The Other Saatchi: M&C Quietly Plots Expansion

Independent Shop Is Sixth-Largest in Britain; Now Eyes New York Growth

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LONDON (AdAge.com) -- After an eventful 40 years in the business, Charles Saatchi made a discreet exit from advertising this month when he sold his 7% stake in M&C Saatchi for $7 million.
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M&C Saatchi's European chairman Moray MacLennan touts the reach of his company's agency network -- 12 of its 17 offices are in Asia.

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Mr. Saatchi, 63, left an 11-year-old network that is nowhere near as well-known as the original Saatchi & Saatchi empire he and his younger brother Maurice started together in 1970 with only a few years experience between them.

Global network
"It's a well-kept secret that we have a perfectly formed network," said Moray MacLennan, M&C Saatchi's European chairman.

That's partly because M&C Saatchi hasn't made its mark in the U.S., where just 23 of the network's 806 staffers work in two small offices in New York and Los Angeles.

Yet M&C Saatchi, born in 1995 after Maurice Saatchi's famous ousting from Saatchi & Saatchi, is the biggest independent agency network by number of offices -- 17 in 13 countries. So many Saatchi & Saatchi executives and clients defected to join the Saatchi brothers, especially from the flagship London agency and the network's Asian offices, that M&C Saatchi was perhaps the first network to be international from day one.

Sixth-largest U.K. shop
M&C in London is the sixth-largest U.K. shop, according to Nielsen figures -- two places ahead of Saatchi & Saatchi (which lost its No. 1 U.K. ranking in 1996 and hasn't regained it) and five spots ahead of Bartle Bogle Hegarty, another old rival. M&C Saatchi gained instant credibility in 1995 by winning the $100 million global British Airways account away from Saatchi in its first pitch, but Bartle Bogle, also part of that review, wrested the account last year from M&C Saatchi in a major blow. (Despite losing BA, M&C looks set to climb the U.K. agency rankings thanks to wins including Allied Bakeries, Direct Line insurance and GlaxoSmithKline).

"It has forced us to reappraise the place, and it has allowed us to build the network as we wish, rather than around BA's suppliers and technology," Mr. MacLennan said. "When we were pitching we decided that, win or lose, we would be a better agency in some way."

While his brother Charles, who hasn't been involved in the agency for several years, dedicates himself to his modern-art collection, Maurice still puts in a full day at the agency. He was co-chairman of the U.K.'s Conservative Party until a leadership change last year, and he now spends less time on politics, his partners say. In June, he made a rare public appearance at the Cannes Lions International Advertising Festival, launching the agency's "one-word equity" charter advocating simplicity in marketing communications.

European growth
Maurice Saatchi and three other partners each own a 7% stake in M&C Saatchi today. The agency went public in 2004. Berlin and Paris offices are up and running, and Madrid is about to be added. There are still holes in Eastern Europe and other regions, but those areas aren't priorities for the agency.

Mr. MacLennan, who just added Europe to his U.K. responsibilities, said M&C Saatchi plans to actively market itself as a network for the first time, focusing on the agency mantra of "brutal simplicity" in thought, culture and process.

Asia generates about half of M&C Saatchi's global revenue, and is home to 12 of its 17 offices -- many of the agency's multinational clients are based in Asia.

Although he declined to reveal detailed plans for the U.S., Tom Dery, chairman of both Asia Pacific and the U.S. said, "Recently, we've thought: 'Let's have a red-hot go at building the agency in New York."'

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Normandy Madden contributed to this report.
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