Saatchi & Saatchi Advertising and Lieber, Levett, Koenig, Farese, Babcock last week inked a formal partnership agreement to provide each other with expertise each lacked before.
Lieber Levett CEO Bob Lieber said the two shops are working jointly on three projects he didn't identify, ranging from account pitches to database marketing work.
Under terms of the non-equity partnership, Lieber Levett is also expected to become a resource for Saatchi's sibling agencies in the Cordiant network, including Cliff Freeman & Partners, Compton Partners and Hudson Street Partners, all New York.
The alliance is aimed at boosting Lieber Levett's international capabilities while bolstering Saatchi, currently without a direct marketing agency in its network.
DELTA WAS FIRST JOINT WORK
The two shops began working together in December to jointly pitch--and ultimately win--Delta Air Lines' $100 million account. Jennifer Laing, Saatchi's North American CEO and chairman of the New York office, said the collaboration "was like a test market" to see how the agencies would work together.
Saatchi began wooing Lieber Levett soon after the Delta meetings began, with Vice Chairman of North America Tony Dalton initiating the courtship.
Saatchi has lacked a major direct affiliation since late 1995, when Kobs & Draft left Cordiant. Kobs & Draft bought itself out for $27.2 million and assumed the DraftDirect name. Cordiant had the option to keep up to a 25% stake after the buyout, but Interpublic Group of Cos. snapped up DraftDirect for $100 million in May 1996.
That was a source of anxiety for Saatchi during a period when major traditional agencies--including Deutsch, McCann-Erickson World-wide and Lowe & Partners/SMS--were rushing to make direct a priority through acquisitions and high-level hires.
After the DraftDirect relationship ended, "There was no opportunity for us to grow in that [direct marketing] area," Ms. Laing said.
Saatchi & Saatchi and Lieber Levett will maintain a non-equity relationship, which Mr. Lieber characterized as "a preferred partnership."
Six-month-old Lieber Levett has grown quickly--it expects billings of $45 million in 1997 from clients including Dell Computer Corp. and Indigo America, a printing systems company. But the independent shop lacked a global backbone from which to draw resources for international accounts.
"It was going to be inevitable that we'd need a global partner," Mr. Lieber said.
While four agency holding companies had approached Lieber Levett by the time discussions with Saatchi began, Mr. Lieber said none shared the same philosophy as Saatchi about joint agency autonomy on integrated accounts.
Lieber Levett was formed in October when five senior executives from Lowe Direct left the agency to form their own shop, in part because of issues relating to Lowe Direct's management within the general agency.
"We entered this thing with both of us having a taste of another world that wasn't quite working," Mr. Lieber said, referring to Lieber Levett's management when the partners worked at Lowe Direct and Saatchi's direct resources within the Cordiant network during the past 18 months.
Lieber Levett is moving into Saatchi's SoHo offices.
Copyright March 1997, Crain Communications Inc.