Advertising agency M&C Saatchi (SAA) claims to possess a “brutal simplicity of thought”. This is a positive, it argues, because simple ideas “enter the brain quicker and stay there longer”. Unfortunately, it has long failed to apply this clear-eyed wisdom to its own business model.
The group is teeming with subsidiaries, which have bred inefficiency and confusion over the years. Under a new management team, however, M&C Saatchi is starting to look increasingly attractive. Past scandals and constraints on shareholder returns are retreating over the horizon, while demand is improving, margins are widening and cash flow is preparing to rebound.
- Rapid margin expansion
- Improving cash flow
- Increasing diversification
- Improving market backdrop
- Client caution
- AI threat to agency model
The agency was founded by brothers Maurice and Charles Saatchi in 1995. It quickly went on to win contracts with British Airways and Qantas, and was named the “fastest growing start-up in history” by the Financial Times. Its rapid expansion came at a cost, however.