Saatchi & Saatchi

Saatchi and Saatchi
Company type	Private (since 2005)
Industry	Advertising, communications
Founded	1 January 1970; 56 years ago in London, United Kingdom
Founder	Maurice Saatchi, Charles Saatchi
Headquarters	London, United Kingdom
Area served	Worldwide (114 offices in 76 countries)
Products	Advertising and communications services
Owner	Publicis Groupe (since 2000)
Number of employees	6500+
Parent	Publicis Groupe

Saatchi and Saatchi is a global British communications and advertising agency network, operating 114 offices across 76 countries and employing more than 6,500 professionals. Established in 1970, its headquarters are located in London. The parent entity, Saatchi and Saatchi PLC, was publicly traded on both the New York Stock Exchange and London Stock Exchange from 1976 until 2000, during which it was included in the FTSE 100 Index. In 2000, the agency was acquired by the Publicis Groupe and transitioned to private ownership by 2005.

Founding period (1970–1975)

The inception of Saatchi & Saatchi took place in London when brothers Maurice and Charles Saatchi launched the company in 1970. Prior to this, Charles had co-founded the creative consultancy CramerSaatchi in 1967, which evolved into a comprehensive agency following Maurice’s arrival in 1970. One of their early notable projects was the "Pregnant Man" campaign for the UK's Health Education Council, which attracted considerable attention.

By 1975, the agency had secured prominent clients including Associated Newspapers, British Leyland, Cunard, Dunlop, Nestle, and the Labour Party. That year also marked the beginning of an assertive acquisition approach with a reverse takeover of Garland Compton—a well-established British agency whose clientele included Procter & Gamble, Gillette, Schweppes, and United Biscuits. This strategic merger enabled public listing status and provided capital for further growth.

Following the merger, Saatchi & Saatchi moved into Garland Compton’s London offices and became one of the top five UK agencies by billings, enhancing both its domestic market position and international reach.

Saatchi & Saatchi Garland Compton era (1975–1988)

Throughout this 13-year timeframe, Saatchi & Saatchi solidified its reputation for creative leadership while aggressively expanding worldwide. Prominent campaigns during this period included the impactful "Labour Isn't Working" advertisement for the Conservative Party ahead of the 1979 UK general election, alongside ongoing collaborations with British Airways and Silk Cut. The agency also developed influential figures in advertising such as Sir John Hegarty, Lord Tim Bell, and Sir Martin Sorrell.

The company’s acquisition efforts aimed to diversify its marketing services beyond traditional advertising while significantly growing its international footprint, particularly in the United States. Between 1972 and 1987, it acquired over 35 marketing services firms including four major advertising networks. Key acquisitions involved Garland-Compton (merger in 1976), Compton Advertising Inc (US, 1982), McCaffrey & McCall (US, 1983), The Hay Group (management consultancy for $100M in 1984), Dancer Fitzgerald Sample (global ad network for $75M in 1986), Backer & Spielvogel (US ad network for $101M in 1986), and Ted Bates (US and Asia ad network for $500M in 1986).

Organic expansion was limited to just two startups: The Sales Promotion Agency (1980) and Financial Dynamics PR (1986). The original London office experienced substantial growth following the Garland-Compton merger in 1976, increasing threefold in size and relocating to Compton’s premises.

Reports from executives within acquired firms indicated minimal direct involvement from Charles Saatchi or central management after acquisition. Integration of administrative functions or cross-selling between subsidiaries was limited, reflecting a decentralized organizational structure during this period.

Financial mechanisms

Established in 1970 with an initial capital of £100,000 provided by the Saatchi brothers alongside investors such as designer Mary Quant, the original ownership structure allocated 15% to Cannon Holdings, 42% to Charles, 38% to Maurice, with minor shares held by John Hegarty and Tim Bell. The company achieved profitability within its inaugural year. Following the 1975 merger with Garland Compton, the brothers exchanged their shares for stakes in the combined entity, holding 36% of the expanded group; Compton U.S.A owned 26%, while 38% was held by public shareholders. Listing on the London Stock Exchange allowed Saatchi & Saatchi to secure funds through discounted rights issues aimed at financing acquisitions.

