8 billion in assets. The firm is known for managing the Oakmark mutual funds. The company also was the defendant in a lawsuit that the U.S. Supreme Court ruled on in March 2010....
controlled a 9.6% holding in Saatchi & Saatchi managed by Herro. He maintained dialogue with his former employer the State of Wisconsin Investment Board which had built up an 8.1% holding during Herro's time there and with colleagues at the General Electric Investment Corpn which held 5%. Herro became concerned in 1992 at the negative effect on the investment of the public bickering between Scott and Maurice Saatchi and made this view known to the Board along with his intention to monitor the business closely.
In late 1994, Herro expressed his view (and that of his associate shareholders) to the Board of Saatchi & Saatchi PLC that Maurice should be dismissed as Chairman due to his tardiness in reducing costs by maintaining expensive corporate offices at Berkeley Square
Berkeley Square
Berkeley Square is a town square in the West End of London, England, in the City of Westminster. It was originally laid out in the mid 18th century by architect William Kent...
for too long; Maurice's expressed intention to perhaps launch a takeover/partial takeover; his insistence on a new incentive/option plan which Herro saw as structured to Maurice's favour. In December 1994, the Board succumbed to shareholder pressure and sacked Maurice as Chairman. Within a month senior executives Jeremy Sinclair, Bill Muirhead, David Kershaw, Moray McLennan, Nick Hurrell, Simon Dicketts and James Lowther would all also resign and join Maurice Saatchi in a new business which would become known as M&C Saatchi
M&C Saatchi
M&C Saatchi is an international advertising agency network formed in January 1995 by the brothers Maurice Saatchi and Charles Saatchi after they were ousted from the advertising agency group Saatchi & Saatchi which they had founded in 1970...
. Charles Saatchi, other Saatchis staff and some consequential clients would follow including Gallaher Group
Gallaher Group
Gallaher Group is a major United Kingdom-based multinational tobacco company. It was traded on the London Stock Exchange and was a constituent of the FTSE 100 Index, prior to its April 2007 acquisition by Japan Tobacco.-History:...
, Mirror Newspapers
Trinity Mirror
Trinity Mirror plc is a large British newspaper and magazine publisher. It is Britain's biggest newspaper group, publishing 240 regional papers as well as the national Daily Mirror, Sunday Mirror and People, and the Scottish Sunday Mail and Daily Record. Its headquarters are at Canary Wharf in...
, the retailer Dixons and after a competitive pitch, British Airways
British Airways
British Airways is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. British Airways is the largest airline in the UK based on fleet size, international flights and international destinations...
.
After the brothers
The ousting of the Saatchi brothers in 1995 and the subsequent formation of M&C SaatchiM&C Saatchi
M&C Saatchi is an international advertising agency network formed in January 1995 by the brothers Maurice Saatchi and Charles Saatchi after they were ousted from the advertising agency group Saatchi & Saatchi which they had founded in 1970...
saw a period of turmoil for the agency, as key figureheads from the London office joined the defection to the new entity. At this point, nearly £40 million of revenue left the agency, with a further £11 million spent on severance and litigation against the staff members who left.
In 1995, Saatchi & Saatchi PLC was renamed the Cordiant Communications Group
Cordiant Communications Group
Cordiant Communications Group was an advertising agency conglomerate in business from 1995 to 2003. In 2001, Cordiant was the eighth largest advertising group worldwide, with an estimated gross income of US$1.2 billion and billings of around US$13.4 billion....
and the subsidiary businesses split into two main groupings: Research or Advertising. The Saatchi & Saatchi Advertising network formed the keystone of the latter. The acquisition frenzy that characterised the agency throughout the 1980s was taken to task under the new management system. This led to a number of agency assets being sold, including the Fitch design company (to the WPP group), management consultants The Hay Group and a number of the other 383 offices around the world that had been acquired in the 1980s.
After the 1995 shakeout, the key imperative for the new owners was to manage the relationships with Saatchi & Saatchi's blue-chip client base, which at this point included decades-old partnerships with the Campbell Soup Company
Campbell Soup Company
Campbell Soup Company , also known as Campbell's, is an American producer of canned soups and related products. Campbell's products are sold in 120 countries around the world. It is headquartered in Camden, New Jersey...
, Hewlett-Packard
Hewlett-Packard
Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses and large enterprises, including...
, Johnson & Johnson
Johnson & Johnson
Johnson & Johnson is an American multinational pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500....
, Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
, DuPont
DuPont
E. I. du Pont de Nemours and Company , commonly referred to as DuPont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthère Irénée du Pont. DuPont was the world's third largest chemical company based on market capitalization and ninth based on revenue in 2009...
, Philip Morris
Philip Morris USA
Philip Morris USA is the United States tobacco division of Altria Group, Inc. Philip Morris USA brands include Marlboro, Virginia Slims, Benson and Hedges, Merit, Parliament, Alpine, Basic, Cambridge, Bucks, Dave's, Chesterfield, Collector's Choice, Commander, English Ovals, Lark, L&M, Players and...
and General Mills
General Mills
General Mills, Inc. is an American Fortune 500 corporation, primarily concerned with food products, which is headquartered in Golden Valley, Minnesota, a suburb of Minneapolis. The company markets many well-known brands, such as Betty Crocker, Yoplait, Colombo, Totinos, Jeno's, Pillsbury, Green...
. The strength of these relationship were the legacy of the earlier acquiistions of Compton, of Bates Worldwide and of Dancer Fitzgerald Sample
Dancer Fitzgerald Sample
Dancer Fitzgerald Sample was a top tier Madison Avenue advertising agency during the 20th century originally founded in Chicago in 1923. It was acquired and merged into the Saatchi & Saatchi network in the 1980s.-History:...
whose relationship with Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
had stood since the 1920s. While the British Airways
British Airways
British Airways is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. British Airways is the largest airline in the UK based on fleet size, international flights and international destinations...
and Mars
Mars
Mars is the fourth planet from the Sun in the Solar System. The planet is named after the Roman god of war, Mars. It is often described as the "Red Planet", as the iron oxide prevalent on its surface gives it a reddish appearance...
defections in 1995 destabilised the agency's reputation in London, it seemed not to affect operations in its biggest market, the United States. The growth of its new healthcare arm in New York City and increased spending from its West Coast auto clients Toyota and Lexus
Lexus
is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan's largest-selling make of premium cars. The Lexus marque is marketed in over 70 countries and territories worldwide, and has...
enabled a period of steady growth for its American operations.
In 1997, Saatchi & Saatchi officially dropped "Advertising" from its name. This was part of an imperative installed by Kevin Roberts
Kevin Roberts
Kevin John Roberts has been the Chief Executive Officer Worldwide of the advertising agency Saatchi & Saatchi since 1997. In September 2006, Saatchi & Saatchi won a US$430 million JC Penney contract because of the idea of lovemarks, which was invented and promoted by Roberts.-Early life and career...
, a beverage marketing veteran brought in to revive the agency's fortunes. A significant decision of his was to move the global headquarters of the agency from its Charlotte Street, London address to its Hudson St, New York City office. Newly dubbed an 'ideas company' by Roberts, the agency sought to usher its resources towards the internet, still very much in its infancy in the 1997.
Acquisition by Publicis
In 2000, after speculation that it would be acquired by WPPWPP
WPP may refer to:* Windows software trace preprocessor* WPP plc, a London-based advertising holding company* Wandsworth Parks Police, a police service in London, England* Witness Protection Program, in USA...
or Omnicom, Saatchi & Saatchi joined the Publicis Groupe, a global marketing concern based in Paris, France. Publicis kept Roberts as CEO, content with his vision for an 'ideas agency'. Saatchi & Saatchi still underwent some turmoil throughout this time, as the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
saw the closure of its San Francisco office, which effectively ended its 15-year relationship with the Hewlett-Packard
Hewlett-Packard
Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses and large enterprises, including...
company. The account was subsequently split between a Publicis agency and creative agency Goodby, Silverstein and Partners. Johnson & Johnson
Johnson & Johnson
Johnson & Johnson is an American multinational pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500....
also decided to review its relationship, withdrawing its $US100m Tylenol
Tylenol
Tylenol is a North American brand of drugs advertised for reducing pain, reducing fever, and relieving the symptoms of allergies, cold, cough, and flu. The active ingredient of its original, flagship product, paracetamol , is marketed as an analgesic and antipyretic...
account from the New York office. A few months later, InBev
InBev
InBev is a subsidiary of Anheuser-Busch InBev. The company existed independently for several years - since the merger between Interbrew and AmBev and until the acquisition of Anheuser-Busch. InBev has operations in over 30 countries and sales in over 130 countries...
announced that its Beck's
Beck's
Brauerei Beck & Co is a German brewery in the north German city of Bremen. Owned by local families until February 2002, it was then sold to Interbrew for 1.8 billion euros. The brewery was formed under the name Kaiserbrauerei Beck & May o.H.G. in 1873 by Lüder Rutenberg, Heinrich Beck and Thomas...
