Saatchi & Saatchi is an advertising agency founded by brothers Maurice (now Lord Saatchi) and art collector Charles. In 2000, it became a subsidiary of Publicis. In the early 1990s the company suffered problems due to over-expansion which led to the removal of the brothers, and subsequent demerger from its corporate parent Cordiant.^[1] It is now 12th world wide in terms of revenue and is valued at US$593m.^[2]

Saatchi & Saatchi's holding company is Publicis, headquartered in Paris. Saatchi's worldwide CEO is Kevin Roberts. Saatchi & Saatchi has offices in over 80 countries around the world. Its worldwide headquarters are in New York City. 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 beginnings

Saatchi brothers are noted for their campaign "Labour isn't working"^[3] on behalf of the Conservative Party before the 1979 UK general election and for the advertisements for British Airways, Silk Cut^[4] and other state-owned interests privatised by the Conservatives in the 1980s.

After working for other advertising firms, the two brothers established their own company in 1976.

In their early days the agency was known as one of the more creative in London and employed people who went on to be stars of their industry including Tim Bell and Martin Sorrell^[5]

With the support of American investors, Saatchi & Saatchi pursued a policy of buying out competing firms with lucrative established contracts. In 1995, a boardroom coup saw the brothers leave the company and set up a new firm M&C Saatchi.

After the brothers

The ousting of the Saatchi brothers in 1995, and the subsequent formation of M&C Saatchi 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 had been taken from the agency, with a further £11 million spent on severance payments and litigation against the staff members who had left.

In 1995, Saatchi & Saatchi was made part of the Cordiant Communications Group, a new grouping that was split into two main functions: research and advertising, with Saatchi & Saatchi forming 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 (which is now part of the WPP group), management consultants The Hay Group and a number of the 383 offices around the world that had been opened during the late 1980s.

After the 1995 shakeout, the key imperative for the new owners of the agency 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, Phillip Morris and General Mills. These clients were strategically acquired when the Saatchi brothers had bought out a stable of established advertising agencies throughout the 1970s and 1980s, including the London-based Compton Advertising and the New York agencies Dancer Fitzgerald-Sample (which had been an agency of record for Procter & Gamble since the 1920s) and Bates Worldwide. Whilst the British Airways and Mars defections in 1995 had destabilised the agency's reputation in London, it seemed to not 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, marked a period of steady growth for its American operations.

Saatchi & Saatchi entered a new phase in 1997 when it officially dropped "advertising" from the name. This was part of a new imperative installed by Kevin Roberts, a beverage marketing veteran who had been brought in to revive the agency's fortunes. One of Roberts' most important decisions 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 agency' by Roberts, the agency quickly sought to usher its resources towards the Internet, which was still very much in its infancy in the mid-1990s.

In 2000, after speculation that it would be acquired by WPP 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 P artners. Johnson & Johnson also decided to review its relationship, taking out its $US100m Tylenol out of the New York office. A few months later, InterBev announced that it's 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, including the addition of both its Los Angeles-based agencies to the Procter & Gamble roster, with Saatchi L.A. adding Pur Filtered Water and Team One adding 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 design agency.

Despite the loss, this gave rise to the Lovemarks philosophy—a theory espoused in a book by the same name released by Roberts. Whilst met with skepticism in the advertising world, Roberts was vindicated in 2006 with the addition of nearly $US700m worth of billings from two clients, Wendy's and department store JCPenney. 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.

The work of the agency is not without controversy. In 2005, critics complained that^[6] a £20 million campaign for a new Brazilian spirit it spray-painted graffiti images on walls and buildings in the East End of London.

Dr Martens CEO David Suddens decided to fire Saatchi and Saatchi as their advertiser on 24 May 2007. This was because of a one-time advertisement that used a picture of 1990s 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, they emphasized, they believe that the advertisement was effectively edgy, and not offensive.^[7]

Although the agency 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.^[8]

A New Alliance

Whilst the addition of Wendy's and JCPenney 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.

In July 2007, it was announced by Publicis chief Maurice Levy that Saatchi & Saatchi would now form a new business alliance with sister agency Fallon. Fallon, part-owned by Publicis, has enjoyed similar mixed success with its network of offices. Whilst 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, whom namesake founder Pat Fallon presides over, has been tarnished by a number of client losses, including Citigroup, BMW, Sony, Dyson and Starbucks.

The new alliance, known as Saatchi & Saatchi-Fallon, 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. It is hoped that the new alliance will usher in new business success for both agencies, despite some key client conflicts.

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 PricewaterhouseCoopers and Procter & Gamble.

The digital arm is called Saatchi Interactive^[9] and operates a diverse client portfolio including Toshiba and Lexus.

References

External links

• Official website
• Kevin Roberts Official site
• Saatchi & Saatchi Interactive