Acquisitions were generally structured using a combination of immediate cash payments and earn-out arrangements, a method perfected by Martin Sorrell. For instance, the 1982 purchase of Compton’s U.S. operations involved $29.2 million in cash plus $27.6 million payable over a decade, contingent upon profit performance. This rights issue reduced the brothers’ combined stake to 18%. Starting in June 1988, the company raised capital through redeemable preference shares, which were treated as equity but functioned like debt due to put options exercisable if share prices fell below certain levels.

Difficulties and decline

Following the acquisition of Bates in 1987, conflicts arose with major clients leading to the loss of significant accounts including Warner-Lambert ($68M billings), RJR Nabisco ($96M), Michelob ($38M), Ralston ($12M), and McDonald's ($8M). Competitor concerns also contributed to losing Colgate-Palmolive and Procter & Gamble as clients. Nevertheless, Saatchi & Saatchi remained the UK’s most profitable agency in 1987, with group profits increasing from £70.1 million in 1986 to £124.1 million, while expanding its listings to include the Paris Bourse and NYSE.

In 1987, the brothers launched a takeover attempt for Midland Bank, then Britain’s fourth-largest bank with 2,100 branches. The bid was dismissed amid doubts regarding their banking expertise. This move attracted negative media coverage and unsettled investors, resulting in a sharp 6.2% decline in share price during September. The global market crash in October 1987 further slashed share value by one-third within a single day.

By 1988, ongoing uncertainties combined with volatile markets hindered Saatchi & Saatchi from raising funds via rights issues. Instead, the company issued £176.5 million worth of convertible preference shares at £4.41 each to finance the acquisition of Gartner Group, an IT market research firm. Should share prices fail to surpass £4.41 by July 1993, shareholders could redeem their shares plus a 25% premium, potentially costing the company £211 million.

Although profits increased by 11% in 1988 to £138 million, 1989 saw the first profit decline after eighteen consecutive years of growth—plunging sharply to £21.8 million. This announcement triggered a 16% drop in share price during the annual general meeting. Staff reductions commenced with a 6% cut (approximately 800 employees) early in 1989 and escalated to a total of 7,000 layoffs by 1993.

In June 1989, Saatchi & Saatchi opted to sell its consulting division to concentrate exclusively on advertising and related services. Later that year, Robert Louis-Dreyfus was appointed CEO; he divested consulting units at substantial losses and spearheaded extensive restructuring efforts until mid-1992. His successor Charles Scott persisted with cost reduction initiatives but publicly disagreed with Maurice Saatchi regarding strategic priorities.

Removing the Saatchi Brothers

David Herro, a U.S.-based investment analyst managing a 9.6% stake in Saatchi & Saatchi on behalf of Harris Associates L.P., collaborated with other significant shareholders such as the State of Wisconsin Investment Board (holding 8.1%) and General Electric Capital Corporation (5%). Alarmed by public conflicts between Scott and Maurice Saatchi that threatened shareholder value, Herro urged the board to exercise closer oversight of company affairs.

Toward the end of 1994, Herro and allied investors pushed for the dismissal of Maurice Saatchi from his chairman position, criticizing his resistance to cost reductions, takeover ambitions, and a compensation plan perceived as self-serving. The board removed Maurice in December 1994. Shortly after, key executives including Jeremy Sinclair and Bill Muirhead departed to join Maurice in establishing M&C Saatchi, bringing with them major accounts like Gallaher Group, Mirror Newspapers, Dixons, and British Airways.

Post-Saatchi Era

The 1995 departure of the Saatchi brothers and the launch of M&C Saatchi caused significant disruption, resulting in an estimated £40 million revenue loss alongside £11 million spent on severance packages and legal disputes. Saatchi & Saatchi PLC rebranded as Cordiant Communications Group and divided into Research and Advertising branches, with Saatchi & Saatchi Advertising remaining the core entity.

