private industry advertising founded london 1970 founders maurice saatchi charles saatchi headquarters new york city new york united states key people robert senior ceo worldwide kevin roberts chairman parent publicis 2000 present website www.saatchi.com saatchi & saatchi is a global communications and advertising agency network with 140 offices in 76 countries and over 6 500 staff . it was founded in london in 1970 but is now headquartered in new york . the parent company of the agency group was known as saatchi & saatchi plc from 1976 to 1994 was listed on the new york stock exchange until 2000 and for a time was a constituent of the ftse 100 index . in 2000 the group was acquired by the publicis groupe . in 2005 it went private . contents 1 history 1.1 early years 1.2 financial mechanisms 1.3 difficulties and decline 1.4 ousting the saatchis 1.5 after the brothers 1.6 acquisition by publicis 1.7 a new alliance 2 operations 2.1 corporate 2.2 digital 2.3 aborted campaign 3 notable alumni 3.1 tim bell 3.2 paul arden 3.3 martin sorrell 3.4 robert louis dreyfus 4 references 5 sources 6 external links history edit early years edit saatchi & saatchi was founded by brothers maurice now lord saatchi and art collector charles in 1970 . 1 following stints starting as a copywriter at the new york city offices of benton & bowles in 1965 then at collett dickenson pearce and john collins & partners charles saatchi teamed up with art director ross cramer and the genesis of what would become saatchi & saatchi was born in london in 1967 as the creative consultancy cramersaatchi . the consultancy took on employees john hegarty and jeremy sinclair and began to work direct for clients . it was sinclair s pregnant man 2 ad for the health education council which first attracted attention to the small agency . charles s younger brother maurice joined the business in 1970 after cramer s departure whereupon it was renamed saatchi and saatchi and developed into a full service advertising agency . noted work included their campaign labour isn t working 3 on behalf of the conservative party before the 1979 uk general election and ongoing campaigns for british airways and silk cut with whom the agency had long relationships . 4 the agency was seen as producing breakthrough creative work with a bold attitude and employed people who went on to be stars of their industry including sir john hegarty lord tim bell and sir martin sorrell . 5 from the outset and even as their creative reputation was still forming the saatchi brothers set upon a ferocious course of business acquisitions . with the reverse takeover of the compton agency in 1976 they achieved a public company listing and were thereafter able to make rights issues to raise the capital required for their acquisition drive . 6 the push was less about removing competition than about adding to their offering of professional marketing services beyond advertising and later an international expansion drive particularly into the united states . between 1972 and 1987 over 35 marketing services businesses were acquired including four significant ad agency networks . 6 year company location business price 1972 brogan developers uk property development 1972 e.g dawes manchester uk advert agency 1972 notley advertising london uk advert agency 1974 george j smith london uk advert agency 390k 1976 garland compton uk ad agency merger 1978 hall advertising edinburgh uk ad agency 1.9 m 1979 o kennedy brindley dublin ireland ad agency 309k 1981 dorland uk ad agency 7.84 m 1982 garland compton us ad agency 56.8 bn 1983 mccaffrey & mccall us ad agency 27m 1983 hunter advertising dublin ireland 1983 gough waterhouse sydney and melbourne australia ad agency 1984 cochrane chase livingstone california us 1984 michael bungey dfs 1984 r.j.a netherlands 1984 harrison crowley uk 1984 yankelovich skelly & white us market research 1984 mcber & co us market research 1984 the hay group worldwide management consultancy 12bn 1984 hedger mitchell stark london uk ad agency 3.9 m 1985 siegel & gale new york us corporate branding 1985 marlboro marketing new york us sales promotion 1985 the kleid company new york us mailing list broker 1985 wong lam hong kong 1985 hayhurst canada 1985 campaign new zealand 1985 sharps uk 1985 granfield rork collins london uk 109m 1985 humphreys bull & barker london uk ad agency 1985 the rowland company new york us public relations 10.8 m earnout 1985 infocom group i.t consulting us 31m 1985 clancy shulman associates us 1985 kingsway public relations uk 1986 dancer fitzgerald sample worldwide ad agency network us 75m 1986 backer & spielvogel us ad agency network us 101m 1986 ted bates us and asia ad agency network us 500m 1986 peterson & co us trial litigation advisers us 123m 1986 campbell mithun minnesota us ad agency 1987 cleveland consulting assoc us management consultants 1988 gartner group connecticut us i.t market research us 77.4 scarcely any of the growth of the saatchi & saatchi plc was organic with the only start ups being the sales promotion agency in 1980 and financial dynamics pr in 1986 . whilst their foundation london office was consistently successful in winning new clients it too was propelled forward in the 1976 merger with the uk operation of the larger garland compton business resulting in its tripling of size and a relocation into the compton premises . 6 goldman quotes executives of acquired entities including david mccall mccaffrey & mccall and alan siegel siegel gale saying that they never met charles saatchi and that neither brother nor other group management had any involvement in their business after acquisition . there was no drive to achieve back office economies no systemisation of process administration and no cross referrals of inter group business . 