In January 1995, Andy Law, then chairman of the London office of Chiat/Day, along with David Abraham, led an employee buyout when the agency learned it was being sold to Omnicom Group. Mr. Law negotiated the acquisition of the shop on a deferred payment of up to $3 million, based on agency income over the following seven years. The new agency's structure made all employees co-owners, and St. Luke's claimed to be the world's first cooperative stake-holding advertising agency.
The original 37 employees—from receptionist to account director—each paid about $75 for the right to receive an equal share in the new agency. The remaining 75% of share capital was set aside for yearly distribution to existing and future employees. Employee ownership, greater participation in decision-making and cooperative working arrangements may all be reasons why the company claims a low staff turnover.
Another radical approach—born of Chiat/Day's revolutionary open-plan-office approach to business—led the St. Luke's staff to a hot-desk approach to office work, complete with in-house mobile phones, a communal "hub," a cafe rather than a dining area and "chill out" rooms.
Similarly, St. Luke's clients are also treated to a radically different approach to client service. Mr. Law and his team brought their former agency's entire client list (including HSBC and Boots) with them to St. Luke's, but he wanted his new agency to offer clients better service. St. Luke's clients each have their own "Brand Rooms" at the agency, which are designed around a theme that uses elements of a client's individual brand and its associated lifestyle.
The Ikea room, for example, is set up as a living room using Ikea furniture products, while the room for Clarks is fitted out as a miniature shoe shop, complete with foot measurement boards. When St. Luke's held the EuroStar Channel tunnel train service account, it fitted out the dedicated campaign room with the client's train seats and etched-glass sliding doors normally found between the train cars.
St. Luke's, which has been variously tagged with labels such as "flaky" and "weird," has landed some significant additions to its original client list. The British advertising industry magazine Campaign named St. Luke's its Advertising Agency of the Year for 1997.
In 1998, St. Luke's continued its growth by winning the British government's Central Office of Information Welfare to Work, or New Deal, campaign. The $27 million campaign aimed to remove 250,000 unemployed youngsters from welfare rolls and get them into jobs. The agency's interest in reality-based advertising is best seen in the New Deal campaign, which features senior executives of companies that have set up jobs for the program.
In the past the agency's forte was working with clients committed to national TV advertising as part of the campaign. However, a diversification strategy led to a variety of alternative activities, such as consulting projects for BSkyB, BP and the Body Shop; the development of a short film program involving a tie-in with Britshorts, an online venue for short film development for aspiring film directors; and innovative equity-share deals with successful online companies such as Smartgroups, a portal community Web site.
Four corporate aspirations
By 1998, the company was pitching only accounts spending at least $7.5 million. However, according to the company, financial focus is only one of four corporate aspirations that also include campaign creativity, client business and staff welfare.
The company made its first overseas expansion in October 2000 when it opened an office in Stockholm. Tim Hearn, who had been one of the agency's creative directors in London, headed the office.
In March 2003, Mr. Law left the agency, which, since the previous April had been run on a day-to-day basis by Neil Henderson and Phil Teer, the shop's joint managing directors. At the time, the agency had a staff of 95 and billings of about $100 million. The new management said it would be more conservative than Mr. Law, who had been pursuing expansion to the U.S. following the opening of a small office in India in 2001.