Beer account would shift to Leo Burnett after only a year at the agency. As a result, Roberts committed to building revenue through its existing clients, which led to additional assignments, with Saatchi Los Angeles securing new accounts such as Pur Filtered Water and Millstone Gourmet Coffee. Efforts were also made to shore up the Los Angeles office after it missed a $US40m brief for Toyota's Scion, a new sub-brand targeted at youth, which was given to San Francisco-based Attik, a hybrid creative agency.
Despite these losses, this strategy gave rise to the Lovemark
Lovemark
Lovemarks is a marketing concept that is intended to replace the idea of brands. The idea was first widely publicized in a book of the same name written by Kevin Roberts, CEO of the advertising agency Saatchi & Saatchi. In the book Roberts claims, "Brands are running out of juice". He considers...
s philosophy — a theory espoused in a book by the same name released by Roberts. While this met with scepticism in the advertising world, Roberts was vindicated in 2006 when he secured nearly $US700m worth of billings from two clients, Wendy's
Wendy's
Wendy's is an international fast food chain restaurant founded by Dave Thomas on November 15, 1969, in Columbus, Ohio, United States. The company decided to move its headquarters to Dublin, Ohio, on January 29, 2006. It has been owned by Triarc since 2008...
and department store JC Penney. Subsequent additions to the New York office, such as the New York Tourism Board and Cold Stone Creamery
Cold Stone Creamery
Cold Stone Creamery is an American-based ice cream parlor chain. The company, based in Scottsdale, Arizona, is owned and operated by Kahala Franchising, L.L.C. The company's main product is premium ice cream, or ice cream made with approximately 12-14% butterfat, that is made on location and...
have been described by both client and agency as 'being due to a strong belief in the Lovemarks' philosophy. Despite this, after only a year with the agency, Wendy's decided to pull the majority of its business into another roster agency, Kirshenbaum Bond & Partners, after complaints from Wendy Thomas (the namesake of the restaurant) who did not take kindly to her likeness being used in the advertising.
In 2005, critics complained that in creating a £20 million campaign for a new Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
ian spirit
Alcohol
In chemistry, an alcohol is an organic compound in which the hydroxy functional group is bound to a carbon atom. In particular, this carbon center should be saturated, having single bonds to three other atoms....
the agency spray-painted graffiti
Graffiti
Graffiti is the name for images or lettering scratched, scrawled, painted or marked in any manner on property....
images on walls and buildings in the East End of London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
.
Dr Martens CEO David Suddens decided to fire Saatchi & Saatchi as their advertiser on 24 May 2007. This was because of a one-time advertisement that used a picture of 1990's music icon Kurt Cobain
Kurt Cobain
Kurt Donald Cobain was an American singer-songwriter, musician and artist, best known as the lead singer and guitarist of the grunge band Nirvana...
without the permission of Courtney Love
Courtney Love
Courtney Michelle Love is an American rock musician. Love is the lead vocalist, lyricist, and rhythm guitarist for alternative rock band Hole, which she formed in 1989, and is an actress who has moved from bit parts in Alex Cox films to significant and acclaimed roles in The People vs...
, Cobain's widow. In its defense, Saatchi released a statement indicating their regret of Dr Marten's decision to terminate their services with them but emphasizing that they believed that the advertisement was deliberately edgy but not offensive.
Although the agency had gained early fame for its "Labour isn't working" advertising for the Conservative Party in 1979, in 2007 it was appointed the advertising agency for the Labour Party
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
.
A New Alliance
While the addition of Wendy'sWendy's
Wendy's is an international fast food chain restaurant founded by Dave Thomas on November 15, 1969, in Columbus, Ohio, United States. The company decided to move its headquarters to Dublin, Ohio, on January 29, 2006. It has been owned by Triarc since 2008...
and JC Penney to the American client roster reaffirmed Roberts' belief in the 'ideas agency' model, the London office continued its slide as it plummeted out of the UK Top 10 list of agencies (a list, compiled by industry magazine Campaign UK, based on reported client billings). In early 2007, the London office saw the bulk of its work for Toyota UK and Europe leave to upstart agency CHI & Partners, just months after it had lost the entire Lexus
Lexus
is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan's largest-selling make of premium cars. The Lexus marque is marketed in over 70 countries and territories worldwide, and has...
business to the same agency. Late 2006 saw the return of some Toyota business, including the £60m pan-European launch of the Auris
Auris
Auris, dative and ablative form of Aurum, meaning "gold" or same nominative, genitive and vocative form, meaning "ear" in Latin, can refer to any of the following:* Auris, Isère, a town in France* Toyota Auris...