Bob Seelert was appointed CEO to restore stability, steering away from the aggressive acquisition strategy of the previous decade by divesting assets such as Fitch design (sold to WPP), The Hay Group consultancy, and multiple international offices. The new management concentrated on preserving relationships with prominent clients including Campbell Soup Company, Hewlett-Packard, Johnson & Johnson, Procter & Gamble, DuPont, Philip Morris, and General Mills—many of which were inherited through earlier acquisitions like Compton and Bates Worldwide.

Although the agency lost significant clients such as British Airways and Mars during 1995, its U.S. operations maintained robust performance. Expansion was supported by growth in healthcare advertising in New York City and increased budgets from West Coast automotive clients Toyota and Lexus.

In 1997, Seelert ascended to Chairman while Kevin Roberts assumed the CEO role. Roberts, experienced in beverage marketing, removed "Advertising" from the company’s name and relocated global headquarters from London’s Charlotte Street to Hudson Street in New York City. Emphasizing Saatchi & Saatchi as an "ideas company," Roberts prioritized digital innovation during the rise of the internet age.

Publicis Groupe Acquisition (2000)

In 2000, following rumors of potential takeovers by WPP or Omnicom, Saatchi & Saatchi was acquired by Paris-based marketing giant Publicis Groupe. Publicis retained Kevin Roberts as CEO to continue advancing his vision for an "ideas agency." However, challenges emerged after the dot-com bubble burst: closure of the San Francisco office; loss of Hewlett-Packard’s 15-year account, which was divided between a Publicis agency and Goodby, Silverstein & Partners; Johnson & Johnson reevaluated its partnership and withdrew its $100 million Tylenol account from New York; InBev transferred its Beck's Beer account to Leo Burnett after just one year.

Roberts concentrated on revenue growth through existing clients while securing new business such as Pur Filtered Water and Millstone Gourmet Coffee in Los Angeles. Efforts to bolster the LA office followed a missed $40 million Toyota Scion pitch awarded to The Attik.

This approach culminated in the creation of the Lovemarks concept, elaborated in Roberts’ book. Despite initial doubts about this philosophy, Roberts managed to generate nearly $700 million in billings by 2006 from clients including Wendy's and JC Penney. New York office wins like the New York Tourism Board and Cold Stone Creamery were linked to confidence in Lovemarks. Nonetheless, Wendy's shifted most of its advertising to Kirshenbaum Bond & Partners following objections from Wendy Thomas concerning ad content.

In 2005, Saatchi faced backlash over a £20 million campaign promoting a Brazilian spirit that featured graffiti art on London buildings. In 2007, Dr Martens ended its relationship with Saatchi after an advertisement used an unauthorized image of Kurt Cobain; although Saatchi apologized for the oversight, they maintained that the ad was intended to be provocative rather than offensive.

Interestingly, despite gaining recognition for the 1979 "Labour isn't working" campaign supporting the Conservative Party, Saatchi was appointed as advertising agency for the UK Labour Party in 2007. They developed the Not Flash, Just Gordon campaign ahead of Prime Minister Gordon Brown’s surprise general election announcement.

A Fresh Partnership

Although Saatchi & Saatchi London secured American clients such as Wendy's and JC Penney, bolstering Roberts' "ideas agency" concept, the office experienced a decline, slipping out of the UK’s Top 10 agencies by client billings. In early 2007, the majority of Toyota's UK and European accounts transitioned to CHI & Partners, following the complete transfer of the Lexus account to that agency. Nevertheless, toward the end of 2006, there was a degree of recovery as Toyota reinstated some business, including the £60 million pan-European launch of the Auris, which succeeded the Corolla.

