Saatchi & Saatchi responds to decreasing client spend and changing market with restructure—UPDATED

Over the past five years, chief executive Nicky Bell, the recently departed Antonio Navas, head of planning Murray Streets and many others have helped Saatchi & Saatchi regain some of its former glory after what they all admit was a fairly rough patch. It’s won some big accounts, it’s put a few big awards on the mantelpiece and it’s lured a few big names across its newly renovated offices on The Strand. But due to a reduction in client spend—particularly from Spark—and an evolution in the kind of work the agency is being asked to do, it has had to restructure the business. 

“It’s been five years since we did one. But we’ve got new executive creative directors [Guy Roberts and Corey Chalmers] in place so it’s probably the best time to do it now,” says Bell. “… We’re making changes to get more balance, but we are also responding to a reduction in client spend.” 

The reduction of spend from Spark—or what one source called Saatchi’s ‘golden ticket’—after more than 20 years together was predicted by many following the departure of Kevin Roberts from the board and the arrival of a new management team—and particularly Jason Paris (slightly ironically, Chris Quin, who Paris recently replaced, was on the same Stanford course that Bell attended last year). Bell didn’t want to discuss any specific clients, but Spark took the agency off a retainer late last year. 

Saatchi & Saatchi was heavily involved in the Spark transformation. It was behind the injection of colour for Ultra Mobile, as well as the ‘Never Stop Starting’ and ‘Thanks’ ads for the rebrand, but one of Spark’s big plays, The Boroughs, was led by Dynamo and shot by DDB’s ex-executive creative director Andy Fackrell. That campaign didn’t even involve TV (or paid-advertising) and launched through social media and YouTube. Similarly, Spark’s content-led Tech in a Sec campaign, which is shot by TVNZ, is less about fancy creative and more about providing utility to customers. 

Spark has been open about its move away from big brand ads on TV and towards offering better incentives for customers (read about the strategy behind the Spark rebrand here). And with free mobile data at phoneboxes, free social data, Spotify plans and, most recently, 12 months of free Lightbox, most agree it’s done a bloody good job of it and has plenty of momentum heading in to 2015. But that evolution obviously impacts on the amount of work Saatchi & Saatchi gets to do (it has maintained Spark’s SME business, however). 

This trend is also evident among some of its other major clients, with ASB changing its approach and augmenting its TV spots with a data-driven, content-led strategy. Saatchi still does all the work for the bank and recently caught plenty of attention with the hairy ball boys and launched a clever Snapchat campaign. But the type of work it is doing is changing. 

Elsewhere, Air New Zealand is currently pitching part of its Airpoints business (EDMs, email and execution). But Saatchi & Saatchi, which handles the creative and strategic part of that, isn’t thought to be affected. Bell directed all questions about the pitch back to Air New Zealand. 

Bell says some of its other clients are also quite seasonal. So the decline in spend is “a mix from a few different places”. 

“Unfortunately, the part of this industry that’s the most expensive is the talent … The industry is evolving. And we’re evolving to fit the kind of work clients want us to do.” 

StopPress has been told by a couple of different sources that around ten people are leaving the agency. But when asked if that was accurate, Bell didn’t want to comment on specifics as it’s “still working through the process” and wants to respect the privacy of those who are departing. 

“We have a great culture and we take the process very seriously,” and she says it has done everything it can to ensure the people who are leaving are given all the help they can. 

She says there are always legal considerations to deal with when it comes to restructures, but it has tried to be “really open and honest with the agency”. 

“The culture is strong, so any change is hard on them.”

While it’s obviously been a difficult start to the year, Bell still believes 2015 is shaping up to be a positive one. She says it won around five pieces of business in the last quarter, although they weren’t big enough to make up the shortfall from elsewhere; there’s growth in the customer experience and content-driven side of the business; Chalmers and Roberts are confident about the quality of the ideas emanating from the creative department; and she says the hiring of Terry Williams-Willcock as digital creative director last year is an indication of where the emphasis is being placed. 

Elsewhere, Navas, who left in August last year, has recently taken up the role of chief creative officer with Nissan United, the Omnicom unit dedicated to Nissan’s advertising. 

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