, Toyota's Corolla
Toyota Corolla
The Toyota Corolla is a line of subcompact and compact cars manufactured by the Japanese automaker Toyota, which has become very popular throughout the world since the nameplate was first introduced in 1966. In 1997, the Corolla became the best selling nameplate in the world, with over 35 million...
successor.
In July 2007, it was announced by Publicis chief Maurice Levy that Saatchi & Saatchi would form a new business alliance with sister agency Fallon. Fallon, part-owned by Publicis, has enjoyed similar mixed success with its network of offices. While its London office, with a client list that includes Sony, Orange and Asda, has been consistently lauded for its new business and creative success, its Minneapolis headquarters, where namesake founder Pat Fallon remains a presence, has been tarnished by a number of client losses, including Citigroup
Citigroup
Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate...
, BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
, Sony
Sony
, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues....
, Dyson
Dyson
-People:*Andre Dyson , an American football player*Charles W. Dyson , a U.S. Navy rear admiral*Esther Dyson , consultant and philosopher in emerging digital technology, the daughter of Freeman Dyson...
and Starbucks
Starbucks
Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 55 countries, including over 11,000 in the United States, over 1,000 in Canada, over 700 in the United Kingdom, and...
.
The new alliance, known as Saatchi & Saatchi-Fallon (SSF Group), will operate under the supervision of Kevin Roberts, who was named as CEO of the new entity. Reporting to him is Robert Senior, one of the original partners of Fallon London, who will preside over the Europe & UK operations of the alliance, including both Saatchi and Fallon offices in London. In early 2008, Chris Foster, a Saatchi veteran of nearly a decade, was appointed to become the new CEO of Fallon's Minneapolis office, fuelling speculation that Fallon will become a new Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
or General Mills
General Mills
General Mills, Inc. is an American Fortune 500 corporation, primarily concerned with food products, which is headquartered in Golden Valley, Minnesota, a suburb of Minneapolis. The company markets many well-known brands, such as Betty Crocker, Yoplait, Colombo, Totinos, Jeno's, Pillsbury, Green...
roster agency.
After a year of operations, it was announced in October 2008 that the SSF Group had been contracted by chocolate giant Cadbury to handle its Dairy Milk
Dairy Milk
Dairy Milk is a brand of milk chocolate currently manufactured by Cadbury; except in the United States where it is made by The Hershey Company. It was introduced in the United Kingdom in 1905 and now consists of a number of products...
and related brands across several markets (including the UK, Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
), with a reported total of $US200m in billings. Whilst Fallon London would lead creative efforts across Europe, Saatchi's New York office was handed the brief to handle the business in the United States, where Cadbury remains a relative unknown compared to its main competitor, Hershey
The Hershey Company
The Hershey Company, known until April 2005 as the Hershey Foods Corporation and commonly called Hershey's, is the largest chocolate manufacturer in North America. Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey's Chocolate World. It was founded by Milton S...
.
Corporate
Saatchi & Saatchi has offices in over 80 countries around the world. Its worldwide headquarters are in New York CityNew York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
. Its other main office, in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, is located in Torrance, California
Torrance, California
Torrance is a city incorporated in 1921 and located in the South Bay region of Los Angeles County, California, United States. Torrance has of shore-front beaches on the Pacific Ocean, quieter and less well-known by tourists than others on the Santa Monica Bay, such as those of neighboring...
. In the US, Saatchi's largest clients are Toyota, Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
and General Mills
General Mills
General Mills, Inc. is an American Fortune 500 corporation, primarily concerned with food products, which is headquartered in Golden Valley, Minnesota, a suburb of Minneapolis. The company markets many well-known brands, such as Betty Crocker, Yoplait, Colombo, Totinos, Jeno's, Pillsbury, Green...
.
The London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
office, the home of the original agency, is on Charlotte Street and has its own pub, named "The Pregnant Man" after the firm's first famous ad. London is often the base for many of Saatchi's pan-European accounts, which include Toshiba
Toshiba
is a multinational electronics and electrical equipment corporation headquartered in Tokyo, Japan. It is a diversified manufacturer and marketer of electrical products, spanning information & communications equipment and systems, Internet-based solutions and services, electronic components and...