In July 2007, Publicis CEO Maurice Levy revealed a strategic collaboration between Saatchi & Saatchi and its sister agency Fallon, resulting in the formation of the Saatchi & Saatchi-Fallon (SSF Group). Fallon's London branch, recognized for clients like Sony, Orange, and Asda, had demonstrated strong creative output and new business growth, while its Minneapolis headquarters had suffered client attrition from brands such as Citigroup, BMW, Sony, Dyson, and Starbucks.

Kevin Roberts was named CEO of the SSF Group, responsible for overseeing global operations. Reporting directly to him, Robert Senior—founding partner of Fallon London—managed European and UK operations across both agencies.

By October 2008, the SSF Group secured a significant contract with chocolate manufacturer Cadbury to manage its Dairy Milk brand across several regions including the UK, Europe, Russia, Canada, and the US, with billings estimated at $200 million. Fallon London led creative initiatives in Europe while Saatchi New York handled the US market as Cadbury aimed to expand its presence against rival Hershey.

Saatchi & Saatchi Fallon Group (2007–2017)

By 2016, Saatchi & Saatchi had experienced a decline in market standing, ranking 12th among UK agencies by billings according to Campaign Magazine. In 2017, global CEO Kevin Roberts resigned amid controversy over comments related to gender equality in advertising; Robert Senior succeeded him. Later that year, the alliance between Saatchi & Saatchi and Fallon dissolved, with Fallon being absorbed into Publicis Groupe’s Leo Burnett network.

Saatchi & Saatchi Rebuilds (2017–Present)

Under CEO Magnus Djaba’s leadership, Saatchi & Saatchi London relocated from its longstanding Charlotte Street location to a new Publicis Communications campus at 40 Chancery Lane, which now serves as its global headquarters. Upholding its distinctive corporate culture, the agency revived "The Pregnant Man" pub onsite as a public joint venture.

Corporate

Saatchi & Saatchi maintains operations in more than 80 countries with global headquarters situated in New York City and a significant U.S. office located in Torrance, California. Prominent U.S. clients include Toyota, Procter & Gamble, and General Mills. The original London office moved to Chancery Lane in 2017 and continues to operate its iconic pub, "The Pregnant Man." Magnus Djaba holds the position of global CEO.

In August 2016, Andrea Diquez was appointed CEO of Saatchi New York, taking over from Brent Smart.

Digital

Anticipating changes in consumer behavior toward mobile devices and broadband internet usage, Saatchi & Saatchi expanded its digital expertise beginning in 2006. This included forming a global joint venture with Hyperfactory, a mobile marketing company based in New Zealand. These initiatives garnered recognition from PricewaterhouseCoopers and Procter & Gamble. Furthermore, a 2009 internship competition led to the creation of the influential Secret London Facebook Group and website.

Cancelled campaign

In August 2011, Telecom New Zealand withdrew the "Backing Black" advertising initiative, which encouraged supporters to refrain from sexual activity during the 2011 Rugby World Cup and to wear black rubber bands as a sign of solidarity. Alan Gourdie, Telecom's retail director, issued an apology for any offense caused to New Zealanders. Saatchi & Saatchi, the agency behind the campaign concept, chose not to comment publicly, although CEO Kevin Roberts initially stood by the campaign. The initiative attracted significant public criticism, including disapproval from Prime Minister John Key, who remarked that it demonstrated how some advertising expenditures may not be wisely allocated.

Bob Isherwood

Bob Isherwood joined Saatchi & Saatchi in 1986 and held the position of Worldwide Creative Director for 11 years, also chairing the agency's Worldwide Creative Board. During his tenure, Saatchi & Saatchi’s global presence expanded to 143 offices across 83 countries, establishing itself as a leading creative firm and earning over 8,000 prestigious awards—including recognition as the top creative network at the 2002 Cannes Lions Festival—for clients such as P&G and Toyota. Isherwood was instrumental in launching the global Toyota Prius campaign.

He also originated the Saatchi & Saatchi New Directors Showcase, which evolved into a flagship event at the Cannes Lions Festival, spotlighting filmmakers like Spike Jonze and Michel Gondry. This showcase continues to be one of the festival’s most well-attended attractions.

