In their first year of independent operations, each reported this month that new-business billings and net profits were up over the year-earlier period. It's a nice comeuppance for those who predicted one or both companies would have to acquire or be acquired-and soon-if they were to have much of a future.
Despite uneven world economic conditions, Saatchi and Cordiant are riding the same wave of continued advertiser confidence that has swollen the account ledgers at the giants of the agency business-Omnicom Group, Interpublic Group of Cos. and WPP Group. The stocks of all five companies were trading at or near their 52-week highs last week as the Dow Jones Industrial Average flirted with the symbolic 10,000 level.
It's hard to think of agencies the size of Saatchi & Saatchi and Cordiant's Bates Worldwide as "mid-sized," yet their initial success augurs well for those companies unlikely to challenge the Omnicom-IPG-WPP trio in the race to be "the biggest." One year does not make a success story, of course. The truer test ahead for Saatchi and Cordiant will be how they fare if and when economies slow