, Sony Ericsson
Sony Ericsson
Sony Ericsson Mobile Communications AB is a joint venture established on October 1, 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to manufacture mobile phones....
, and VISA
Visa
Visa or VISA may refer to:* Visa , a document issued by a country's government allowing the holder to enter or to leave that country...
. The company's motto Nothing is Impossible is famously engraved into the steps of the Charlotte Street office. Saatchi's worldwide CEO is Kevin Roberts
Kevin Roberts
Kevin John Roberts has been the Chief Executive Officer Worldwide of the advertising agency Saatchi & Saatchi since 1997. In September 2006, Saatchi & Saatchi won a US$430 million JC Penney contract because of the idea of lovemarks, which was invented and promoted by Roberts.-Early life and career...
.
Saatchi & Saatchi also frequently recruits in unusual ways by asking applicants to participate in competitive exercises such as to make facebook groups and compete for who gets most members.
Digital
2006 saw a renewed focus from the agency upon its digital credentials. As marketers noted the migration of consumers to other types of media, such as mobile phones and broadband Internet services, Saatchi has responded with a number of initiatives, such as its global joint venture with New Zealand-based Hyperfactory, a leading global mobile marketing agency. Saatchi also refocused its efforts on its digital arm and celebrated with wins in 2006 from PricewaterhouseCoopersPricewaterhouseCoopers
PricewaterhouseCoopers is a global professional services firm headquartered in London, United Kingdom. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy firms....
and Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
.
A competition organised by the former Saatchi & Saatchi 2009 interns in London to win an internship at the firm led to the formation of the Secret London
Secret London
Secret London is a Facebook group started by 21-year-old Bristol University graduate, Tiffany Philippou, on 19 January 2010 in response to a Saatchi & Saatchi competition . The group grew rapidly and is composed mostly of Londoners who use the site to share suggestions and photos of London...
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
Group, and the associated website.
Aborted Campaign
August 2011 - Telecom New Zealand pulled the pin on the Backing Black advertising push, which called on fans to abstain from sex during the Rugby World Cup and wear black rubber rings to show their support. Telecom's retail boss Alan Gourdie apologised for offending Kiwis with the idea. Saatchi & Saatchi, who were responsible for the concept and delivery of the campaign, refused to comment. Saatchi & Saatchi boss Kevin RobertsKevin Roberts
Kevin John Roberts has been the Chief Executive Officer Worldwide of the advertising agency Saatchi & Saatchi since 1997. In September 2006, Saatchi & Saatchi won a US$430 million JC Penney contract because of the idea of lovemarks, which was invented and promoted by Roberts.-Early life and career...
earlier defended the ads. Fans were more outspoken, flooding Backing Black's official Facebook site with messages of disgust. Even Prime Minister John Key
John Key
John Phillip Key is the 38th Prime Minister of New Zealand, in office since 2008. He has led the New Zealand National Party since 2006....
said the campaign was evidence not all advertising dollars were well spent.
Tim Bell
Lord Bell (born 1941) was the company's first Media Director appointed in 1970. He performed senior account service roles rising to CEO and later Chairman of the London office. He was instrumental in the agency's strength of relationship with Margaret ThatcherMargaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...
developed during their work on her 1979 and 1983 campaigns. He had a falling out with the brothers in 1985 and left to join Frank Lowe
Frank Lowe (advertiser)
Sir Frank Budge Lowe is a pioneer of the advertising agency. He first rose to fame running Collett Dickenson Pearce, which he built into one of the best known agencies in the United Kingdom. In 1981, he started Lowe Howard-Spink, which eventually became Lowe & Partners Worldwide...
and an offer of his name on the door at Lowe, Howard-Spinke and Bell (now Lowe Worldwide
Lowe Worldwide
Lowe and Partners is an international advertising agency headquartered in London. The Agency is a unit of the Interpublic Group, one of the world's largest advertising agency holding companies...
).
Paul Arden
Paul ArdenPaul Arden
Paul Arden was an influential author of several books on advertising and motivation including "Whatever You Think, Think The Opposite" and "It's Not How Good You Are, It's How Good You Want To Be" and a former creative director for Saatchi and Saatchi at the height of their advertising...
(1940–2008) was an Executive Creative Director at the company between 1987 and 1995 working on British Airways
British Airways
British Airways is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. British Airways is the largest airline in the UK based on fleet size, international flights and international destinations...