Richard Humphreys

During the 1980s, Richard Humphreys acted as CEO and Chairman following Saatchi & Saatchi’s acquisition of his agency, Humphreys, Bull and Barker. He managed prominent accounts including Carlsberg and Saab. Prior to acquisition, Humphreys had developed his agency into one of the UK’s top twenty firms. Subsequently, as President of Saatchi & Saatchi Advertising Worldwide, he oversaw a network of 63 companies employing over 5,000 staff across 27 countries. Later in his career, he co-founded Adcom Investors, leading a US-based advertising and sports marketing enterprise that he divested five years later.

Tim Bell

Tim Bell (1941–2019) was appointed as Saatchi & Saatchi’s first Media Director in 1976. Progressing through senior account service roles to become CEO and eventually Chairman of the London office, he was pivotal in fortifying the agency’s association with Margaret Thatcher during her election campaigns in 1979 and 1983. After a disagreement with the Saatchi brothers in 1985, Bell departed to join Frank Lowe, lending his name to Lowe, Howard-Spinke and Bell (now Lowe Worldwide).

Andrew Rutherford

Andrew Rutherford served as lead copywriter and Full Board Director at the agency and was responsible for creating the influential Labour Isn't Working campaign in 1978, which is widely credited with contributing to Thatcher’s electoral success in 1979. Over six years at Saatchi & Saatchi, he played a major role in award-winning campaigns for clients like The Health Council, Dunlop, Kronenbourg, Jaffa, and The Conservative Party. He left in 1979 to establish Wight Collins Rutherford and Scott (WCRS), which became a successful agency.

Paul Arden

Paul Arden (1940–2008) served as Executive Creative Director from 1987 until 1995, spearheading landmark advertising campaigns for brands such as British Airways, Anchor Butter, Toyota, Ryvita, Nivea, Trust House Forte, Alexon Group, and Fuji. His work on British Airways’ advertising is widely regarded as some of the most influential in the industry, playing a crucial role in elevating the airline’s market stature. The Independent credited Arden as the visionary behind British Airways’ transformation into "The World's Favourite Airline," while The Times referred to him as a "tempestuous advertising director" responsible for iconic campaigns including Silk Cut and The Independent. Although Arden departed Saatchi & Saatchi in 1992, he remained an important consultant until 1995.

Martin Sorrell

Sir Martin Sorrell (born 1945) became part of Saatchi & Saatchi in 1975 amid their reverse takeover of Compton. Holding the position of Group Finance Director from 1977 to 1984, he implemented an assertive acquisition approach that significantly broadened the firm’s international footprint, notably pioneering the use of the earn out structure to accelerate company expansion.

Robert Louis-Dreyfus

Robert Louis-Dreyfus (1946–2009), grandson of Léopold Louis-Dreyfus, founder of S.A. Louis-Dreyfus et Cie, led one of France's largest private enterprises and a global leader in grain trading. As CEO of IMS, a U.S.-based pharmaceutical research firm, he established connections with the Saatchi brothers during their acquisition phase. Following the sale of IMS to Dun & Bradstreet, he retired at age 42 but later returned as CEO of Saatchi & Saatchi PLC from 1989 to 1993. Subsequently, he demonstrated strategic leadership by orchestrating a successful turnaround as CEO of Adidas-Salomon between 1994 and 2001.

Sources

Fendley, Alison, Saatchi & Saatchi: the Inside Story, Diane Publishing Co., 1995
Kleinman, Philip, The Saatchi & Saatchi Story, Pan Publishing (London), 1987
Fallon, Ivan, The Brothers: The Rise & Rise of Saatchi & Saatchi, Hutchinson, 1988
Goldman, Kevin, Conflicting Accounts – The Creation & Crash of the Saatchi & Saatchi Empire, Simon & Schuster, New York, 1997

External links

– official site