6 financial mechanisms edit at its foundation in 1970 saatchi & saatchi was financed with 100 000 of capital from the brothers and some backers including the designer mary quant and her husband . the initial shareholding was 15 % cannon holdings quant & friends ; 42 % charles ; 38 % maurice ; 2.5 % john hegarty ; 2.5 % tim bell . the company was profitable in its first year . to achieve the first large merger garland compton in 1975 the brothers sold their interest in their business for shares receiving 36 % of the enlarged group while compton u.s.a owned 26 % and 38 % was held by public shareholders . the compton uk listed status meant that the saatchi & saatchi business could now issue stock and the capital for the subsequent acquisitions was raised by giving existing shareholders the first rights to purchase new stock at a discount . 6 commonly the acquisitions used a part cash up front part earn out mechanism as perfected by martin sorrell . the 1982 acquisition of compton s u.s. business for instance outlaid 29.2 million in cash and another 27.6 million to be paid over ten years if the agency achieved after tax profits of 4.07 million . the rights issue to raise the 29.2 million watered down the brothers holding to 18 % of the combined group . 6 from june 1988 see next section the company began to use redeemable preference shares to raise capital . these securities look like equity and were classified as such on the company s balance sheet but since a failure of the company s share price to rise above a pre determined threshold at a nominated forward date would enable the preference holders to put their stock back to the company these instruments were in truth more like interest paying debt . difficulties and decline edit difficulties arose after the 1987 bates acquisition as some clients perceived conflict concerns with other group agencies . bates clients warner lambert billings 68 million rjr nabisco billings 96 million michelob billings 38 million ralston billings 12 million and mcdonald s billings 8 million all pulled their accounts in the months following that acquisition . colgate palmolive assignments were also pulled from bates at the same time as their direct competitor procter & gamble were pulling business from saatchi & saatchi compton and dfs dorland due to their conflict concerns . however the london ad agency was still the number one in the profits in the uk in 1987 and the worldwide group was performing financially with saatchi & saatchi company plc recording its seventeenth year of consecutive growth with profits of 124.1 m up from the 1986 s 70.1 m. the group expanded its public listings to include the paris bourse and the new york stock exchange . 6 the brothers in 1987 made their boldest move to date when they made plans for a take over run of the ailing midland bank britain s fourth largest bank at the time with 2 100 uk branches . the bank s board rejected the offer in september 1987 openly questioned the qualifications of the saatchis to be running a bank and may have leaked details of the bid to the press . 6 in the same month maurice saatchi met with board executives of the hill samuel merchant bank to discuss an acquisition . once the financial press became aware of the moves the brothers became the subject of unprecedented ridicule with the criticisms focused on the notion that bank customers staff and shareholders would be able to make no sense of their bank being part of an ad agency group . 6 the city s reaction was swift and in mid september 1987 the saatchi & saatchi share price fell 6.2 % in two days . on 19 october 1987 the world stockmarkets crashed . saatchi & saatchi stock fell by 1 3 in twenty four hours and by mid october was at 5.48 down from 6.70 in mid september and 7.05 high of 1987 . as a result of the perceptions lingering after the midland bank discussions on top of the general nervousness that followed the crash by 1988 saatchi & saatchi plc was unable to use its previously reliable rights issue method to raise the capital it needed to continue its acquisition drive . 6 in june 1988 the company issued 176.5 million of convertible preference shares at 4.41 each to fund its acquisition of the gartner group an information technology market research firm . if saatchi plc shares didn t go above 4.41 by july 1993 the holders could put the shares back to the company at 4.41 plus a 25 % bonus . saatchi & saatchi plc stood to owe 211 million for the 176.5 million of capital raised . 6 profits were up 11 % in 1988 to 138 million but in 1989 the group had to report its first ever decline after eighteen years of growth when the profit dropped dramatically to 21.8 million . when this was forewarned at the march 1989 annual general meeting the share price dropped promptly by 0.6 to 3.20 or 16 % . between january and may 1989 6 % of the workforce or 800 employees were laid off by the end of 1993 that number had grown to 7 000 . in june 1989 saatchi & saatchi announced its intention to sell off its entire consulting division and to focus on advertising and related services . later that year robert louis dreyfus was appointed as ceo of the listed company . he effected the sale of a number of businesses the consultancies infocom and hay consulting would collectively sell for half their initial purchase price and presided over a major restructuring of the company until his departure in mid 1992 . his successor was charles scott who had joined the business with louis dreyfus in 1989 as finance director . he continued the cost cutting and consolidation drive but found himself in regular disagreement with maurice saatchi and the two executives sometimes conducted their spat via press leaks