, Anchor Butter, Toyota, Ryvita
Ryvita
Ryvita is a rye-based crispbread which up until 2009 was manufactured by The Ryvita Company. The company was founded in Birmingham, England, in 1930 and is today a subsidiary of Associated British Foods. Ryvita crackers are popular with dieters...
, Nivea
Nivea
Nivea is a global skin- and body-care brand that is owned by the German company Beiersdorf. The company was founded on March 28 1882 by pharmacist Carl Paul Beiersdorf. In 1900, the new owner Oskar Troplowitz developed a water-in-oil emulsion as a skin cream with Eucerit, the first stable emulsion...
, Trust House Forte, Alexon Group
Alexon group
Alexon Group plc is a ladies' clothing retailer, based in Luton, England. The company is listed on the London Stock Exchange . It is a constituent of the FTSE Fledgling Index....
and Fuji
Fuji
-People:* Mr. Fuji, ring name of wrestling and manager Harry Fujiwara* Keiko Fuji, a Japanese singer of the 1960s and 1970s, and mother of Hikaru Utada* Sumiko Fuji, a Japanese actressFictional characters* Fuji , a character in the Stormwatch series...
among others. His British Airways campaigns continue to be remembered as one of the greatest advertising campaigns of all time, changing the fortunes of the airline.
The Independent
The Independent
The Independent is a British national morning newspaper published in London by Independent Print Limited, owned by Alexander Lebedev since 2010. It is nicknamed the Indy, while the Sunday edition, The Independent on Sunday, is the Sindy. Launched in 1986, it is one of the youngest UK national daily...
said that "Arden was the ringmaster behind the whole creative circus that saw British Airways
British Airways
British Airways is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. British Airways is the largest airline in the UK based on fleet size, international flights and international destinations...
become "The World's Favourite Airline", The Independent become the new intelligentsia's favourite newspaper, Margaret Thatcher
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...
the nation's favourite leader and Silk Cut
Silk Cut
Silk Cut is brand of low tar cigarette produced by the Gallaher Group. The packaging is characterised by a distinctive stark white packet with the brand name in a purple, blue, red, silver, white or green square....
their favourite fag." The Times says he was a "tempestuous advertising director who thought up memorable campaigns for Silk Cut, BA and The Independent". Arden left the employment of Saatchi & Saatchi in 1992, but remained a key consultant for the agency until 1995. He died in 2008.
Martin Sorrell
Sir Martin SorrellMartin Sorrell
Sir Martin Sorrell is an English businessman and the chief executive officer of WPP Group. He has served in that role since he started the company.-Biography:...
(born 1945), joined Saatchi & Saatchi in 1975 at the time of their reverse takeover of Compton. He was Group Finance Director from 1977 until 1984. He designed and executed the company's significant acquisition drive during that time, refining and using the mechanism of the earn out
Earn out
Earn out is a variable part of price paid for a company.Price paid for a company, i.e. for owning the company's equity can be either fixed or variable....
.,
Robert Louis-Dreyfus
Robert Louis-DreyfusRobert Louis-Dreyfus
Robert Louis-Dreyfus was a businessman who had major success as Chief Executive Officer of Adidas-Salomon and Saatchi & Saatchi. He was a majority shareholder of the French football team Olympique de Marseille, and during his tenure they re-emerged as a major European football club.- Early life...
(1946–2009) was the grandson of Leopold Dreyfus founder of S.A Louis-Dreyfus et Cie, once France's largest private firm and one of the world's largest grain trading companies. He met the Saatchis when they were looking to acquire IMS, the US pharmaceutical research company where Louis-Dreyfus was CEO. The business was eventually sold to Dun & Bradstreet
Dun & Bradstreet
Dun & Bradstreet is a Fortune 500 public company headquartered in Short Hills, New Jersey, USA that provides information on businesses and corporations for use in credit decisions, B2B marketing and supply chain management...
and Louis-Dreyfus retired aged 42. He was lured back to corporate life to the role of CEO of Saatchi & Saatchi PLC from 1989 to 1993. He went on to be successful as CEO in a turn-around role at Adidas-Salomon from 1994 to 2001.
Sources
- Fendley, Alison, Saatchi & Saatchi: the Inside Story, Diane Publishing Co., 1995 ISBN 978-0756765637
- Kleinman, Philip The Saatchi & Saatchi Story,Pan Publishing (London) ISBN 0-330-30689-8
- Goldman, Kevin Conflicting Accounts – The Creation & Crash of the Saatchi & Saatchi Empire, Simon & Schuster, New York, 1997 ISBN 0-684-83553-3